Renting out a property in Ontario can be complex, but if you’re a Real Estate Investor and landlord, it’s your responsibility to know the rules.
We can help.
The Residential Tenancies Act (RTA) governs the rights and responsibilities of landlords and tenants in Ontario, so it’s important that you review and understand its rules. The Landlord and Tenant Board (LTB) manages those rules and is a source for many of the documents you need as a landlord.
We have created this handy guide to get you started without having to memorize the entire legal document. There are some key facts about raising rent as a landlord in Ontario, which we have already detailed in our last blog post for your benefit. Here are the 8 frequently asked questions about landlord-tenant laws in Ontario that every landlord needs to know.
What rentals are covered by the RTA?
The Residential Tenancies Act provides rules for most rental units, including an apartment, a house, or a room in a rooming or boarding house. The Act also applies to care homes, retirement homes, and sites in a mobile home park or land lease community.
However, the rules do not apply if the tenant must share a kitchen or bathroom with the landlord. Many of the rules do not apply to non-profit and public housing or university and college residences, other than such things as maintenance and the reasons for eviction.
For the interests of Real Estate Investors, then, the Act applies to your role as a landlord if you’re looking to buy a tenanted property or planning to rent out a property you already hold.
What are the key steps before a tenant moves in?
If you’re getting a new tenant, it’s a good idea for you and the tenant to sign the government’s Residential Tenancy Agreement (Standard Form of Lease) before the tenant moves in. The agreement begins on the date the tenant can move into the rental unit, even if they don’t move in on that day.
Tip for Landlords: It’s best practice to do a walk-through with your tenant prior to having them move in. Use that time to review and document the current condition of the property in case there are issues later.
Can I collect a deposit on the rent?
Yes, you can collect a rent deposit from a new tenant on or before the start of a new tenancy. If they pay by the month, the deposit can’t be more than one month’s rent. However, once you increase the rent, you can ask the tenant to increase the rent deposit by the same amount. You must also pay the tenant interest every year, of an amount the same as the government’s annual rent increase guideline.
That deposit can only be used as the rent payment for the last month or week before the tenant moves out. It cannot be used for anything else, such as repairing damage to the rental unit. If you collect a deposit and don’t let the tenant move in, then you must return the deposit.
What are the rules about the rental lease?
A lease is a contract in which the tenant agrees to pay you rent for the right to live in your rental unit. A lease that covers a set period of time is called a fixed term tenancy and should include both the start and end date. Most leases are for a year.
However, the end of that term does not mean the tenant has to move out or sign a new lease. The contract lease is renewed automatically on a month-to-month basis for monthly rentals. The lease basically “rolls over,” and you and the tenant don’t have to sign a new fixed-term lease – but you can if you want.
Be sure you agree to a rental amount with the tenant; after that, you cannot raise the rent for 12 months after they move in.
How do I evict a tenant?
You can only end a tenancy and evict your tenant for one of the reasons allowed by the Act, and you must give notice in writing. There are different forms available from the LTB depending on the reason for eviction.
Here’s a snapshot of valid reasons to evict a tenant based on their conduct:
- not paying the rent in full
- persistently paying the rent late
- causing damage to the rental property
- illegal activity
- affecting the safety of others
- allowing too many people to live in the rental unit
Here’s another snapshot of reasons to evict a tenant that aren’t based on their conduct:
- you want the rental unit for your own use or for the use of an immediate family member or caregiver
- you have agreed to sell the property, and the purchaser wants all or part of the property
- you’re planning major repairs or renovations that require the building to be vacant
- you plan to demolish the rental property
There are other times that a tenancy may end: you and the tenant can agree on this at any time, even during the term of a lease. That’s worth handling in writing instead of verbally.
As a Real Estate Investor, an ideal situation is to purchase a vacant property. That way, you can negotiate the terms of the lease and rental price with new tenants rather than assume existing tenants and agreements.
Can I prevent my tenant from having a pet?
You do have the right to screen prospective tenants and reject them if you suspect they will move in with pets. However, the RTA states that any “no pet” provision in a tenancy agreement is void. That means, once you accept a tenant: “in spite of any verbal agreements or contract stipulations, landlords cannot evict tenants for pet ownership under most circumstances.”
But in some cases, you can give a tenant notice based on the presence, control, or behaviour of a pet the tenant is keeping, such as where a pet causes damage to the rental property. For example, if a pet is dangerous, disturbs neighbours, or causes damage to property, landlords can evict the tenant.
Can I get my tenant to handle yard care?
As a landlord, you have to keep your rental property in a good state of repair and obey all health, safety, housing, and maintenance standards. That means you’re responsible for snow removal and grass cutting, including removing noxious weeds and any unsafe accumulation of ice and snow. You can’t transfer this responsibility to your tenant unless a special agreement is reached, such as when you sign a separate agreement and pay the tenant to remove the snow or handle yard work.
Tenants have responsibilities, too: they must keep their rental unit clean and repair or pay for the repair of any damage they cause to the property. This is for damages, not normal wear and tear like an aging carpet.
What happens if there’s a disagreement?
The Landlord and Tenant Board provides the process for enforcing the rules of the act. It can provide information to landlords and tenants about their rights and responsibilities under the RTA. It’s also responsible for resolving disputes between landlords and tenants through mediation or adjudication. It’s worth noting that long wait times are typical for resolving a dispute.
The Board is also your source for all the relevant forms you will need as a landlord, such as a notice to increase rent or notice to end a tenancy.
Landlords should be aware that there can be very long wait times associated with having your dispute heard – often many months.
The Bottom Line
There are plenty of rules to follow in the landlord-tenant laws in Ontario. We have covered the ones most commonly asked about when landlords are managing their property, looking to buy a tenanted property, or considering a BRRR project—to Buy, Renovate, Rent, Refinance. There are other considerations for landlords in the Ontario law, such as raising the rent. To learn more, this article from Miller Thomson is an excellent resource, providing further insights and cautionary advice for prospective landlords.
If you’d like to learn more as a Real Estate Investor, tune in to our new podcast, Real Estate and Wealth, once launched.
Calvert Home Mortgage Investment Corporation is an alternative lender in Alberta and Ontario that specializes in working with Real Estate Investors. Our team wholeheartedly embraces the vision that homes in revitalized communities are possible for all. We are committed to our mission of being Canada’s most trusted mortgage lender and empowering our customers, investors, and partners to succeed and grow in thriving communities. That’s why we are here to provide support and education for Real Estate Investors throughout their journey. Contact one of the experienced underwriters for more information on how rental investments are good for the real estate market.
Ardith Stephanson is a freelance writer and journalist who writes on a variety of topic areas.
