If you plan to invest or acquire properties and be a landlord, or you already did and want to learn how to navigate and survive Ontario’s real estate industry, your journey should begin with knowing the rules and laws. Many investors hire property management companies to deal with the headaches associated with the day-to-day activities of investment properties. In this article, we are focusing on residential property management and rental services. However, need to mention that we also specialize in commercial property management and leasing.
Common legal mistakes landlords make include, not using the standard Ontario lease, using illegal provisions in a rental agreement, not making disclosures to prospective clients, failing to provide the tenants with a safe environment, disregarding the tenant’s rights, ignoring eviction rules, and increasing rent illegally, just to name but a few.
If not hefty fines and losses, even worse the other thing you risk facing for committing such mistakes is jail time and, possibly worse, watching your business sink. Fire departments and codes are serious issues that some landlords don’t abide by.
In the Greater Toronto Area, the Residential Tenancies Act 2006 governs not just the rights, but also the obligations and dozens of other aspects in relation to the relationship between you and the tenant. Consider this guide a comprehensive summary of important things about the Landlord Tenant Act in Ontario you need to know and understand as a landlord. This will be incredibly helpful as you try to find a tenant and manage the day-to-day activities of property management in Toronto.
To begin with, let’s take a look at what a rental agreement is.
What’s a Rental Agreement?
Other terms used to refer to a rental agreement include a tenancy agreement and lease. Put simply, this is a legal contract between you and the tenant in which they agree to pay a particular rent amount for the right to live in your rental unit.
Before 2018, parties to a tenancy agreement were free to draft their versions of the contract. No specific lease form was available at the time.
But in their latest reforms to the act, the province of Ontario made a decision to introduce a standard form of lease, which became effective on April 30, 2018. Tenancies entered into on this day or later are required to use this form.
However, there are specific situations that have been exempted from this requirement, including if you are renting out the following:
- a unit in a care home, say, a retirement home
- specific social and supportive housing
- a mobile home community
One particularly great aspect of this new lease template is that it is drafted in simple language with minimal legal jargon. Some of the details to expect in this agreement include:
- The amount of rent to be paid and the due date
- Things that are part of the rent. For example, parking, air conditioning, and so forth
- Terms or rules regarding the use of the rental unit
- Landlord and tenant responsibilities
A reputable property management company should be abreast and follow the landlord-tenant board guidelines and have a standard lease agreement in place as well.
What is the Landlord Tenant Act In Ontario?
The Landlord Tenant Act in Toronto, Ontario outlines the rental rights that both tenants and landlords have when entering a rental lease agreement. The Landlord and Tenant Board work to implement the actions of the Residential Tenancies Act as necessary.
Canadian Landlord and Tenant Act in Ontario: Rights And Responsibilities
Under the Landlord Tenant Act in Toronto, both you and the tenant have rights and responsibilities. The Landlord and Tenant Board (LTB) created a brochure, which contains information about their roles, how to contact them, and of course, landlord and tenant rights and responsibilities. You can visit LTB offices or their service centers to obtain a copy or print one online.
Here are the rights you have as a landlord in Toronto:
- Setting the rent amount
- Requesting personal information (in a manner consistent with the Ontario human rights code)
- Collecting rent deposit and a key deposit
- Changing the locks
- Adjusting the rent
As for responsibilities, there are plenty of them, the most common important ones being:
- Maintenance and repairs
- Meeting heating requirements
- Giving your tenants a tenancy agreement
- Entering the rental unit without notice under specific circumstances, like when there’s a fire, flood, or other emergencies
Understanding the Complete Landlord Tenant Act in Ontario, Canada
This is crucial information for residential property management and rental services.
Keep both of these resources on file to make your future rental management easier:
- To see the most up-to-date list of the Residential Act in Ontario, you can review the legal documentation here.
- To see a clearer breakdown of commonly asked questions as well as interpretations of the law as established by the Landlord Tenant Board, visit their website.
Ending a Tenancy
Besides landlords, tenants too can end their tenancy. As expected, the process is different for each. As a landlord, you are expected to issue your tenant a notice in writing. Like with a lease, there’s a specific form available on the LTB website that you are supposed to use.
Before giving the eviction notice to your tenant, make sure the reason(s) for your action is within the law. If the tenant fails to move out after receiving the notice, you can apply to the LTB and request them to end the tenancy. Before reaching a decision, the Board will hold a hearing in which both of you will be allowed to explain your positions.
Buildings constructed on or after November 15, 2018 are exempted from rental control.
Each year, a rent increase guideline is set. The 2022 rent increase guideline(update link to this one: https://www.ontario.ca/page/residential-rent-increases)is set at 1.2%.
If you would like to raise your rent beyond this guideline, you’ll have to make an application to the LTB. Your request will be evaluated based on the provisions that govern that situation.
You are allowed to increase the rent once every 12 months period. Like with ending a tenancy, you must also give your tenant a 90-days written notice (form downloadable on the LTB website) prior to the increase.
Because there’s a lot involved with rent increases in Toronto, it would be of great help if you learned more about the subject.
FAQs About the Landlord Tenant Act in Toronto
What Rights Do Tenants Have in Toronto?
