Top 5 Essential Lease Facts for Tenants in Prince Edward Island

Signing a lease is a big step for any tenant in Prince Edward Island. Understanding your lease or rental agreement ensures a smoother renting experience and helps protect your rights throughout your tenancy. This guide covers the top five things every tenant should know about leases and agreements under Prince Edward Island law.

What Is a Lease or Rental Agreement?

A lease (also called a rental agreement) is a contract between you and your landlord setting out the rules for renting your home, like how long you’ll stay, your rent amount, deposits, and more. In Prince Edward Island, both written and verbal rental agreements are legally binding, but a written agreement is highly recommended.

1. Lease Terms and Types: Fixed vs. Month-to-Month

Leases in Prince Edward Island generally fall into two categories:

• Fixed-term lease: Lasts for a set period (for example, one year). After the fixed term ends, it often continues month-to-month unless you or your landlord take steps to end it.
• Month-to-month lease: Continues automatically each month until either you or your landlord gives proper notice to end it.

If you have a fixed-term lease, check the agreement for what happens at the end. Many tenants are surprised to learn it does not always end automatically — it might automatically become month-to-month if you stay and do not sign a new lease. For more on your rights and obligations as a tenant after your agreement is signed, see What Tenants Need to Know After Signing the Rental Agreement.

2. Security Deposits: Amounts, Receipts, and Returns

In PEI, landlords can ask for a security deposit, but it cannot exceed one month's rent. Landlords must provide a written receipt for any deposit collected. Your security deposit must be returned with interest unless it is lawfully withheld for unpaid rent or damages at the end of your tenancy.

For full details, including how to get your deposit back and common issues, see Understanding Rental Deposits: What Tenants Need to Know.

3. Rent Payments and Increases: What’s Allowed?

Your lease should clearly show the monthly rent, when it is due, and how it should be paid (online, cheque, etc.). By law, the landlord can raise your rent only once every 12 months, and must give at least three months’ written notice (using the official Form 10: Notice of Increase (Rent)). Each year, there is a provincial rent increase limit.

If you receive a notice about a rent increase, always check it for correct dates and information. If you think the increase isn’t legal or is too high, you can challenge it through the Residential Tenancy Office.

Relevant Forms for Tenants

• Form 1: Rental Agreement – Used to establish the terms between you and your landlord. Fill this out and keep a signed copy for your records. Official download: Rental Agreement Form (Form 1)
• Form 4: Notice by Tenant to Terminate Tenancy – Use if you wish to end your lease. Submit the form by the correct notice deadline. Official: Notice by Tenant to Terminate (Form 4)
• Form 10: Notice of Increase (Rent) – Landlords must use this to notify tenants of a legal rent increase. Official: Notice of Increase (Form 10)

For all official PEI forms, visit the PEI Residential Tenancy Office.

4. Ending Your Lease: Notice Rules and Early Termination

You may want to move out before your lease term ends or at the end of your rental agreement. In PEI, you must use the proper form and give written notice. The amount of notice varies depending on your lease type and situation (for example, one month's notice for month-to-month agreements, or following the fixed end date for fixed-term leases). Tenants needing to leave early due to health, abuse, or being accepted into a care facility may have additional rights under the law.

5. Your Rights and Responsibilities Under PEI Law

Both landlords and tenants have specific obligations under PEI’s Rental of Residential Property Act¹. As a tenant, you must pay rent on time, maintain reasonable cleanliness, and avoid damaging the property. Landlords must keep the unit safe and in good repair, and cannot enter your home without proper notice (except in emergencies).

To review the full details, visit Tenant Rights and Landlord Rights in Prince Edward Island.

Where to Find Rental Listings and More Information

Looking for your next home in PEI or aiming to compare rental options? Find rental homes across Canada on Houseme for the latest listings and helpful search tools.

FAQ: Tenants and Leases in PEI

1. Can a landlord ask for more than one month's rent as a deposit in PEI?
   No. Under PEI law, the maximum deposit is one month's rent, and landlords must provide a written receipt.
2. How much notice do I have to give to move out?
   For month-to-month agreements, tenants must give one month's written notice. For fixed-term leases, you must give notice before the end date as set out in your agreement.
3. Is a verbal lease valid in Prince Edward Island?
   Yes, verbal agreements are legal, but it’s strongly recommended to have written agreements to avoid confusion.
4. What if I need to break my lease early due to health or safety issues?
   Certain legal protections may allow early termination. Speak with the Residential Tenancy Office or seek legal advice if you need to break your lease for these reasons.
5. Where can I learn more about tenant and landlord rights in PEI?
   Visit Tenant Rights and Landlord Rights in Prince Edward Island for comprehensive information.

How-To: Taking Common Lease-Related Actions

1. How do I properly give notice to end my lease?
   Obtain and fill out Form 4: Notice by Tenant to Terminate Tenancy, provide the correct notice period, give it to your landlord, and keep a copy for your records.
2. How do I respond if my landlord raises my rent?
   Review the notice to ensure it uses Form 10 and provides three months’ notice. If you believe the increase is illegal, contact the Residential Tenancy Office promptly.
3. How can I make sure my security deposit is returned?
   Request an inspection with your landlord when you move out, clean the rental thoroughly, and leave a forwarding address for your deposit refund.

Key Takeaways for Tenants

• Always have a written lease and know its terms.
• Understand your notice requirements for moving out.
• Familiarize yourself with security deposit rules and rent increase laws.

Knowing your rights and obligations leads to fewer misunderstandings and greater peace of mind during your tenancy.

Need Help? Resources for Tenants

• PEI Residential Tenancy Office: The governing body for tenancy issues, forms, and disputes in PEI.
• Rental of Residential Property Act: Read the law that covers landlord and tenant rights in PEI.
• Canadian Mental Health Association, PEI Division: Support if you’re experiencing a housing crisis or mental health concern.
• Tenant Rights and Landlord Rights in Prince Edward Island: Your complete guide to renting in PEI.

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1. Rental of Residential Property Act (PEI)
2. Government of PEI: Residential Property Rentals
3. Official Rental Forms – Government of PEI

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