Residential lease agreement_ontario

Prepared By: Page 1 of 13
Michael Carabash

Residential Lease Agreements in Ontario

DISCLAIMER: Please note that the information provided in this DL Guide is NOT legal advice and is
provided for educational purposes only. Laws are subject to change and without notice. This DL Guide may
be outdated. If you need legal advice with respect to drafting, revising, negotiating or resolving a dispute
concerning a Residential Lease Agreement, you should seek professional assistance (e.g. make a post on
Dynamic Lawyers). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers
registered to help you. You can contact Michael Carabash directly at michael@carabashlaw.com.

Last Updated: April 2010

© 2008-2010, Dynamic Lawyers Ltd. All Rights Reserved.

Michael Carabash, B.A., LL.B., J.D., M.B.A. michael@carabashlaw.com
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Residential Lease Agreements in Ontario Page 2 of 13

Table of Contents
What is a Residential Lease Agreement? ....................................................................................................... 3
How are disputes resolved? ............................................................................................................................ 3
What are the Landlord’s Obligations under the Act? ..................................................................................... 3
Tenant Applications to the Board ................................................................................................................... 5
What are the Tenant’s Obligations under the Act? ......................................................................................... 5
Terms of a Basic Residential Lease Agreement ............................................................................................. 7
Void Terms of the Residential Lease Agreement ........................................................................................... 7
Term................................................................................................................................................................ 7
Termination .................................................................................................................................................... 8
Security Deposit ........................................................................................................................................... 11
Rent ............................................................................................................................................................... 11
General Terms .............................................................................................................................................. 11
Rental Applications ...................................................................................................................................... 12
About Us ....................................................................................................................................................... 13



What is a Residential Lease Agreement?
A Residential Lease Agreement is a contract between a Landlord (the owner of a rental unit) and a Tenant
(the person wishing to occupy the rental unit and pay rent). In Ontario, these types of Agreements are
governed by the Residential Tenancies Act, 2006 (the “Act”). The Act came into effect on January 31, 2007
and is designed to set the rules for most residential rental housing in Ontario. Importantly, the Act says that
any provision in a Residential Lease Agreement that is “inconsistent with this Act or the regulations is void”
(section 4). What does this mean? Well, as you’ll see below, if you have a no-pet clause in your Residential
Lease Agreement and you think you can enforce it - think again! Section 14 of the Act says that such a
provision is void! Ouch! We’ll get more into this later on…

How are disputes resolved?
If there is a dispute concerning the application of the Act (e.g. the Landlord or Tenant’s obligations,
termination of the tenancy, rent, etc.), then the Landlord or Tenant may apply to the Ontario Landlord and
Tenant Board (“Board”) for a resolution. The Board has the exclusive authority to determine applications
under this Act. The Board is governed by the Act and the Statutory Powers Procedure Act, and has its own
Rules of Practice. If you need to bring an application to the Board, you should consult with a lawyer as to
how to do this (they will know the documents and processes better than anyone else).

What are the Landlord’s Obligations under the Act?
The Act imposes a number of obligations on Landlords. Even if a Residential Lease Agreement says
otherwise, it is not enforceable if it is ever brought before the Board on an application for a determination.
Here are SOME of the Landlord’s statutory obligations:


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Terms of a Basic Residential Lease Agreement
In what follows, some of the key terms and conditions of a basic Residential Lease Agreement will be
examined.

Void Terms of the Residential Lease Agreement
To begin, it’s worth noting that the following terms in a Residential Lease Agreement are not enforceable
under to the Act (so putting them in is only for show):

No pet clauses (i.e. prohibiting the presence of animals): section 14
Acceleration clauses (i.e. saying that all or part of the remaining rent for the term of the tenancy is due
because the Tenant defaulted in paying rent or carrying out an obligation: section 15
The requirement to provide post-dated cheques or permit automatic debiting of a bank account to pay
the rent: section 108.

Term
The Term of a Residential Lease Agreement begins on a certain date (as specified in the Agreement) and
continues for a term (e.g. 1 year, 6 months, etc.) until it is terminated in accordance with the Act. Yes, you
read correctly: the tenancy can ONLY be terminated in accordance with the Act. It cannot expire. So what
happens at the end of the initial term? Well, if the initial term was for fixed period (e.g. 1 year) and the
Agreement is not renewed or terminated, then the Landlord and Tenant SHALL BE DEEMED to have
renewed it as a MONTHLY Residential Lease Agreement containing the same terms and conditions that are
in the expired Residential Lease Agreement: section 38(2). If the initial term was simply daily, weekly, or
monthly and it was not renewed or terminated, then the Landlord and Tenant SHALL BE DEEMED to have
renewed it for ANOTHER DAY, WEEK, OR MONTH Residential Lease Agreement (as the case may be)
containing the same terms and conditions that are in the expired Residential Lease Agreement: section 38(2).



Security Deposit
The Act says that a Landlord can only require a Tenant to pay a rent deposit before entering into a Residential
Lease Agreement. The amount that the Landlord may require cannot be more than whichever of the
following is lesser: the rent for one rent period (e.g. if the rent period is 1 day, 1 week, 3 months, etc.) or the
rent for one month. Typically, if the rent period is more than 1 month, then the Landlord cannot require the
Tenant to pay more than one month’s rent in advance: sections 105 and 106.

Rent
The Landlord must provide - free of charge - a receipt for the payment of any rent, deposit, arrears, or any
other amount paid to the Landlord: section 109. A Landlord cannot increase the rent charged to a Tenant for
a rental unit until 12 months have elapsed since the last increase in rent or since the day the rental unit was
first rented: section 119. The Landlord must also provide 90 days written notice to the Tenant of their
intention to increase the rent: section 116. There is a guideline under the Act for determining how much the
Landlord can increase the rent by. The Landlord and Tenant can agree to increase the rent charged to the
Tenant above that guideline if the Landlord carried out or undertakes to carry out a specified capital
expenditure in exchange for the rent increase or the Landlord has provided or undertakes to provide a new or
additional service in exchange for the rent increase: section 121. The Landlord can also apply to the Board
for an order permitting the rent to be increased by MORE than the guideline in limited circumstances relating
to the rental unit. These circumstances include extraordinary increases in the cost for municipal taxes and
charges or utilities, eligible capital expenditures, and operating costs related to security services: section 126.
If you’re a Landlord or a Tenant and need advice concerning rent, seek professional help.

General Terms
The General Terms at the end of the Residential Lease Agreement help to fill in some gaps. Since some of
the terms you would normally find here (e.g. assignment, governing law, and waivers), are already dealt with
in the Act, they do not need be mentioned in this part of the Agreement. That said, the parties can still
acknowledge that they understand and are entering into the Residential Lease Agreement voluntarily. They
can also agree on how the Agreement can be amended (if at all). Finally, they can acknowledge that the
Agreement supersedes all other Agreements – whether oral or written – relating to the lease of the rental unit.


Residential lease agreement_ontario

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