Landlords, ask yourselves how this changes your risk-reward equation.
Some will celebrate this new standardized document as a way to further protect vulnerable tenants from unscrupulous landlords, and others will see it as yet another example of the government meddling where they need not.
Let me try to provide you with as unbiased a view as I can possibly take…
For a copy of the new Ontario Residential Tenancy Agreement (aka “Standard Lease”), please click HERE.
There’s a lot of info contained within that link, and the associated pages.
But here’s the bulk of what you need to know about the new lease:
If you sign a lease on or after April 30, 2018, it must be a standard lease.
If you sign a lease on or after April 30, 2018 that does not use the standard lease, renters can ask the landlord for one in writing. The landlord must provide one within 21 days.
Renters cannot ask for a standard lease if they signed a lease before April 30, 2018, unless they and their landlord negotiate a new lease agreement with new terms on or after this date (for example, if the tenant signed a new lease for a one-year term).
Additionally, renters cannot ask for a standard lease if they sign a fixed-term lease before April 30, 2018, and it renewed automatically to a month-to-month tenancy after April 30, 2018.
If a landlord fails to provide the standard lease within 21 days after a renter has asked for it in writing, the renter may withhold one month’s rent.
If the landlord fails to provide the standard lease within 30 days after the renter has begun withholding rent, the renter does not have to repay the one month’s rent. Please note, you cannot withhold more than one month’s rent and you must continue paying your rent for the term of your lease, even if your landlord never gives you the standard lease. However, if a standard lease is not provided, special rules allow you to end your fixed-term lease early.
Landlords and renters can choose to use the standard lease before April 30, 2018. However, the rules requiring the standard lease will only be in effect starting on this date.
That’s taken right from the Ontario Ministry of Housing website.
But what’s actually in the lease itself?
That’s where things get fun!
14-pages, a yellow highlighter, a glass of hot cocoa, and a lonely Saturday night provide some interesting take-aways…
Let me go through the entire agreement, and if you so choose, you can follow along by downloading from the link above.
1. Parties to the Agreement
This is pretty self-explanatory – it’s a section that names the landlord(s) and tenants(s).
The only thing worth nothing here is that the Tenant(s) are all to be listed.
In a typical “Agreement to Lease” on OREA forms, it’s possible to have a person on title, and another “occupant” that is not legally-bound to the transaction.
I always advise my clients to include all occupants on the lease agreeemnt, unless they’re children.
2. Rental Unit
Again, pretty self-explanatory – the residential address, and specification of parking.
The only item to note is this:
This is a clause that should be included in any residential Agreement To Lease.
3. Contact Information
This might seem obvious, but it’s not.
In fact, this is a HUGE deal.
I’ve often lamented how many condos in Toronto are owned by overseas investors, and how some poor tenant with a broken dishwasher will n-e-v-e-r get that thing fixed. All too often, the real estate agent, who is in no way legally permitted to play property-manager, tells the tenant at the onset, “Call me if you have any issues.” And all too often, the tenant gets screwed.
I would love to see this section filled out properly.
The only issue, is that a further section basically provides the landlord a complete opt-out of any responsibilities:
If the landlord does not provide phone and/or email, then we’re right back to where we started.
I can’t tell you how many tenants in Toronto suffer from renting a property from an overseas landlord. I always tell my clients to check up on the landlord, and make sure they’re local. I know the rental market is fierce, but some risks aren’t worth taking.
4. Term of Tenancy Agreement
Nothing really of interest here.
Specifying when the rent is paid, the amount of the rent, and how the rent is paid.
My issue is the following:
It has always been illegal for landlords to ask for post-dated cheques, but that hasn’t stopped……..every landlord in Toronto from asking for them.
I’ve never understood how the government, past or present, has expected tenants to pay rent in such a way that the landlord has any sort of certainty or security.
If the idea here is, “The tenants will pay, don’t worry. And if they don’t, then the landlord can chase them through the Landlord & Tenant Board,” then I would never want to be a landlord, and I would question the government’s motive.
Tenants need protection, no doubt about it. My opinion in Section (3) above clearly conveys my beliefs on that.
But by expecting tenants to pay according to the honour system, we’re simply setting ourselves up for disappointment.
All a tenant need do is provide a deposit for first-and-last month’s rent, then move in, and stop paying. It would take the landlord a year to get the tenant “legally” evicted, and by then, the landlord’s entire investment is blown.
I know I’m talking to some people who believe that homes are for living, and not investing, and that people who can afford to own a second property are “rich” and they can go to hell, but for the rational folk out there – what’s the solution to the payment?
6. Services & Utilities
Great section, outlining absolutely every cost that could be associated with the rent.
Far too many Agreement To Lease documents don’t contain extras, which come up in debate later on.
