Saturday, June 23, 2018

Ontario Landlords must now use the Standard Government Lease

Written tenancy agreements for Ontario's residential landlords have been inconsistent and confusing.  Existing leases are jam-packed with illegal clauses and in some 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.  Too many people buy off-the-shelf leases that don't conform with Ontario law, and that gets them into trouble because they think the terms can be enforced.

The Provincial government, as part of recent amendments to the Residential Tenancies Act (the 'RTA') which governs all residential landlords and tenants in Ontario, introduced a new mandatory lease.  The new law came into effect on April 30th of 2018.  All residential tenancies in Ontario must use Ontario's new Standard Form Lease that attempts to remove some confusion from the current chaotic state.  No home-made leases allowed!  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 landlord may also lose up to a month's rent if landlords don't provide the lease within 30 days of the tenant making the request.

The government's new 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. 
To find out more about the lease, 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

There's been panic and confusion in the landlord community.  People think the sky is falling.  But relax....nothing has changed in the substantive law (other than the requirement to use the government's 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.  With our new Appendices to the bare-bones government lease, you will be well protected.

No comments: