KPA Lawyers - July 2, 2021
Renting out property in Ontario is challenging, whether you are just starting or a seasoned landlord. From new laws to offering an Ontario lease, there are several legal and financial aspects of being a landlord that you must monitor and manage. Rental property management is a business, which means you must remain professional, stay financially solvent, and screen tenants thoroughly before move-in day.
Before offering a lease agreement, legal considerations should be at the forefront of your actions. In this blog post, KPA Lawyers addresses the five things landlords should keep in mind when renting out property in Ontario:
1. Rent Increases Are Prohibited in 2021 Under the RTA
- The Ontario government passed laws that freeze rent in 2021. This rule means that rents will not increase until 2022 for rented units under Ontario’s Residential Tenancies Act (RTA).
- The freeze covers most tenants renting:
- Affordable housing units
- Basement apartments
- Community housing
- Long-term living facilities
- Mobile home parks
Although the freeze ends at the end of December 2021, you must provide ninety (90) days’ notice before a rent increase occurs in 2022. If you have questions about how rent-freezes work, always speak with a real estate lawyer in your area for legal advice and guidance. We can help you stay aware of new developments and changes while executing a strategy that makes sense for your situation.
Exceptions to the Rent Freeze Before October 1, 2020, the LTB approved the above guideline increases, which may be applied to rents in 2021. It may still approve new above guideline rent increases for 2021 if they are related to repairs and other services, but not for increases in taxes and fees. In addition, rent increases can still be negotiated between tenants and landlords in exchange for extra services or facilities as long as both parties are willing to work with each other.
2. Elevate Your Tenant Screening Process
Your property management experience and your net return are highly dependent on the quality of tenants you have on your property. It is for this reason that performing a thorough tenant screening is essential. However, legal mistakes during the screening process can result in unintended consequences.
Here are a few helpful tips for attaining the most favourable result:
Tip 1. Insist on an in-person interview before offering a lease agreement
Tip 2. Ask essential questions as you show the unit to prospective tenants
Tip 3. Gather all relevant details on your rental application
Tip 4. Obtain a prospective tenant’s written consent for due diligence checks
Tip 5. Perform due diligence by authenticating references and feedback
Tip 6. Ensure that your screening process does not violate local rules
Experience and legal knowledge count when you are a landlord. If a rental applicant is not a good fit, trust your instincts and do not let them rent out your space. You can also consult with a residential real estate lawyer to help you navigate the legalities of tenant screening and audit whether your process complies with local rules and regulations.
3. Handle Evictions Under Current Guidelines
Tenants do not need to vacate the property when landlords issue an eviction notice. Instead, you must apply for an eviction order from the Landlord and Tenant Board (LTB). Your tenant has the right to go to a hearing and explain why the eviction should not happen.
Further, under COVID-19 guidelines, landlords should work with tenants in good faith to keep tenants in their homes, including rent deferrals or payment plans.
Tenants that Refuse to Remedy the Situation The landlord may submit an application to the LTB to end the tenancy if the tenant does not leave the premises or resolve tenancy issues. You must apply within thirty (30) days of the termination date as specified in the notice. Non-payment issues are not subject to deadlines.
Cannot Personally Enforce Eviction Orders
A landlord cannot personally enforce an eviction order, remove a tenant from a rental unit, or change the locks if they fail to vacate the unit by the specified termination date. The Court Enforcement Office can only enforce a court-ordered eviction. Landlords must file a copy of the order with the Sheriff’s Office to implement the Board’s order.
4. Know the Implications of Offering a Lease Agreement
The process of renting out your property and managing tenants requires both time and money. It also involves offering a lease agreement, which carries liabilities, responsibilities, and obligations that you must meet. Therefore, you should consider what your future goals are, as well as market conditions and projected home prices, before becoming a landlord.
Answer a few questions honest before offering a lease agreement to a new tenant to determine if you ready to meet the challenges of being a landlord:
- Do I have the time to manage a rental property?
- How comfortable am I dealing with problematic tenants?
- Should I hire a repair professional, or can I do the repairs myself?
- Am I an organized person?
- Is it clear what my tax obligations are?
- What are the laws governing landlord-tenant relationships in Ontario?
You do not have to be a perfect landlord to manage a building and tenancy relationship successfully. However, you have to be prepared for the legal issues arising from renting out a property. Therefore, carefully draft and negotiate lease agreements with residential real estate lawyers for the best possible result.
5. Hire a Paralegal for Legal Advice
You may not have a lawyer on staff, even on retainer, if you own or manage only a few rental properties. However, as with any other business, the objective of a landlord is to maximize profits while mitigating liability. Therefore, several instances in which hiring a paralegal will help you achieve this goal.
Here are the top five situations that may prompt you to seek legal representation or ongoing counsel:
Reason 1. Staying informed about Ontario’s residential tenancy laws
Reason 2. Eviction of a tenant
Reason 3. Being sued or investigated for discrimination
Reason 4. Susceptible to injury, illness, or significant property damage
Reason 5. Facing a Canada Revenue Agency (CRA) audit
A real estate lawyer helps you avoid a potentially embarrassing situation if you’ve made a grave error as a landlord. We can also offer legal advice and guidance to help you avoid making future mistakes. Doing so could save you thousands of dollars over the long run.
Where Ontario Landlords Can Find Legal Help
Landlords must consider several rules and laws that apply to a tenancy. You should seek legal help from a residential real estate lawyer at KPA Lawyers to ensure that you are protecting your rights as well as meet the obligations of renting out property in Ontario. This strategy ensures that you garner a great reputation as a landlord while complying with all territorial, provincial, and national laws.
Start with an Initial Consultation
If you are an Ontario landlord that wants to learn more about the legal requirements associated with commercial or residential property, contact KPA Lawyers for an Initial Consultation. You can request yours by completing our online booking form.