If your tenant wants to break the lease that means they want to leave your rental unit before the tenancy agreement expires. For example, if a renter signed a one-year lease but wants to vacate in month eight, this would be considered breaking the lease.
One of the many other reasons that may constitute breaking a lease is failure to comply with the terms of the lease.
Of the many challenges you will face as a landlord, your tenant breaking a lease can be one of the most taxing. One way to fend off some problems that may come as a result of this situation is to be extra careful when filling out the tenancy agreement. (This is the standard form of lease and is a requirement for tenancies entered into on or after April 30, 2018.)
Below, we explore more situations that revolve around the tenant breaking the lease in Ontario and how to go about each. But before we go into that, you may wonder if a landlord can break a rental lease. Let’s take a look.
Can You Break A Rental Lease In Ontario As A Landlord?
Yes, you can. Initially, there were some landlords who would act dishonestly and in bad faith. For example, landlords would break the rental lease and evict the tenant from the rental unit so they could re-rent the property at a higher rate and make more money.
To mitigate such situations, the Ontario Landlord and Tenant Board (LTB) introduced new changes for landlords who would like to end the tenancy due to reasons such as:
- A family member or purchaser requiring the unit.
- The need to demolish, repair, or convert the rental property into other uses.
- Tenant failing to comply with the terms of the lease agreement; e.g., non-payment of rent, interfering with the peace of other tenants, damage, overcrowding, committing illegal acts, and so on.
These changes are reflected in the updated forms that you are required to fill out and submit before ending the tenancy. The forms are specific to the different reasons you may have for ending the tenancy.
Alternatively, you can reach an agreement with the tenant to end the tenancy. In such a case, you’ll be required to fill out the Agreement To End Tenancy Form (Form N11).
Can Tenants Break A Lease Agreement?
Usually, if your tenant signed a lease in which they consented to rent the unit for a specific period of time, they cannot break the lease, unless:
- You reach an agreement with the tenant to break the lease.
- You allow the renter to assign the rental property to another person.
- The renter wants to move to escape abuse and/or sexual/domestic violence.
- The LTB issues an order to end the tenancy agreement early because you’ve not honored your legal obligations as a landlord. This includes things like not maintaining the rental property, unlawfully entering the rental unit, interfering or withholding vital services, harassing the tenant, and so on.
In the case of assigning the rental unit to another person, you have the right to refuse to rent your unit to the new tenant, provided you have a valid reason for doing so, say, the new renter has a bad credit history. You are also allowed to charge the tenant the costs incurred in performing a new tenant screen.
Failure to respond to the tenant’s request to assign the rental unit after seven days or rejecting the new assignment qualifies the tenant to issue you a Notice To End the Tenancy (Form N9), which they are required to give you within 30 days after the date the request was made.
Also, they are allowed to apply to the LTB to resolve the matter if they disagree with your refusal to approve the assignee or the costs incurred to vet him/her them.
What Happens If Tenant Breaks Lease And Vacates Without Notice?
As we mentioned earlier, a tenant is allowed to break the lease under specific circumstances allowed by the Residential Tenancies Act. But in case you are wondering about what to do when a tenant breaks the lease illegally and/or vacates without notice, here’s a proper approach to take.
The act allows you to file a lawsuit if the tenant breaking the lease in Ontario wants to vacate or vacates the property without following the required procedures. Remember, a lease agreement that constitutes a fixed term implies the renter owes you rent until the unit is leased out again or the lease expires.
However, if they follow the right procedures, you can even help them transfer the tenancy to another person, but if they are unable to find a better new tenant, it’s up to you to decide whether or not to enforce other measures of recouping the losses. You can insist that they continue paying the rent until a replacement is found, the lease period expires, or you can release them from the agreement.
If the tenant disappears, you can track them down using the information they shared during the rental application and lease signing. This is why you should verify tenant information during the application process before renting out your unit. The more accurate and complete the information is, the more likely you are to track them down.
Because losses are likely to occur when a tenant breaks the lease, according to the Residential Tenancies Act, you are supposed to do everything in your power to mitigate that.
Though you can pursue the tenant for unlawful damage if the circumstances of your separation justify it, most landlords choose not to because such an endeavor takes a lot of effort, time, and money. A landlord could choose to rather invest this effort, time and money in finding a new tenant.
In addition to incurring advertising costs, you have to spend time showing your property to prospective tenants and properly screen those you consider to be better renters. After all, it’s the best way to ensure you don’t end up falling for another renter who is likely to dishonor the lease.
If you are not sure how to go about finding good tenants that will honor the lease agreement, seek the help of a property management company that has years of experience in tenant screening.