Landlord 101 - Part 1: What is in a standard lease agreement in Ontario?
Whether you're renting out a property to tenants for the first time, or want to double-check that you are doing everything properly, below is a quick walk-through of the standard lease agreement and what is covered under each section.
Section 1: The names of the tenants and landlords signing the lease.
Section 2: A description of the rental unit, its address, any parking spaces and their location are filled in here. There are checkboxes you can use to indicate whether or not the property is a condo. If it is, this is the section where the tenant agrees to follow the condo rules, which the landlord needs to provide. You can staple a printout or photocopy of the condo rules to the lease agreement so the tenant has them for reference.
Section 3: The landlord provides an address where formal notices must be sent. This section also allows landlords and tenants to provide their emails and agree to receive and send formal notices via email. Learn more about when you can and cannot communicate with a tenant via email here. Additional contact info can also be written in this section to be used for emergencies and day-to-day issues.
Section 4: Outlines the date the tenant can move in and the length of their tenancy. Worth noting: when the end of the agreement is reached the tenant doesn’t have to move out, renew or sign a new lease. Usually the arrangement shifts to month-to-month, with the tenant giving two months notice to the landlord when they plan to leave.
Section 5: This section provides a breakdown of the total cost of rent, which is what future rent increases are based on. The base price of the rent is stated, the price of any parking units, and the cost of any other additional services and utilities. Also listed is when the rent is due, method of payment and who it is paid to.
Section 6: This section covers who is responsible for paying the rental unit’s utilities (heat, electricity, water) and outlines what services are included and not included in the total rent.
Section 7: This section gives the landlord the opportunity to offer a discount on rent.
Section 8: Whether or not a rental deposit (AKA last month’s rent) is needed, and the amount are covered in this section. Worth noting: rental deposits are to be applied to the last month of the tenancy and can’t exceed the cost of one month’s rent or the cost of a rental period, for example, if rent is paid on a weekly basis. Rental deposits are not to be used as damage deposits.
Section 9: Confirms whether or not a deposit for the key is required and the deposit amount. This is in case the key, card or remote entry device isn’t returned or is damaged at the end of the tenancy. The deposit cannot exceed how much it would cost to replace the key.
Section 10: This section addresses if smoking is allowed in the rental unit. Provincial law states smoking isn’t allowed in indoor common areas outside rental units, for example, the lobby. There is no law preventing smoking in private units, but landlords and condo/co-op members can legally make their buildings non-smoking.
Section 11: Whether or not a tenant needs to get tenant’s insurance (AKA renter’s insurance) is outlined under section 11. If the landlord asks to see proof of it, the tenant must provide it. Rhenti recommends asking tenants to get tenant’s insurance as a best practice. Fire, theft and vandalism, for example, are covered under it. We wrote about tenant’s insurance on our blog for renters. Learn more here.
Section 12: This section says decorative items like blinds and pictures are allowed to be installed, but changes to the rental unit require the landlord’s permission. This section of the contract can’t be altered, but additional and more specific terms can be added under section 15.
Section 13: This is another section that cannot be altered. It says that the landlord must keep the property in good repair — complying with all health, safety and maintenance standards. It also states that the tenant must pay for any damage they or their guests do to the property. It doesn’t matter if it happens willfully, or as a result of neglect. Under section 13 the tenant is responsible for keeping the unit clean, with the exception of any cleaning the landlord agreed to do. Additional terms can be added under section 15.
Section 14: This section can’t be altered. It states that the tenant needs the landlord’s permission to sublet the unit, and the landlord can’t arbitrarily say no to potential subletters. Additional details can be specified under section 15.
Section 15: Under section 15, it states that additional terms can be attached to the lease agreement. Rules surrounding the nature of the added terms and how they are presented are also provided.
Additional terms must be written in a way that is clear and easy to understand in a minimum of size 10 font (if typed).
Examples of terms that are permitted involve items that are very specific to the property, for example, common spaces and amenities.
Additional terms that try to eliminate the responsibilities of the tenant or landlord are considered void. E.g.: rules that say you cannot have guests, roommates, added occupants or pets (the exception being condos, which are allowed to have rules surrounding pets).
Section 16: This states any changes need to be updated and agreed upon in writing.
Section 17: All landlords and tenants listed in section one need to sign the lease and be given a copy of the tenancy agreement.
Looking for a renter? Rhenti makes finding and securing a renter easy. We even have the Ontario Standard Lease incorporated into our leasing platform. Learn more about Rhenti here.
The blog posts on this website are for the purpose of general introductory information. They can’t serve as an opinion or professional advice. Speak to a professional before making decisions related to your circumstances.