Although this is just silly:
This is so babyish.
The term “nanny-state” comes to mind.
7. Rent Discounts
Another good idea.
If one tenant in a multi-plex gets a $100/month discount on the rent to shovel and salt the driveway and sidewalk when it snows, and to take out the garbage bins every week, then this needs to be documented, and not on a hand-shake agreement.
8. Rent Deposit
This should shake things up a bit:
First of all, who the hell doesn’t need a deposit? That was rhetorical, so please save me the explanation.
But more importantly, “This amount cannot be more than one month’s rent or the rent for one rental period.”
9. Key Deposit
Another item which is not always included in the Agreement To Lease, but should be.
This one is going to get VERY interesting after July 1st!
Call me naive, but I would think the percentage of the population that smoke cigarettes on a regular basis has declined over the years.
But as for marijuana? We’re going to be one giant puff of smoke come summer.
The lease includes this section:
There are oh-so-many jokes here.
“Provide description of smoking rules.” That’s funny.
But even better – who is “adding additional pages?”
Are drawing diagrams of bongs?
Do we need to draw the elements of Tetrahydrocannabinol?
Jokes aside, I suppose Section (10) in the Standard Lease is more emphatic than a single clause in Schedule A of the Agreement To Lease that says, “Tenant agrees not to smoke in the dwelling.”
11. Tenant’s Insurance
Great, this should be part of the lease.
Again, there’s a checkbox for “There are no insurance requirements,” and I suppose the same landlord that isn’t asking for a deposit is checking that box, but I digress…
12. Changes To Rental Unit
I don’t know why this is included:
“The tenant may install decorative items such as pictures or window coverings.”
To group “pictures” with “window coverings” shows the inexperience of whoever wrote this.
Many condominium corporation’s by-laws prohibit tenants from installing window coverings of a certain colour. And while the Standard Lease does specify that the tenant “must comply with by-laws of the condo,” this is contradictory.
I also wouldn’t want a tenant drilling holes in my drywall, or removing my window coverings to install their own, unless there’s are of higher quality.
13. Maintenance & Repairs
This is fair, albeit ambiguous.
14. Assignment & Subletting
This is pointless:
Now we’re just going to debate the definition of “arbitrarily or unreasonably.”
If I rented to a tenant, and they wanted to sublet, I’d rather break their lease and find a new tenant, provided there’s no loss in rent.
I believe, without question, that the landlord should always have approval of any tenant, in their absolute and sole discretion. The idea of a sublet makes no sense in this market.
15. Additonal Terms
This gets interesting.
The governemnt is providing examples of illegal terms:
Personally, I think the landlords should be allowed to include a “no pets” clause. If a landlord has hardwood floors that he or she values, why should a tenant legally be permitted to ruin them with a 70-pound dog?
I don’t see any reason why protecting tenants’ rights to pet ownership needs to be government-mandated.
I also have a problem with “additonal occupants.”
Are we permitting a tenant to sign a lease, and then have two other people live in the unit, without the landlord’s knowledge? Perhaps I take back what I wrote about Section (1). What’s to stop that tenant from charging a fee? How many bunk-beds can that tenant fit in the living room?
I encourage my landlord clients to include a clause of “The Landlord & Tenant hereby agree that only the person(s) on title to this Agreement To Lease as Tenants shall be permitted to reside in the unit on a full-time basis.”
Tell me that’s illegal, and I’ll tell you why I don’t like this Standard Lease.
So those are the 15 sections of the Standard Lease, and my accompanything thoughts.
Overall, I’d say that this lease is far more reasonable than I would have expected from our government, and in fact, all they’re really doing is enforcing the existing Landlord & Tenant Act.
The problem, of course, is that so many “illegal” clauses have been used by such a high-percentage of landlords, for so long, that it seems as though these are new rules.
The fact that a landlord can’t ask for post-dated cheques is mind-boggling to me, but I won’t belabour that point. I’d say that about 95% of tenants renting condominiums in Toronto submit post-dated cheques, and the rest pay by direct deposit.
The section about deposits is an issue, since many tenants are offering 6-12 month’s rent up front in order to be competitive, and any tenancy advocate will point out that it’s actually illegal for a landlord to accept that, even if offered!
And the pets thing. Yeah, I don’t get it.
But as I said, this Standard Lease is merely enforcing the existing LTA, and seeking to discourage landlords from including illegal clauses. The stage has also been set for a tenant, who identifies an illegal clause, to take action.
I wonder if the Liberal government will now create 1,000 new jobs for “Lease Enforcement Officers,” or something of that nature.
Because the Standard Lease is great and all, but unless they’re keeping a huge database of them somewhere, I don’t know how they plan to oversee this whole thing…