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CED, an Overview of the Law — Landlord and Tenant — Residential Tenancies

With summer comes one of life’s more exciting yet stressful events – moving! This post looks at residential landlord and tenant law in Ontario, with particular focus on tenancy agreements, the commencement of tenancy, financial issues such as security deposits, post-dated cheques and automated payments, the validity of “no pets” provisions, and assigning and subletting.

Landlord and Tenant — Residential Tenancies

 

By: H. Peter Eccles, B.A., LL.B., of the Ontario Bar

 

Request a sample legal memo on a Residential Tenancies issue 


II: Residential Tenancies 

 

Click HERE to access the CED and the Canadian Abridgment titles for this excerpt on WestlawNext Canada

II.4: Tenancy Agreements

See Canadian Abridgment: REA.V.20.g Real property | Landlord and tenant | Residential tenancies | Leases

In selecting prospective tenants, landlords may use, in the manner prescribed in the regulations under the Human Rights Code,1 income information, credit checks, credit references, rental history, guarantees or other similar business practices as prescribed in those regulations.2 If a provision of the Residential Tenancies Act, 2006 conflicts with the Human Rights Code, the Code shall prevail.3

If a tenancy agreement is entered into, the landlord shall provide the tenant with information relating to the rights and responsibilities of landlords and tenants, the role of the Landlord and Tenant Board and how to contact the Board.4 The information shall be provided on or before the tenancy begins in a form approved by the Board.5

Every written tenancy agreement entered into on or after June 17, 1998, must contain the legal name and address of the landlord to be used for giving notices or other documents under the Act.6 Until the landlord complies with this requirement, the tenant's obligation to pay rent is suspended, and the landlord may not require the tenant to pay rent.7 However, after complying, the landlord may require the tenant to pay any withheld rent.8

If a tenancy agreement entered into on or after June 17, 1998 is in writing, the landlord must give a copy of the agreement, signed by the landlord and the tenant, to the tenant within 21 days after the tenant signs it and gives it to the landlord.9 If a tenancy agreement entered into on or after June 17, 1998 is not in writing, the landlord must, within 21 days after the tenancy begins, give the tenant written notice of the legal name and address of the landlord for the purpose of giving notices and other documents under the Residential Tenancies Act, 2006.10 Until the landlord complies, the tenant's obligation to pay rent is suspended, and the landlord may not require the tenant to pay rent.11 However, after complying, the landlord may require the tenant to pay any withheld rent.12

II.5: Commencement of Tenancy

See
Canadian Abridgment: REA.V.8.b Real property | Landlord and tenant | Term of lease | Commencement


The doctrine of interesse termini has been abolished for residential tenancies and all tenancy agreements subject to the Residential Tenancies Act, 2006, are capable of taking effect at law or in equity from the date fixed for commencement of the term whether the tenant actually occupies the rental unit or not.1 The term or period that a tenancy begins is on the day the tenant is entitled to occupy the rental unit under the tenancy agreement.2

II.7: Security Deposits

See Canadian Abridgment: REA.V.20.e Real property | Landlord and tenant | Residential tenancies | Security and damage deposits


The only security deposit1 that a landlord may collect from a tenant of a rental unit is a rent deposit collected in accordance with the Residential Tenancies Act, 2006.2

A landlord may require a tenant to pay a rent deposit but only on or before entering into the tenancy agreement.3 The amount of the rent deposit may not exceed the lesser of one month's rent or the amount of rent for one rent period.4 If the lawful rent increases after the rent deposit has been paid, the landlord may require the tenant to increase the rent deposit to the lawful amount.5 The landlord must pay interest to the tenant annually on the rent deposit, at the rate equal to the guideline6 in effect at the time the payment becomes due.7 If the landlord fails to make this payment to the tenant, the tenant may deduct the amount of the payment from a subsequent rent payment.8 The landlord must apply the rent deposit paid to the landlord or a former landlord to the last rent payment before the tenancy terminates.9
A new landlord of a rental unit, or a person deemed to be a new landlord under the Mortgages Act,10 shall not require a tenant to pay a rent deposit if the tenant has already paid a rent deposit to the prior landlord.11 If a person, however, becomes a new landlord in a sale from a person deemed a landlord under the Mortgages Act,12 such new landlord may require the tenant to pay a rent deposit equal to the amount of the former rent deposit that the tenant received from the proceeds of the sale.13

The landlord may deduct from the interest required to be paid on the rent deposit, the excess, if any, between the permitted maximum amount of rent deposit allowed and the rent deposit paid by the tenant and the deducted amount shall become part of the rent deposit.14 

