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Rental Agreements

A rental agreement between a landlord and a tenant can be oral, written, or understood from the circumstances. Sometimes it is informal; sometimes it is more formal with many terms and conditions. A rental agreement is sometimes called a tenancy agreement.

A rental agreement is a contract. One party to a contract cannot change the terms of the contract, with the exception of a landlord's right to raise the rent on proper notice. In other cases, changes can only be made if the landlord and tenant both agree to the changes.

The basic terms of a rental agreement are...

  • The landlord gives the tenant the right to live in the rental unit, and agrees to maintain the unit and the services (appliances, furnace, and utilities) in good working order.
  • The tenant agrees to pay rent and to pay it on time.

If either party breaks the contract they could have to pay the other party for any damages that result. In addition, the tenant may be evicted for non-payment of rent and other reasons allowed by law.

There are Standard Conditions that must be part of every rental agreement. Landlords and tenants cannot agree to change any of these conditions. They also cannot agree that any other part of The Residential Tenancies Act, 2006 will not apply.

Written Agreements

If a copy of the written agreement is not provided within 20 days, the tenant's duty to pay rent is suspended.

If a landlord and tenant have a written agreement, The Residential Tenancies Act, 2006 requires that certain information be included in the written agreement. Required information includes:

  • Standard Conditions
  • correct legal names of the parties and address of the rental unit
  • date the agreement was made
  • address for service and telephone number of the landlord or agent and an emergency contact number
  • type of tenancy (weekly, monthly or other)
  • start date and, if tenancy is for a fixed term, end date (otherwise it will be considered a monthly tenancy)
  • amount of rent, when it is due and whether it changes with the number of people living there (if so, by how much)
  • amount of any security deposit and when it is to be paid

The written agreement must also state what services and facilities are provided and who pays for the utilities. The landlord must give a signed copy to the tenant within 20 days of when the tenant signed it. Putting the rental agreement into writing is one way to prevent disagreements later on.

If the contact information is not provided as required, the tenant's duty to pay rent is suspended. The Office of Residential Tenancies (ORT) recommends that landlords also provide tenants with a copy of the Standard Conditions even when the rental agreement is not in writing.

Verbal Agreements

If the rental agreement is not in writing, it is still a legal contract. The Standard Conditions and other requirements of the Act apply. The landlord must still provide an address, telephone number and emergency contact number, in writing. The contact information must be provided to the tenant within 20 days of the start of the tenancy. An address is necessary so a tenant has a place to send or deliver a notice to vacate or any other notice to the landlord. If a landlord doesn't want to provide their home address, they may use a business address or postal box number.

Unenforceable Terms

Sometimes landlords include terms in the rental agreement that are contrary to the Standard Conditions and the Act. These types of terms cannot be enforced. Some examples are...

  • A term that requires the tenant to have the carpets professionally cleaned before they move out. Tenants are only required to leave the place reasonably clean. This may not require a professional carpet cleaning.
  • A term that says the landlord is not responsible for something such as compensating the tenant for loss of heat or utilities. Landlords' responsibilities are outlined in the Act and cannot be changed by putting a term like this in the agreement.

Types of Tenancies

Rental agreements may be for a periodic tenancy (week to week or month to month) or for a fixed amount of time, such as six months or a year. However, if the tenancy is for a fixed term of three months or longer the rental agreement must be in writing, otherwise it will be treated as a monthly tenancy.

Some people call a fixed term rental agreement a lease. If the tenant moves out before the lease is over, the landlord can make the tenant pay rent for the rest of the lease term. The landlord or the tenant may, however, end the lease early if both agree. An agreement to end a lease early should be in writing.

Other Considerations

Sometimes a landlord tries to get a tenant to rent premises by promising to do certain repairs or make certain improvements. To avoid problems later on, the tenant can ask the landlord to put the promises in writing. Sometimes a landlord agrees to pay the cost of materials if the tenant makes certain improvements. The tenant can also ask the landlord to put this kind of agreement in writing.

The landlord may include certain conditions in the rental agreement, such as...

  • no pets
  • no smoking
  • maximum number of tenants
  • extra fee for NSF cheques or late rent payments

A tenant who doesn't like some conditions of the rental agreement can try to get the landlord to make some changes before they sign the agreement. Once an agreement is signed it can usually only be changed if the tenant and the landlord both agree. Even a new owner cannot change or add terms without the agreement of the tenant.

There are, however, some exceptions. A landlord can give notice to increase rent for a month to month tenancy. If the rental unit is part of a housing program and the program is changed or discontinued, the landlord can make reasonable changes to the tenancy agreement to reflect these changes.

Once the agreement is signed it is binding even if the tenant does not move in. The tenant would still have to pay rent even if they changed their mind and did not move in. If a landlord doesn’t allow a tenant to move in, the tenant can apply to the ORT for an order that they be allowed to move in. If either party breaches the agreement they can be held responsible for loss or damages the other party suffers because the agreement was breached.

Insurance

It is important for both landlords and tenants to have insurance. Landlords may require the tenant to have tenant insurance as a term of the tenancy agreement. A landlord cannot require the tenant to use a specific insurer. For more information, contact an insurance broker. A brochure on tenant insurance is available from the Insurance Bureau of Canada.

Condition of the Unit

Tenants should not agree - in writing or verbally - that a place is in good condition if it is not. This can cause problems later. The landlord could use the statement to argue that the damage happened after the tenant moved in. The landlord is legally obligated to do required repairs to the rental property - even if the need for repairs is known to the tenant before they make the rental agreement.

A tenant has the right to look over the rental unit carefully. Many landlords have a checklist to mark the condition of each room when the tenant moves in and moves out. A landlord or tenant can get a sample checklist from the ORT. Either party can also make their own checklist. It is a good idea for the tenant and the landlord to both sign, date and keep a copy of the checklist. A checklist protects both landlords and tenants. It can protect a tenant from a claim that damage occurred while the tenant lived in the place or it can help a landlord prove that damage occurred during the tenancy.

Sometimes a tenant only notices damage after moving in. It is a good idea for a tenant to let the landlord know about the damage as soon as possible. The tenant should write and sign a note describing the damage and stating the date they noticed it. The tenant should keep a copy of the note and give a copy to the landlord. Although the landlord may still dispute when or how the damage occurred, it is best to document it as soon as possible.

Cost of Renting

There are rules about how and when rent must be paid as well as when rent can be increased.

Security Deposits

If you decide to rent a place the landlord can ask you for a security deposit. There are rules about the amount of a security deposit, when it must be paid and what a landlord can do with the money from the security deposit.

Rental Rules

There are rules that cover things like who is responsible for cleaning and repairs and when a landlord can enter a rented place. Landlords can also make their own rules about some things.

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