Thursday, February 15, 2018

STANDARD LEASES COME TO ONTARIO LANDLORDS

Written tenancy agreements for Ontario's residential landlords have been confusing and inconsistent.  The leases are jam-packed with illegal clauses, confusing provisions and in many cases, there is no written lease at all.  Some small landlord investors are of the mistaken belief that it was easier to terminate tenancies if there is no written lease.  A lot of landlords also confuse the term lease with the concept of lease term.

The Provincial government, as part of recent amendments to the Residential Tenancies Act (the 'RTA') which governs all residential landlords and tenants in Ontario, has introduced a new mandatory lease.  Starting April 30th of 2018, all residential tenancies in Ontario must have a written lease.  Not only that, the landlord must provide the tenant with Ontario's new Standard Form Lease that attempts to remove some confusion from the current chaotic state.  No home-made leases!  Its use will be mandatory for practically all tenancies, including condos, apartment buildings and basement apartments, and will also replace the agreements Ontario Realtors traditionally have provided.

There will be penalties for those not following the rules.  The lease must be provided to the tenant prior to the commencement of the tenancy.  If the landlord does not provide the lease within 21 days after the tenant has made a written request, the tenant may give 60 days notice to terminate a yearly or fixed-term tenancy using an LTB N9 notice.  If the landlord provides a tenant with the standard lease after the tenant has asked for it, but the tenant does not agree to the proposed conditions (for example, a surprising new term is added), the tenant has 30 days in which to give the landlord 60 days notice to terminate the tenancy. The landlord may also lose up to a month's rent if landlords don't provide the lease within 30 days of the tenant starting to withhold rent.

There is no requirement to use the new Standard Form Lease for existing tenancies, including those that subsequently become month to month after April 30th, 2018.  The government's Lease has two parts, the first being some basic provisions along with a place for signatures at the bottom, and the second part is an explanation on some of the finer points, details about what provisions may or may not be legal etc.  In Ontario, you cannot contract out of the RTA, so landlords and tenants signing the new lease can be assured that what they are signing is enforcable through the Landlord and Tenant Board.

While well intentioned, the lease is fairly bare-boned.  Fortunately the government is permitting additions to the lease in the form of an Appendix which the landlord may draft.  But keep in mind, the provisions in the Appendix cannot contradict what's in the lease, and cannot violate the RTA.

Prudent landlords will need far more than the Standard Form Lease to protect their interests.  Our firm is providing our clients with an Appendix to be used in conjunction with the Standard Form Lease.  However, any landlord can purchase it as part of our Landlord's Forms package available here:

Landlord Forms Package

The package not only contains customized forms covering all aspects of the landlord and tenant relationship, but contains 2 bonus Powerpoints, one on rent control and one on evictions.  These are normally part of our webinar program that has been so successful.  Those interested in our webinar series can find the information here:

Landlord / Investor Webinar Series

To find out more, you can review information at the Ministry website here:

 Ministry of Housing Info for Leases

And you can download a copy of the Standard Form Lease from the Ontario Government's forms repository here:

Ontario's Standard Form Lease

I've heard panic and confusion in the landlord community, people think the sky is falling.  Relax.  Nothing has changed in the substantive law (other than the requirement to have the lease and the associated penalties and remedies).  All that's changing is that the wild west of  tenancy agreements is becoming more civilized, predictable and consistent.

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