The first interest payment on the rent deposit that becomes due after January 31, 2007 shall be adjusted so that the interest payable for the period ending before January 31, 2007 is based on the annual rate of six per cent and thereafter the interest rate payable on the rent deposit determined under the Residential Tenancies Act, 200615 shall be applicable.16

A tenant, former or prospective tenant, or sub-tenant of a rental unit may apply to the Landlord and Tenant Board for an order that the landlord, superintendent or agent of the landlord pay to the tenant, former tenant, prospective tenant or sub-tenant any money collected from the tenant, former tenant, prospective tenant or sub-tenant in contravention of the provisions in the Residential Tenancies Act, 200617 or the Tenant Protection Act, 199718 concerning security deposits. An application for the return of money wrongly collected for a security deposit must be made within one year after such money was wrongly collected or retained.19

A landlord must repay any amount received as a rent deposit in respect of a rental unit if vacant possession of the rental unit is not given to the prospective tenant,20 unless the prospective tenant, before he or she would otherwise obtain vacant possession of the rental unit, agrees to rent a different rental unit from the landlord21 and the landlord shall repay only the excess, if any, by which the amount received exceeds the amount of the rent deposit the landlord is entitled to in respect of the other rental unit.22

Any person who requires or receives a security deposit from a tenant contrary to the provisions of the Act, fails to pay to the tenant annual interest on the rent deposit, fails to repay or apply a rent deposit where vacant possession of the rental unit was not provided, or fails to apply the rent deposit to the rent for the last month of the tenancy is guilty of an offence.23 A person may be fined up to $25,000 for such an offence, and a corporation up to $100,000.24

If, as is often the case where residential premises are let to students, the annual rent is prorated so that the total amount is collected by the landlord over a period of eight months, the monthly excess over and beyond the monthly figure calculated on a 12 month basis is regarded as a security deposit, in contravention of the provision whereby the security deposit must be in accordance with the Residential Tenancies Act, 2006.25 

II.8: Post-dated Cheques and Automatic Payments

See Canadian Abridgment: REA.V.20.h.iii Real property | Landlord and tenant | Residential tenancies | Rent | Miscellaneous


Neither a landlord nor a tenancy agreement may require a tenant or prospective tenant to provide post-dated cheques or other negotiable instruments for payment of rent or permit automatic debiting of the tenant's or prospective tenant's account at a financial institution, automatic charging of a credit card or any other form of automatic payment for the payment of rent.1
 
II.12: "No Pets" Provisions

See
Canadian Abridgment: REA.V.20.g.xii Real property | Landlord and tenant | Residential tenancies | Leases | Covenants; REA.V.20.k.iii.A Real property | Landlord and tenant | Residential tenancies | Termination of tenancy | By landlord for cause | Pets


A provision in a tenancy agreement prohibiting animals in or about a residential complex is void.1 

IV.16: Assigning and Subletting

See
Canadian Abridgment: REA.V.20.g.v Real property | Landlord and tenant | Residential tenancies | Leases | Assignment or sublet


A tenant may assign a rental unit to another person1 with the consent of the landlord.2 If a tenant asks a landlord to consent to an assignment of a rental unit, the landlord may consent or refuse.3 If the tenant's request for permission to assign the rental unit is to a potential assignee, the landlord may consent, or refuse consent to the potential assignee or refuse consent to assignment of the rental unit.4 In the case of a request for consent to an assignment to a potential assignee, the landlord shall not arbitrarily or unreasonably refuse consent.5 A landlord who has previously given consent to the assignment of a rental unit may subsequently refuse consent to an assignment to a potential assignee of the rental unit, such consent, however, not to be arbitrarily or unreasonably refused.6

A landlord may charge a tenant only reasonable out-of-pocket expenses incurred in giving consent to a potential assignee.7 

A tenant may give the landlord a notice of termination of the lease within 30 days after the date a request is made if the tenant asks the landlord to consent to an assignment of the rental unit and the landlord refuses to consent, or if the landlord does not respond within seven days after the request is made; or if the landlord refuses consent to an assignment to a potential assignee; or if the landlord does not respond within seven days to a request for consent to an assignment to a potential assignee.8 The date for determination specified in the notice is the lesser of the notice period required under the Residential Tenancies Act, 2006 or 30 days.9

