A brand new 13-page simplified lease is finally coming to Ontario. Starting on April 30th, it will be mandatory for most residential landlords and property management companies to start using the new standardized lease. The lease was released in English or French, accompanied by a guidebook in 21 different languages.
This new standardized lease has been met with much criticism, but it can serve to simplify an oftentimes complicated and messy rental process.
The new lease aims to remove overly complicated leases from the circulation, making the rental process easier for both landlords and tenants. The standardized nature of the lease will also make it so landlords never have to create their own leases using their own language or whatever they find on the internet. In the past, this led to illegal leases and oftentimes confusing language. All landlords will now be using one lease format, making it easier and saving them time.
This lease is written in simple language, and it includes basic information, such as what is the rent, when it’s due, what rent includes, and what the rules and terms are of the rental unit. It also has a section on responsibilities of both tenants and landlords and outlines additional terms that may be included in the lease.
The lease template also outlines void and unenforceable terms which conflict with Residential Tenancies Act, 2006, such as not allowing pet ownership, or guests and roommates, which cannot be included in the contract. This has led many tenants and landlords in legal battles because the contracts contained illegal clauses, concerning owning pets or paying security deposits.
Chad Robinson, Ontario real estate expert and mortgage broker, has dealt with real estate since childhood. He has owned and operated properties for a long time, and when he first heard about the standardized lease, a year ago, he wasn’t its biggest fan.
However, Robinson’s mind is mostly changed. “Overall, it is a very clear and easy to read document. It spells out everyone’s rights and obligations, who is paying for what and how. It also allows for things like key deposits, no smoking in the units, and a few other common sense items,” he said. He mentions the document’s similarity to the Ontario Real Estate Association (OREA) form, so for any landlords that have been using that “it won’t be much of a change.”
Some concerns among the landlord community mostly revolve around the guest issue. “The most glaring issue with the lease is the potential for unauthorized occupants. It states that a landlord CANNOT refuse someone from having a roommate,” Robinson said. He added that there needs to be some added clarity in exceptional situations involving the guest. At this time, there is an option of adding landlord requirements in the annexe of the contract.
As far as the documents benefits, there is a consensus that it generally benefits both landlords and tenants.
Robinson hopes the document will “take away some objections at the tenant board or common defences to get out of leases.” He is happy tenants will no longer be able to claim they didn’t understand the document, making the process more accessible. The document’s clarity “makes the landlord have conversations about all the small issues and hopefully avoid things becoming big issues.”
Robinson added that the new lease has “the potential to be positive to both parties by ensuring all terms are clear. It does not leave a lot of room for interpretation.” The tenants will also benefit from the document in his opinion. Especially those “who have been renting from subpar landlords by holding them to a reasonable standard,” he added.
The document references the Residential Tenancies Act, 2006 and the Ontario Human Rights Code. One of the critical considerations Robinson believes we should all keep in mind is that there may be “more human rights complaints because of this lease.” He urges all landlords to become familiar with the lease, the process, and the laws behind it.
“It also means you need to really screen your applicants even more than before and have in-depth conversations with your property manager and legal team,” Robinson said. Being prepared for any new situation by learning as much as possible about the new lease and the laws that come with it.
Overall, the new standardized lease will move the landlord-tenant relationships in a positive direction. By moving closer to mutual understandings, both parties will be on the same page without ambiguities.
The new lease template won’t apply in all cases and doesn’t have to be used when it comes to renting a unit in a care home, mobile home community, or specific social and supportive housing.
The lease will take effect on April 30th, which means that any lease signed before then will still be valid to the end of its term.
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