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A few weeks ago, my tenant had a cooking fire and as a result the house was destroyed. The tenant had no content insurance, my insurance will cover the loss of the house and the income. The tenant wants to know if they are entitled to getting their last month’s rent deposit back. Am I required to return the deposit? Does this fire terminate the lease? Is there any paperwork necessary to terminate the lease? Do I have any responsibilities to the tenant?

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A few weeks ago, my tenant had a cooking fire and as a result the house was destroyed. The tenant had no content insurance, my insurance will cover the loss of the house and the income. The tenant wants to know if they are entitled to getting their last month’s rent deposit back. Am I required to return the deposit? Does this fire terminate the lease? Is there any paperwork necessary to terminate the lease? Do I have any responsibilities to the tenant?

The Frustrated Contracts Act appears to apply to your situation. Basically, this means that the tenancy obligations ended on the day of the event. So this would mean that the tenant has no further rent owing to the landlord, and the landlord has no further obligation to provide accommodation. You will have to return any rent on a daily basis, including last month’s rent in part or in whole, to the tenant, since there is no longer a unit to pay rent for.

There is no official paperwork for this, but the usual practice is to write the tenant a letter or statement that due to the event, the Frustrated Contracts Act applies according to Section 19 of the Residential Tenancies Act, which you can read at this link: https://www.ontario.ca/laws/statute/06r17#BK22

You can include the letter along with the payment, and ask the tenant to sign for receipt of both the payment and the letter.

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