If a tenant has assigned a rental unit to another person, the tenancy agreement continues to apply on the same terms and conditions and the assignee is responsible to the landlord for any breach of the tenant's obligations and may enforce against the landlord any of the landlord's obligations under the tenancy agreement or the Residential Tenancies Act, 2006 relating to a period after the assignment whether or not the breach or obligation is also related to a period before the assignment.10 The former tenant is liable to the landlord for any breach of the tenant's obligations and may enforce any of the landlord's obligations that relate to the period before the assignment.11 If the former tenant has started a proceeding under the Act before the assignment and the benefits and obligations of the new tenant may be affected, the new tenant may join in or continue the proceedings.12

The provisions concerning assigning apply to all tenants, whether the tenancies are periodic, fixed, contractual or statutory but do not apply to a tenant of superintendent's premises.13 

Where a tenant retains the right of re-entry as against a sub-tenant, there is no assignment of the lease, as an assignment involves a transfer of the tenant's entire remaining interest.14 

A tenant may sublet a rental unit to another person15 with the consent of the landlord.16

A landlord may not arbitrarily or unreasonably withhold consent to the subletting of a rental unit to a potential sub-tenant.17 A landlord may charge a tenant only for the reasonable out-of-pocket expenses incurred in giving consent to a subletting.18

If a tenant has sublet a rental unit to another person, the tenant remains entitled to the benefits and is liable to the landlord for any breaches of the tenant's obligations under the tenancy agreement or the Act during the subtenancy.19 The sub-tenant is entitled to the benefits and is liable to the tenant for the breaches of the sub-tenant's obligation under the subtenancy agreement or the Act during the subtenancy.20

A sub-tenant has no right to occupy the rental unit after the end of the subtenancy.21 

The provisions concerning subletting apply to all tenants regardless as to whether their tenancies are periodic, fixed, contractual or statutory, but do not apply to a tenant of superintendent's premises.22 

A tenant or former tenant may apply to the Landlord and Tenant Board for an order determining that the landlord has arbitrarily or unreasonably withheld consent to the assignment or subletting of a rental unit to a potential assignee or sub-tenant.23 Such application must be made by the tenant or former tenant within one year after the alleged conduct giving rise to the application.24

If the Landlord and Tenant Board determines that a landlord has unlawfully withheld consent to an assignment or sublease, the Board may do one or more of the following: authorize the assignment or sublease; authorize another assignment or sublease proposed by the tenant; terminate the tenancy, or order an abatement of the tenant's or former tenant's rent.25 The Board may establish terms and conditions of the assignment or sublease.26 If the Board authorizes an assignment or sublease or another assignment or sublease proposed by the tenant, the assignment or sublease shall have the same effect as if the landlord had consented to it.27 If a tenancy is terminated, the Board may order the eviction of the tenant.28

The various provisions29 enabling the landlord to apply for termination of the lease also apply to a subtenancy as if the tenant were the landlord and the sub-tenant were the tenant.30

If a sub-tenant continues to occupy a rental unit after the end of the subtenancy, the landlord or the tenant may apply to the Landlord and Tenant Board for an order evicting the sub-tenant, provided the application is made within 60 days after the end of the subtenancy.31 A tenant may apply to the Board for compensation for the use and occupation by an overholding sub-tenant who remains in possession of the rental unit at the time of the application.32

A landlord is entitled to compensation for the use and occupation of a rental unit by an unauthorized occupant of the unit.33 Unless a landlord and an unauthorized occupant of a rental unit otherwise agree, a landlord does not create a tenancy with an unauthorized occupant by accepting compensation for the use and occupation of the rental unit.34
If a person occupies a rental unit as a result of an assignment of the unit without the consent of the landlord, the landlord may negotiate a new tenancy agreement with that person.35 If the tenancy agreement is entered into within 60 days after the landlord discovers the unauthorized occupancy, the provisions36 concerning lawful rent apply to the tenancy agreement.37 If a tenancy agreement is not entered into within the 60 day period, the unauthorized occupancy shall be deemed to be an assignment with the landlord's consent if the landlord has not applied to evict the occupant within the 60 days of discovering the unauthorized occupancy.38

If a sub-tenant continues to occupy a rental unit after the end of the subtenancy and the tenant has abandoned the rental unit, the landlord may negotiate a new tenancy agreement with the sub-tenant.39 If the tenancy agreement is entered into within 60 days after the landlord discovers the unauthorized occupancy, the provisions40 concerning lawful rent apply to the apply to such tenancy agreement.41 A person's occupancy of the rental unit shall be deemed to be an assignment having the landlord's consent as of the date of the unauthorized occupancy if a tenancy agreement is not entered into within 60 days after the landlord discovers the unauthorized occupancy and neither the landlord or the tenant apply within 60 days after the end of the subtenancy to evict the sub-tenant.42


 

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