All of the rights held by tenants in Toronto, Ontario are outlined in the Residential Tenancies Act. This is a non-conclusive list of many of the most common rights that tenants need to know that they have when renting in Toronto:
- Reasonable enjoyment of the property without interruption by the landlord or others
- Reasonable notice for any repairs or maintenance that will require access to the property
- Reasonable notice for the termination of any lease agreement for valid reasons
- Clear details about rent payment policies
- Maintenance and repairs being completed in a reasonable amount of time
- Receive rent receipts, if requested
- Stay in a property kept in a reasonable state of repair by the landlord
- Be able to use all common areas freely and according to the outlined agreements
If your tenants have any problems with the property or the way you are managing the properties, it is within their rights to contact the Landlord Tenant Board to help solve the issue between both parties.
How Much Notice Does a Landlord Have to Give a Tenant to Move Out in Toronto?
The notice to terminate that a landlord has to give a tenant to move out depends on the type of lease agreement the parties have agreed to.
When the landlord wants to take overuse of the property for non-rental situations or otherwise remove it from the tenant market, the required notice for daily or weekly tenant agreements is 28 days and either 60 days or 120 days for longer rental periods.
In situations where it would be a “for cause” eviction for a specific problem caused by the tenant, the notice period generally ranges from 10 to 20 days depending on the specific problem.
To see the specific number of days notice is required before an eviction case is filed with the Landlord Tenant Board in Toronto, check out this complete guide to ending a tenancy in Ontario.
What Valid Reasons Can a Landlord Use Evict a Tenant in Toronto?
There are several different reasons a landlord can evict a tenant in Toronto. Some of those reasons are considered “for cause” reasons, which generally means the tenant has broken either the lease agreement or the rules of the Residential Tenancies Act; other reasons are about the long-term use and management of the property.
Some reasons a landlord may use to evict a tenant include:
- Unit was abandoned
- The unit was neglected or intentionally damaged
- Both parties agreed to terminate the tenancy
- The landlord intends to convert the property to a non-rental unit
- The landlord sold the property and the new buyer intends to move into the property
- The tenant broke the lease agreement
- The tenant used the property in an illegal way
- The landlord intends to demolish the unit
- Tenant is impairing the safety of others while using the unit
- Tenant not paying the rent
- Tenant is impairing on other residents’ right of enjoyment of their own units
There is a plethora of reasons that may apply, and every situation is going to be a little bit different in how it needs to be handled. To see a more expanded list of reasons landlords can use to evict tenants in Toronto, review the guide released by the Landlord Tenant Board here.
How Long Does it Take to Evict a Tenant in Toronto?
The amount of time it takes to evict a tenant in the Greater Toronto Area will depend on the reason for eviction, whether or not a hearing with the Landlord Tenant Board is needed, and how long it takes tenants to respond to posted eviction notices.
At a minimum, an eviction will take around 20 days if the tenant chooses to move out without a hearing after receiving notice. In most cases, eviction is more likely to take between one and three months.
Keep in mind this is during ‘normal times” pre-pandemic. As of the time of editing this article in early 2022 the time to evict a tenant in Toronto is taking about 6-8 months due to the backlog.
How Much Does it Cost to Evict a Tenant in Toronto?
The cost of evicting a tenant is going to include a number of factors:
- Lost rent while waiting for eviction
- Cost of filing for eviction case with the LTB ($201 at time of writing)
- Cost of having a sheriff execute an eviction order if the tenant doesn’t leave willingly (around $400)
- Cost of filing to garnish wages to receive owed rent (around $180)
- Cost of hiring a paralegal to help, if applicable
The final cost is going to depend on the exact eviction situation, as well as how willing the tenant is to leave on their own once the case is decided. Overall, eviction tends to be a costly process for landlords. That’s assuming that the disgruntled tenant didn’t vandalize the property before leaving as well.
What is The Eviction Process in Toronto like?
Every eviction is going to be a little bit different because of the particulars of unique situations, but the overall process is going to go something like this:
- Send notice to the tenant about the potential eviction; must include a date for problem rectification if applicable.
- Wait for the required number of days for the tenant to rectify the problem or respond to the notice.
- Submit the appropriate forms to the Landlord Tenant Board to move forward with the eviction.
- Once the application is approved, a hearing date will be set if applicable and the case will be decided at the hearing.
- The landlord will then be able to file the eviction order with the local Sheriff to have the tenant evicted if they do not leave willingly in the appropriate amount of time.
Some of these steps may need to be modified or skipped depending on the exact reason for eviction; find out more here.
In general, as a landlord, make it your goal to always learn, understand, and comply with all aspects of the Landlord and Tenant Act in Ontario. However insignificant a mistake may sound, say, filling out a section of the eviction notice incorrectly, it could be the reason for you losing a case with your tenant.
If you need assistance interpreting or navigating the Residential Tenancies Act in Toronto, reach out to a lawyer and/or paralegal. If you already work with a reputable property management company, they do a lot of the heavy lifting on your behalf.
Also, bear in mind your success as a landlord largely depends on who you choose as a tenant. Without proper background checks and screening, you risk the possibility of ending up with a “tenant from hell.” Unfortunately, getting rid of them can be an overwhelming process. You’ll spend more time, effort, and money than you’d want – a situation we can all admit doesn’t sound good.
Fortunately, you can avoid all that by enlisting the help of a competent property management firm with ample experience in the tenant screening process. The goal is to avoid getting into complex situations by selecting the right tenant for your property in the first place.
Buttonwood property management and rental services have been in business for eleven years with several hundred properties under management. To date, we have had only four evictions for non-payment of rent and two of those were for properties that we took over that were already tenanted and we didn’t place a tenant ourselves. Our track record shows that our proprietary tenant screening processes and procedures eliminate eighty percent of the issues beforehand. Keeping your investment property tenanted and the rent flowing in on time provides you with better returns on investment and we can help make that a reality.