Choosing a rental unit to lease can be a difficult decision. It can be challenging to find a place in an ideal location for work, in a neighbourhood you like, with the amenities you seek, at the price point that fits your budget and with terms that suit your situation. So, entering into a lease agreement that works for your needs is crucial.
Likewise, if you are a landlord renting out your property, you want to ensure that your tenant has the same understanding as you, and that you will not encounter any issues during the term of the lease.
Below are a few key things for both tenants and landlords to keep in mind.
Know The Duration Of The Lease Agreement
Regardless of what you discuss verbally, always carefully review the final written lease agreement to ensure that the term you agreed to is recorded accurately in writing. If you are planning to move in a year, and you inadvertently agree to a two-year lease, you may be stuck finding a subletter to finish your lease term, or worse, trying to negotiate your way out of the lease if your agreement does not provide for subletting.
On the flip side, as a landlord who wants to avoid searching for a new tenant within a year’s time, you may want to insist on renting to a tenant who is open to a two-year term.
Find Out About Subletting Provisions
As a tenant, it is wise to ensure that your lease agreement provides for the option to sublet, particularly if you expect to change work locations in the near future, or are planning to take an extended vacation.
As a landlord, you may want to retain some discretion over who your tenant can sublet to. If so, you will want to ensure that the language of the subletting provision provides for your approval as to whom the tenant sublets to. Additionally, you may want to ensure that your tenant is aware of his or her continued obligation to pay rent in the event that a subletter defaults on payment.
Even where an agreement provides for the landlord to retain discretion over who may sublet the unit, it is expected that the landlord not unreasonably withhold consent to sublet. What qualifies as “reasonably withholding consent” often becomes the subject matter of applications to Ontario’s Landlord and Tenant Tribunal (LTB).
What Can Happen If a Renter Sublets Without Permission?
Often, the tenants want to sublet, agree to get their landlord’s consent before subletting, but then breach the terms of their lease when it requires that consent. Unfortunately, subletting without the consent of the landlord may be a sufficient breach, in and of itself, for the landlord to seek a court order for eviction.
Two recent Landlord and Tenant Tribunal decisions wherein tenants were evicted solely on the basis that they were subletting without their landlords consent are CEL-59448-16 (Re), 2016 CanLII 88314 (ON LTB) and TNL-61227-14 (Re), 2014 CanLII 70237 (ON LTB). In the former case, the landlord discovered other tenants were living in the unit after difficulty reaching the tenants. Months earlier the tenants requested to sublet the unit, did not receive consent from the landlord, but did receive an offer to try find another tenant, which they did not accept. In the latter situation, the tenant never requested permission to sublet the two-bedroom unit but acknowledged that he was renting rooms for a time period and would eventually be returning to occupy the unit. The unit had been altered to accommodate multiple living arrangements typical of a room housing and it was admitted there were four occupants living there.
Be Aware of Rent Payments & Increases
Rent payments often account for a substantial portion of a person’s disposable income. As a tenant, you may want to ensure that the amount you are paying is within your budget, and that you will not be financially forced to leave due to a rent increase after the initial term of the lease.
Although a two-year rent term can seem daunting, one advantage is that such agreements often provide for a steady monthly rent payment. One-year leases that convert into month-to-month leases often permit a landlord to increase rent following the first year. Ontario’s Residential Tenancies Act provides that rental units built after 1991 are not subject to rent controls. As such, if you agree to an initial monthly rent payment that approaches your budget limits, you may find yourself pushed out of your unit sooner than you would like if you find yourself unable to afford the increased rent.
If you are a landlord, you may want to do a credit check and seek information about a potential tenant’s salary in order to ensure that monthly payments will jot be a problem. It can be difficult to quickly evict a tenant in certain circumstances, even where he or she has accumulated rent arrears.
What Can Happen If Rent Isn’t Paid On Time?
Non-payment is often an area in dispute between landlords and tenants, especially where it results unrecoverable losses to the landlord. However, even where a tenant has amassed arrears, the LTB can sometimes be sympathetic to the financial burdens faced by tenants, including by giving him or her additional time to gather the money to pay their arrears and their ongoing rent.
Unfortunately, where the tenant is still unable to pay, the landlord is out not only the amount of the arrears, but also the additional months unpaid by the tenant. Although the tenant still owes the landlord this money, it is often difficult to enforce orders for payment against those of limited financial means. This is why it is important to assess a potential tenant’s financial situation and his or her ability to make rent payments before entering into a lease agreement with him or her.
In TSL-78752-16 (Re), 2016 CanLII 88332 (ON LTD), a tenant who owed two months of rent arrears on a brand new lease was given two additional months to make payment before the landlord was permitted to evict. The tenant, who presented no concrete plan, said he recently lost his job but may try borrow funds from his family and friends in order to pay the arrears.
Get Professional Advice From Our Residential Landlord, Tenant & Real Estate Lawyers in Richmond Hill or Newmarket
While both parties need to be scrutinizing of the other, whether you are a landlord or tenant, you should read the lease carefully and ensure that all the terms you seek are present, clear and in writing before signing it. In Richmond Hill and Newmarket, our landlord/tenant lawyers can help you to negotiate your next lease or help you to resolve related disputes. Our real estate lawyers in Richmond Hill and Newmarket can help if you wish to sell or buy the property you are renting. Call us at Epstein & Associates at 1-866-463-2266.