On February 7, 2018, Ontario’s Ministry of Housing released the new Residential Tenancy Agreement (Standard Form of Lease). This new lease is written in plain language to make it easier for landlords and tenants to understand the rights and responsibilities they have under the Residential Tenancies Act, 2006. It is also an attempt to reduce illegal and unenforceable terms in tenancy agreements, and lessen the number of disputes seeking resolution at the Landlord and Tenant Board.

Ontario landlords entering into a written residential tenancy agreement on or after April 30, 2018 are required to use this new Standard Form of Lease as it will be mandatory for all written tenancy agreements in Ontario.

The law in Ontario does not require a written tenancy agreement. However, landlords are strongly encouraged to document the terms of the tenancy by way of a written agreement, signed by the landlord and the tenant, before the tenancy begins. A written tenancy agreement is important as it defines the responsibilities of parties and allows the landlord to reserve certain rights.

The standard lease developed by the Ministry of Housing will apply to most residential tenancies in Ontario, including:

• single and semi-detached houses
• apartment buildings
• condominiums
• secondary units (for example, basement apartments)[1]

Please visit their website at http://www.mah.gov.on.ca/Page18704.aspx for more information and to get a copy of the lease.

In addition to the release of the Standard Form of Lease, the Ministry of Housing will be releasing a multi-language guide. These guides are expected to provide more information about the Standard Form of Lease and include examples of illegal and legal clauses which may be used in the additional terms section.

Important things to consider:

• If landlords do not use the Standard Form of Lease when entering into a written tenancy agreement on or after April 30, 2018, they will have 21 days to provide one to the tenant after the tenant makes a written request.
• If the landlord does not provide the tenant with a Standard Form of Lease within 21 days after the written request was made, the tenant is allowed to
  • withhold one month’s rent, or
  • give the landlord a 60 days’ notice to end their tenancy early.
• After the tenant withholds rent, the landlord has 30 days to provide the tenant with the Standard Form of Lease. If the landlord does not do this, the tenant does not have to repay that month’s rent.  Note: the tenant is only allowed to withhold one month’s rent, and is expected to continue paying their rent for the rest of their tenancy.
• If the landlord provides the tenant with a Standard Lease Form within 21 days of the written request, but the tenant does not agree with the terms, the tenant can give the landlord 60 days’ notice to end their tenancy early. However, this notice cannot be given later than 30 days after the landlord provided a copy of the standard lease. The end date, or termination date, on the notice must be the end of a rental period.
• If a monthly or fixed-term tenancy agreement was signed before April 30, 2018, and it renews to a month-to-month tenancy after April 30, 2018, the tenant cannot ask for a Standard Form of Lease unless both parties agree and new terms are negotiated on or after April 30, 2018.

For example  (Assumption that rent is due on the 1^st of the month)

• May 15, 2018 – Landlord and tenant enter into an informal 1 page written lease
• June 1, 2018 – Tenant makes a written request for a Standard Form of Lease. Landlord has until June 22 to provide the tenant with one.
• June 22, 2018 (Landlord provided Standard Form of Lease) – If the landlord provided the Standard Form of Lease but the tenant doesn’t agree with the terms, the tenant can give 60 days’ notice to end the tenancy for August 31, 2018, or September 30, 2018. The tenant has until July 22 (30 days after the landlord provided a copy of the written lease) to provide this notice.
• June 22, 2018 (Landlord did not provide Standard Form of Lease) – The Tenant is able to withhold rent for July.

OR

• The tenant can provide the landlord with a 60 days’ notice to end their tenancy for August 31, 2018.
• July 31, 2018 – The 30 day deadline for the landlord to provide the tenant with a copy of a Standard Form of Lease once they withheld the rent. If the landlord still hasn’t provided it, the tenant doesn’t have to pay the rent for this month.

If the Standard Form of Lease does not include clauses the landlord and tenant wish to have in their agreement, these additional terms can be added, but they must not conflict with the Residential Tenancies Act and should be written in plain language.

Cautionary notes for landlords:

The following are sections from the new Residential Tenancy Agreement (Standard Form of Lease).

Section 3. Contact Information – The Landlord and Tenant Board’s (LTB) Rules of practice do not currently allow for the service of legal notices by email. Landlords should refer to the Certificate of Service[2] or LTB Rules of practice[3] before serving a notice to their tenant by email.

Section 7. Rent Discounts – Make sure to only include discounts which are allowed under the Residential Tenancies Act, otherwise it may negatively affect the lawful rent amount your tenant is required to pay.

Section 8. Rent Deposit – If a landlord requires the tenant to pay a Last Month’s Rent (LMR) deposit, and completes this section of the lease, the landlord should also document whether or not the tenant actually paid the deposit. This can be done by issuing a receipt to reflect collection of the LMR deposit.

Section 8. Key Deposit – If a landlord requires the tenant to pay a refundable key deposit, and completes this section of the lease, the landlord should also document whether or not the tenant actually paid the deposit. This can be done by issuing a receipt to reflect collection of the refundable key deposit.

Section 10. Smoking – This is an especially important section for landlords. With forthcoming cannabis legislation, landlords are encouraged to do what they legally can to protect themselves and their rental units from the smoking and vaping of tobacco and recreational cannabis.

• If landlords wish to have no-smoking rental units, this should be clearly documented in the Standard Form of Lease.

Section 15. Additional Terms – If the Standard Form of Lease does not contain all the clauses the landlord and tenant wish to have in the written tenancy agreement, additional terms may be included in this section. However, terms that are illegal or inconsistent with the law will not be enforced at the Landlord and Tenant Board and the parties will not be able to rely on them.

Appendix: General Information

 Change of Landlord – “A new landlord must follow all the terms of this agreement unless the tenant and new landlord agree to other terms”. This does not mean that if a rental unit is purchased, the new landlord/owner can increase the rent above the guideline amount and without proper notice.

If certain sections of the Standard Form of Lease are unclear, landlords are encouraged to seek legal advice before a lease agreement is signed and a tenancy is entered into. Visit www.landlordselfhelp.com/media/Standard-Lease-Sample.pdf for more information.

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[1] Ontario Ministry of Housing http://www.mah.gov.on.ca/Page18704.aspx

[2] Certificate of Service http://www.sjto.gov.on.ca/documents/ltb/Other%20Forms/Certificate%20Of%20Service.pdf

[3] Landlord and Tenant Board’s Rules of practice http://www.sjto.gov.on.ca/documents/ltb/Rules/LTB%20Rules%20of%20Practice.html#r5