Assignment of a Rental Unit

Transcript

 Introduction

Welcome to Landlord’s Self-Help Centre’s module about the assignment of a rental unit. The information offered in this presentation is intended as general information, it is not legal advice. If you need more information, please contact a legal service provider.

Residential Tenancies Act

In Ontario, the Residential Tenancies Act is the provincial law that governs most residential rental agreements. It defines the rights and responsibilities of both landlords and tenants and outlines appropriate reasons for giving a notice of termination. Section 95 of the Act sets out the rules relating to the assignment of a rental unit.

Subletting and Assignment

The terms subletting and assignment are often confusing terms for both landlords and tenants. It is important for landlords to understand the difference between the two terms.

An assignment happens when a tenant permanently leaves the rental unit, and transfers the responsibility for that unit to another person with the landlord’s consent.

Subletting happens when a tenant temporarily leaves the rental unit, and with the consent of the landlord, allows another person to stay in the unit while they are away. This new person would leave when the tenant returns.

Can any tenant assign their rental unit?

Any tenant can request to assign their rental unit. This provision applies to all types of tenancies, except for superintendent units.

Common Misconceptions

There are many situations that create common misconceptions. It is not considered an assignment when the tenant allows someone to move in with them as a roommate while the tenant is still living in the unit. In cases where there are multiple tenants on one lease and one of the tenants wants to leave, the outgoing tenant cannot partially assign their portion of the lease.

The last month’s rent deposit stays with the tenancy. If there is a change in tenant due to an assignment of the rental unit, the incoming tenant pays an amount equal to the last month’s rent to the outgoing tenant.

What is an Assignment?

Section 95 of the Residential Tenancies Act deals with the assignment of a rental unit. The assignment of a rental unit happens when a tenant completely vacates their rental unit and transfers all their rights and responsibilities of that unit to a new tenant with the landlord’s consent.

What happens to the tenancy agreement?

If the landlord consents to the assignment of a rental unit, the tenancy agreement is transferred to the new tenant. All the terms and conditions of the original agreement stays the same, a new tenancy agreement is not created.

The new tenant, or assignee assumes the responsibility of the tenancy agreement and they are not responsible for any breaches caused by the outgoing tenant prior to the date of the assignment.

Assignment- General Consent

There are two types of consent a landlord can give when a tenant asks for permission to assign the rental unit. The first type is general consent to assign the rental unit to another person. When a tenant asks for general consent, the landlord has 7 days to respond and either consent to the assignment or refuse consent.

 The Landlord Refuses Consent to Assign

If the landlord refuses to give general consent to the assignment request or they do not respond within the 7 day period, the tenant can end their tenancy after providing 30 days’ notice to terminate. This notice to terminate must be given to the landlord no later than 30 days after the assignment request was made.

Assignment- Specific Consent

The other type of consent a landlord can give is specific consent. The tenant is able to look for individuals, or potential assignee to assign the rental unit to, but the landlord still has the right to screen this potential assignee to determine if they are an appropriate tenant. In this case, the landlord would also have to reply to the request within seven days.

 Request to Assign to a Potential Assignee

When a tenant requests to assign the rental unit to a potential assignee, the landlord can:

• Consent to assign the unit to the potential assignee,
• Refuse consent to assign the unit to the potential assignee, or
• Refuse consent for the assignment of the rental unit altogether.

 Refusing a Potential Assignee

If a landlord has given general consent to an assignment of the rental unit, they are still able to refuse specific consent to a specific assignee. However, they should not arbitrarily or unreasonably refuse consent to a potential assignee.

 Notice to Terminate the Tenancy

If the landlord doesn’t respond to the assignment request within 7 days, the tenant can give the landlord a 30 day notice to end their tenancy.

 Can I charge my tenant a fee for the assignment?

Landlords can only charge the tenant the actual cost of out of pocket expenses which are incurred as a result of approving an assignment.

 Why is it important to understand the RTA rules?

Sometimes tenants use the assignment provision as a way to break their lease early, so it’s important to understand the rules under the Residential Tenancies Act. Landlords should make sure to respond to any requests for an assignment within the statutory seven day time frame, state in your tenancy agreement that requests for assignments must be done in writing, and keep copies of any requests made along with responses.

 Tenant’s Application to the LTB

If the tenant feels that the landlord arbitrarily or unreasonably withheld consent for an assignment, the tenant can file an application to the Landlord and Tenant Board.

 Determination by the Board

A hearing will be held by the Board to determine if the landlord was unreasonable. The Board has the power to order one or more of the following:

• Authorization of the assignment,
• Authorization of a different assignment proposed by the tenant,
• Termination of the tenancy, and
• An abatement of the tenant’s or former tenant’s rent.

Unauthorized Occupancy: What happens if the tenant assigns the rental unit without consent?

In situations where the tenant assigns the rental unit without the landlord’s consent, the landlord can file an application with the Landlord and Tenant Board based on unauthorized occupancy, or the landlord can negotiate a new rental agreement with the assignee.

 A2 Application about an Assignment

The A2 application deals with unauthorized occupants, and it must be filed with the Board no later than 60 days after the landlord discovers the unauthorized occupant.

 Negotiate a New Rental Agreement

If the landlord instead decides to negotiate a new rental agreement with the unauthorized occupant, this agreement must be entered into no later than 60 days after the landlord discovers the occupant in the unit.

 What happens after the 60 days?

After 60 days pass, if the landlord hasn’t filed the A2 or entered into a new tenancy agreement with the occupant, that occupant becomes a tenant under the same terms and conditions of the old rental agreement.

 Conclusion

Thank you for watching this module about assignment of a rental unit. The information offered in this presentation is intended as general information, it is not legal advice. If you have a specific issue or situation, please contact a legal service provider.