Landlord's rights and responsibilities - after you have found new tenants

You have finalized a deal with a new tenant and now must taken the necessary steps to protect the investment you have made:

  • Carefully look over the Provincial and Territorial Fact Sheet for the province or territory that you are in. You will also need to familiarize yourself with the basic guidelines for your area, including the types of deposits that are allowed, renewal timeframes and notice periods.
  • Get the tenant to sign a written lease that clearly lays out all of the terms of the agreement between the two parties. In some provinces, a written lease is required for the agreement to be legally binding. It will be necessary for you to look into the laws of your area to see if you need a written lease, but it is a good idea regardless. You may be able to find standardized lease forms at your local rental authority, though they are also usually sold at local business supply stores.
  • Collect the deposit that the tenant has agreed to pay, if applicable.
  • Conduct an initial inspection when the tenant first moves in. Make sure to document the overall condition of the rental unit with the tenant, taking pictures and maybe even videotaping the entire property. After the inspection is done, make sure that you and the new tenant sign the Inspection Worksheet. There are some provinces that have a worksheet that you must legally use.

Collecting a Deposit

The rules pertaining to collecting deposits are different, depending on the province. In Quebec, for example, landlords are not legally able to collect a deposit from tenants. In Ontario, though, landlords can collect a deposit, but it is not considered a “security deposit”, so the landlord cannot use the amount given by the tenant to cover the cost of repairs to the property. In certain other provinces, the Rentalsman office, as opposed to the landlord, holds onto the deposit for the landlord and tenant.

At the end of a tenancy, the deposit that was initially collected is given back to the tenant, usually be covering the cost of their last month’s rent. There is also usually a difference between the amount of the initial deposit that was given at the beginning of the tenancy and when the tenant leaves. If the tenant has failed to give you any extra money to put towards the deposit for rent increases, you are entitled to use the interest on the deposit, if applicable, to cover this difference.

Landlords in all different areas across Canada cannot keep the deposit of a tenant who is leaving or charge them for additional repairs to the property. There must be a negotiation of payment with the tenant and if they disagree, the landlord has to file a formal application the local rental authority to keep the deposit or charge the tenant for damages that add up to more than the amount of the deposit plus interest.

FACT: How much is returned?

The total amount that is given back to the tenants when they move out depends on the official guidelines that are set for the respective province or territory. Some of the factors that determine this amount include:

  • Whether the total amount of rent has been paid
  • The amount of deposit paid by the tenant, if applicable.
  • The amount of interest on the deposit, based on the rate set by the province or territory.
  • The overall condition of the rental property, not including everyday wear and tear

Rent Increases

Rent increases are just a fact of life, but by how much can you legally increase the rent of your tenants? Each province and territory has their own guidelines and rules about this. Check the Provincial and Territorial Fact Sheets for more information.

Notice of a Rent Increase

In a vast majority of jurisdictions throughout Canada, you have to give at least 90 days written notice of a rent increase. The amount of time that you have to notify the tenant depends on the type of tenancy, whether it is weekly, month-to-month, or annually. There are some parts of Canada where a rent increase may occur only on the anniversary of the tenancy and the landlord is required to give four months prior notification.

A rent increase is not valid unless there has been proper advance notification given to the tenant that states when it will go into effect. If you fail to give proper advance notice, the tenant has every right to deny paying the rent increase until the appropriate notification has been given.

Rent increases are most common when it comes time to renew the lease, and there is a total of just one increase per year that is permitted. There are certain provinces that have specific guidelines for rent increases that are based on cost estimates for things like taxes, heat, electricity and improvements made to the property.

TIP: Rent Control

In Ontario, rent control is in effect for all existing tenancies. When a tenant moves out, though, the rent control no longer applies to that unit, so the landlords can legally raise the rent to a rate of their choice. For all existing tenancies, Ontario landlords can propose a rent increase about what the guidelines have set for the province. Landlords that wish to make this proposal must file a formal application to the province’s rental authority for approval before it can go into effect.

Ending the Rental Agreement

When it is time for a tenant to move out, the Landlord will want to ensure that the tenant leaves on good terms, so they can protect their investment. The following are some tips that can help you to ensure that the rental agreement ends on good terms with your tenant(s):

  • Ask your tenants whose lease will expire in the near future if they want to renew it when the time comes.
  • Negotiate terms with the tenant that will work for both parties if they need to break the rental agreement or sublet.
  • When you have to enter a tenant’s rental unit to show it to prospective tenants, give the current tenant proper advance notification.
  • Thoroughly inspect the property for any damages. If the rental unit the tenant is moving out of is:
    • Satisfactory: give back the deposit with interest.
    • Damaged or dirty: make sure all necessary repairs and cleaning is done. Contact the tenant for payment or withhold the deposit for damages if necessary and if local laws permit this.