Since April 2018, a standard lease agreement template was available from the Ontario government for landlords across the province. When complete, the standard lease creates a contract between the landlord and tenant. It is also called a residential tenancy agreement.
However, this standard residential tenancy agreement in Ontario was not mandatory and could be modified and altered by landlords, and such modifications and amendments were common practice.
In December 2020, the Ontario government released an updated standard lease agreement template to account for RTA changes that were introduced in July 2020 by Bill 184.
This new standard lease will require landlords to use 15 standard clauses and limits their ability to amend, disregard and add new clauses to the contract, limiting their ability to negotiate with the tenant.
The point of the new lease agreement is to prevent residential landlords from including illegal and therefore, unenforceable clauses in the standard lease agreements. The intention was to create a standard framework that both large and small landlords could use.
The new lease template also makes things more transparent, and clearer between landlords and tenants because now, both parties will be familiar with what is in the document, where to find the total rent, what is included and excluded from the tenancy agreement.
Additionally, the new residential tenancy agreement seeks to introduce the changes made by Bill 184.
Ultimately, the new Ontario residential tenancy agreement is an attempt at levelling the playing field between landlords and tenants since there’s an otherwise unbalanced rental market due to the giant gap in negotiating powers between both parties.
There are practical changes that will take effect with the new Ontario lease agreement in 2021.
The new lease agreement includes a provision that says a tenant can request a copy of the lease agreement from the landlord. If the landlord does not supply the lease agreement to the tenant within 21 days, the tenant can withhold 1 month’s rent. If the landlord does not produce it after 1 month, the tenant does not have to pay the landlord that outstanding months’ rent. Where the landlord never gives the tenant a copy of the lease agreement, the tenant can terminate the lease agreement by serving the landlord with 60 days’ notice.
Landlords can no longer alter or change the new template. The new agreement contains 15 mandatory sections that must be included in the agreement and cannot be removed or altered in any way. The purpose of this is to prohibit landlords from making unfair changes or assigning illegal clauses that apply to the tenant.
There is a section at the end of the lease agreement that allows landlords to attach documents with additional terms. Here landlords can add additional terms to the lease agreement but only with the tenant’s consent. It is important to note that where there is any inconsistency with the standard 14 clauses in the new lease agreement, the standard clauses will take precedence over any terms added by the landlord, which, in the case of conflict or overlap, will be viewed as illegal and therefore void. This is different from the approach seen in the previous rental agreement form because now this is the only section where landlords can add additional terms.
As enacted by Bill 184, this new lease includes an increase in fines issued to landlords if they evict tenants unlawfully or give notices of termination in bad faith. Part D outlines the increased fines payable by landlords where landlords unlawfully evict tenants. If convicted, an individual landlord could face fines of up to $50,000.
Along with these significant updates to the standard lease, the following is further clarified in this new form:
The new lease agreement applies to all residential units in Ontario. This includes but is not restricted to condos, houses, basement units, and apartments. Those exempt from the Residential Tenancies Act are not required to use this new lease format. This includes care homes, mobile home parks, lease communities and most social housing.
The new Ontario lease takes effect on March 1st, 2021.
This does not mean that landlords and tenants who have already signed a lease agreement before this date are required to sign a new lease.
Until February 28th, 2021, landlords and tenants can use the old version of the standard lease agreement and it will remain valid. However, it is important to note that any clauses in the lease agreement that are not standard clauses or are clauses that may appear to be illegal in nature, will automatically become void as of March 1st. This could mean that any clauses added within the body of the lease (and not within the “additional terms” section) could automatically become void as they would not abide by the new rules.
It’s important for landlords to know that any lease agreement made prior to March 1st will be permitted to remain effective and will not automatically become void. This is good news because landlords will not be required to re-sign their already existing tenants to a new lease.
Additionally, there are no penalties given by the Residential Tenancy Act, and by extension, the LTB, for landlords who do not properly use the standard lease. However, landlords should be aware that where there is a failure to use the proper form, the tenant can possibly break a fixed-term lease early. So it’s best to start using the new standard lease template before the March 1st deadline.
If you are interested in finding a copy of the new Ontario standard lease agreement that takes effect in March 1st 2021, please visit SingleKey Lease Templates to find a downloadable copy of the lease agreement.
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