Rental Units and Condominiums – Ontario’s New Standard Form Lease

Until recently, landlords and tenants in Ontario were operating in something of a Wild West atmosphere when it came to the form and content of residential leases. While the Residential Tenancies Act, 2006, S.O. 2006, c 17 (“the RTA”) contains many provisions as to the rights and obligations of landlords and tenants, until April 30^th there was no standard form lease. This lack of standard form meant that a wide variety of leases could be found, including many templates that had been taken from other jurisdictions outside of Ontario and did not necessarily cover the correct and relevant laws. Often leases would include provisions that were not permitted under the RTA, but the landlords were either unaware that the provisions were in violation, or hoped that the tenants were unaware. In other cases, tenants and landlords were relying on verbal agreements, which are very difficult to enforce as there is little or no proof of the intended terms of such an agreement.

Starting April 30^th, 2018, landlords of residential rental units are required to use the standard lease template developed jointly by the Ministry of Municipal Affairs and Ministry of Housing, which oversee the RTA. The purpose of the standard form (which can be found here) is to ensure that landlords and tenants are aware of their rights and obligations under the RTA, as well as to eliminate the inclusion of illegal terms and avoid the lack of clarity associated with verbal agreements. All of this is aimed at the goal of reducing disputes that end up before the Landlord and Tenant Board.

Who Must Use the Standard Lease?

Most residential units in Ontario require the standard form lease agreement, including:

• single and semi-detached houses;

• apartment buildings;

• condominium units; and

• secondary units such as basement apartments.

There are some exemptions for those tenancies that have special considerations under the RTA, such as care homes, mobile home parks, and social and supportive housing. The government does intend to develop standard form leases to address the unique needs of those rental tenancies at some point in the future.

What Does the Standard Lease Contain?

The standard lease template has several mandatory fields that must be filled out by the relevant person (landlord or tenant), and which cannot be changed or taken out of the lease agreement. These include: the names of the landlord and tenant; the rental term, rental amount, and services (such as snow removal, utilities, etc.) that are included in the rent; and other terms such as rent or key deposits, rules regarding smoking, and renter’s insurance.

As well as the mandatory terms, there are optional terms that landlords and tenants can choose to include in the agreement, which may be applicable to specific rental units. However, any term that is not consistent with the mandatory terms or with provisions of the RTA will be considered void and unenforceable.

In addition to the specific terms of the lease agreement, the standard form lease also contains general information for both tenants and landlords, setting out their rights and responsibilities and describing certain terms that are void and unenforceable under the RTA. Topics addressed in this portion of the lease agreement include how to end a tenancy, subletting, pets, guests, and a landlord’s entry into the unit.

Impacts on Tenancies Entered Into Before vs After April 30th, 2018

For units rented prior to April 30^th, 2018, the landlord is not required to use the standard form lease agreement. If the tenant and landlord agree to negotiate a new lease based on the standard form lease, they are entitled to do so, but it must be on consent of both parties.

If a unit was rented for a fixed term before April 30^th, and the tenancy then goes month-to-month, the standard lease form does not apply to the month-to-month tenancy, again unless the landlord and tenant agree to renegotiate the lease.

For units rented on or after April 30^th, the landlord must provide a standard lease form as the lease agreement. If the lease agreement is not the standard form, the tenant can ask the landlord for a standard form agreement in writing, and the landlord must provide one within 21 days of the request.

If the landlord does not provide the lease agreement within that time, the tenant is entitled to withhold up to one month’s rent; if the standard form is not provided for more than 30 days after the request, then the tenant does not have to pay that one month’s rent at all. If the landlord provides the standard form after 21 days but before the 30 days have passed, the tenant must pay the month’s rent upon receipt of the standard form agreement.

A tenant is not permitted to withhold more than one month’s rent as a result of a landlord’s failure to provide the standard lease agreement, and all rent that comes due after the withheld month must be paid in full and on time.

If the landlord does not provide the standard lease form within 21 days after the tenant’s request, and the tenant wishes to end the tenancy, there are special rules under the RTA which allow that to happen. The tenant may provide the landlord with 60 days’ notice to terminate the lease, even for a fixed-term lease that has not reached the end of the rental term.

Even if the landlord does provide the standard lease, if the landlord has included additional terms which were not originally part of the lease agreement and the tenant disagrees with the terms, unless they are mandatory under the standard lease form then the tenant is not obligated to accept the terms. The tenant then has the option to provide the landlord with 60 days’ notice of termination of the tenancy, but the notice must be provided within 30 days after receiving the standard lease from the landlord.

Whether terminating because a standard lease was not received or because the standard lease included terms to which the tenant does not agree, either way the effective date for termination must be (as is usual under the RTA) the last day of a rental period (e.g. the end of the month).

Impact on Rental Units in Condominiums

A common problem that we have seen when dealing with rental units in condominiums is that far too often, the tenant does not realize that they are living in a condominium, the tenant does not know the rules and requirements of the condominium, or the tenant does not realize (or accept) that the rules and requirements of the condominium apply to the tenant as well as to unit owners. This leads to frequent disputes between tenants, landlord unit owners, and condominiums, which often become even more complex than the standard RTA dispute because the condominium has no standing before the Landlord and Tenant Board so must go to court if the landlord unit owner is unwilling or unable to enforce against the tenant.

With the new standard form lease agreement, there is a section in which the rental unit is described. This section includes a question as to whether or not the rental unit is a condominium, and states that “If yes, the tenant agrees to comply with the condominium declaration, by-laws and rules, as provided by the landlord”. While landlord unit owners are required to provide that information to the tenants under the Condominium Act, 1998, too often landlords would fail to do so either because they did not know of the obligation, or could not be bothered. With this requirement set out clearly in the standard lease form, landlords will be aware of this obligation and tenants will be aware of the obligation to comply. Hopefully this will lead to far fewer disputes and enforcement issues between condominium corporations, landlord unit owners, and tenants. 

Another positive for the condominium world is that the standard lease agreement has two separate sections where the issue of pets in condominium rental units is addressed. The section dealing with additional terms makes it clear that landlords cannot prohibit pets in rental units, unless the rules of the condominium have restrictions regarding pets, in which case a tenant must comply with those restrictions. As well, in the section of the agreement that provides general information, it again explains that landlords cannot prohibit pets or evict a tenant for having a pet, except for in certain circumstances which include that the rules of the condominium do not allow pets.

Summary

At the end of the day, the hope and intention of the standard form lease is to clarify the rights and obligations of tenants and landlords, and to hopefully reduce the number of disputes that end up before the Landlord and Tenant Board. For those who work and/or live in condominiums, there is the additional goal of ensuring that tenants are made aware of, and comply with, the rules and requirements of the condominiums in which they live. Fingers crossed that the standard lease form brings a little law and order to the Wild West of residential tenancies in Ontario.