We get asked this a lot: “A tenant is subletting my property, what should I do?”
Maybe you’ve noticed strangers in your building or received complaints from other tenants about them or you signed a lease with a tenant prohibiting that, but then you are shocked to find someone else living on your property.
What should one really do?
Well, the answer isn’t as straightforward as we’d all like it to be. Is it illegal? Absolutely yes, particularly if your lease is subject to the Ontario Residential Tenancies Act and the tenant did so without your consent.
In Ontario, residential tenants have the right to sub-rent or assign their rental unit provided but with the consent from their landlord. Note that assignment and subletting don’t refer to the same thing.
The former is where the original tenant transfers the lease to a new tenant then moves out for good. In a sublet, however, the original tenant has plans to move back in. Meanwhile, the sub-tenant will be paying him/her the rent as he/she continues to pay the landlord theirs.
What makes this action illegal? Let’s find out.
Why Sub-renting without Permission is Illegal
First off, it’s important to note that section 2(2) of the Residential Tenancies Act (RTA), which talks about subletting, is limited to tenants who rent out their units for a short period of time. Owners of the property in question or commercial tenants subletting their units aren’t affected by this law.
However, as a landlord, you stand a chance of facing legal action if a condominium board finds you in violation of their rules against short-term rentals. Worse, you will have to foot the Board’s legal fees.
A good example is when a tenant rents out their unit on Airbnb with or without the landlord’s permission. What makes it a sublet is that the tenant probably vacates the unit, allowing the guest to stay there for a short of period of time. Once they check out, the tenant moves back in.
As we mentioned earlier, tenants don’t have the right to sub-rent their apartments, condominiums, houses, or other rented properties without the consent of a landlord. This is clearly stipulated under Section 97 of the RTA.
Doing so would be a direct violation of the RTA, meaning their action may be categorized as an illegal act.
On the landlord’s part, if you intentionally allowed the tenant to sublet the rental in the full knowledge of the existing rules set by the condominium board against short-term rentals, expect to face legal action.
Another section of the RTA that makes this illegal on the tenant’s part is section 134(3), which forbids tenants or anyone acting on their behalf from sub-renting a rental unit and collecting an amount that is greater than the lawfully charged rent by the landlord. Deposits, commissions, fees, premiums, penalty, and other related charges are also prohibited by the law.
That simply means that even if the tenant has your consent, committing either of what we’ve mentioned still makes the whole process illegal.
As the landlord, you can’t unreasonably withhold your consent, unless you have a valid reason, the most common one being the tenant didn’t pass a credit/background check. However, if your tenant feels that you are not being reasonable, they can apply to the Landlord and Tenant Board (LTB) to force you to do either of two things: agree or cancel the lease.
If it comes to your attention that your tenant has sublet the rented property without your permission, you have up to 60 days to apply to the LTB requesting them to terminate the tenancy. Should the 60 days expire without you taking any action, it will be assumed that you’ve accepted the new tenant.
But before doing that, there are a few other steps you must take:
Step 1: Find Out if the Sublease has Actually Taken Place
First, you need to be sure that the sub-tenant isn’t just house-sitting for the actual tenant. You can do this by interviewing both. Once you are completely sure that the original tenant is indeed sub-renting, come up with a record of when this occurred and the terms under which the new tenant is staying in the unit.
Step 2: Contact Your Original Tenant Officially
If you are able to track the actual tenant; i.e., the one you originally signed a lease agreement with, notify them of their breach of your lease agreement; i.e., if your lease agreement forbids subletting.
Do so in writing and remember you only have a maximum of 60 days before this opportunity expires. Make sure you’ve stated the measures you plan to take if the situation isn’t rectified within a period of say, 30 days.
If you can’t track the original content, find out from the sub-tenant because that’s the person they are probably paying their rent to and, therefore, they might have an idea of their whereabouts.
Step 3: Take Legal Actions
In the event your original tenant fails to rectify the situation within the time frame you’ve given them, the next step should be to consider the legal actions at your disposal. This may include applying to the LTB requesting them to cancel the tenancy since the tenant may no longer have the right to stay on your property.
Also, sub-renting without permission constitutes an infringement of your lawful right, interest, or privilege as a landlord, which is another ground for termination of tenancy.
Generally, as a landlord, make it your goal to know and understand your rights and obligations with regards to the issue of new tenants taking over a lease. And before opting for extreme measures, try and find a solution that works for everyone, especially where the renter is unable to afford to live in your property and needs help identifying a new tenant to take over the lease. This way you will save the time spent making costly applications to LTB and the legal fees involved.