Using a Real Estate Agent for a Residential Lease in Ontario

Why aren’t these clauses allowed?

Deep dive time! Here are the clauses, and the explanation as to why they contradict the Residential Tenancy Act here in Ontario.

Asking for a $300 key deposit

The Clause: “The Tenant agrees to provide to the Landlord on or before the commencement of this agreement a refundable key deposit of Three Hundred Dollars ($300) by way of a personal cheque. The Landlord agrees to refund this amount to the Tenant in cash or by way of a bank draft upon the return of all keys/fobs/remotes in good working condition on the last day of the Lease Term.”

So a key deposit is allowed (it’s referenced in section 9 of the Residential Tenancy Agreement) but it’s the amount that was the issue here. It was a standard key/deadbolt, so the deposit should only be the cost of the replacement of the key. The cost of replacing keys can vary significantly, starting from as low as $5.00 for a standard key cutting to as high as $300.00 for a complete lock replacement, condominium fob, or key card. This expense can be particularly significant if required as per the condo bylaw. After the keys have been returned in proper working condition, the landlord is obligated to refund the deposit to the tenant(s).

Asking for a refundable damage deposit of $300

Under Ontario’s rental laws, it is prohibited for landlords to collect damage deposits when signing a lease agreement. In case of any damages caused to the unit or building during the tenancy, the landlord must seek compensation by approaching the Landlord and Tenant Board.

Requiring that the tenants be responsible for the first $100 of any repair

The Clause: “Tenant agrees to return the premises in good condition on termination of the lease, except for normal wear and tear. Any repairs in the unit less than $100.00 will be the responsibility of the Tenant. The Tenant agrees to pay for all damages caused by their negligence or their guests, save and except for normal wear and tear. The Landlord shall be responsible for repair costs over $100.00 provided that notice is given by the Tenant to the Landlord of any major repairs necessary. The Landlord or his/her agent retains the right to inspect and to do repairs inside the premises.”

If any damages occur due to the tenant’s negligence, they are entirely responsible for covering the expenses associated with the repairs. However, the tenant is not liable for any regular maintenance or other common issues that may arise in any property, such as malfunctioning appliances or plumbing problems. As per the rental laws, the landlord is responsible for ensuring that the rental unit and property are maintained in good condition and comply with all the necessary health, safety, and maintenance standards.

A cleaning fee of $200 if the premises isn’t cleaned to the landlord’s liking at the end of tenancy

Now the landlord is well within his right to request payment for cleaning/damage repair if at the end of tenancy the unit isn’t delivered back in the same condition (minus normal wear and tear) that the tenants received it in. However the landlord has to go through the LTB in order to file a claim for reimbursement for cleaning and repairs.

Requiring post-dated cheques for payment

This is addressed quite clearly in section 5 of the Ontario Residential Tenancy Agreement: “The Tenant cannot be required to pay rent by post-dated cheques or automatic payments, but can choose to do so.” The tenant can by by Electronic Transfer (e-transfer) or by direct deposit, to make things easier, but can not be made to use post-dated cheques.

Allowing the landlord to enter the unit “during reasonable hours” as long as some notice is given

The Clause:  “In addition to the rights provided by the laws applicable to the Province of Ontario, the Landlord or his Agent shall have the right to enter the property at all reasonable times for the purpose of inspecting, and to make repairs and alterations as may be deemed necessary by the Landlord for the preservation of the property and to remove any alterations, additions, fixtures, and any other objects which may be affixed or erected in violation of the terms of this Agreement. The Landlord shall give notice of intent to enter the property except in case of emergency“

A buffer of at least 24 hours notice must be given for any notice of entry, and the entry can only be within reasonable hours of the day. The exception to the rule is if it’s an emergency, the landlord (or a repair-person, or someone designated to act on behalf of the LL) can come in to make a repair. Unfortunately the way the clause was worded made it ambiguously vague, but not enforceable none the less.

Agreeing that the unit can be considered abandoned if the tenants are gone for more than 7 days

The Clause:  Abandonment is defined as absence of the Tenant from the property for a period of SEVEN (7) days or more consecutive days while rent or any owing monies remain unpaid – whereupon Tenant will be considered in breach of this Agreement. If Tenant abandons the property during the term of this Agreement, the Landlord may enter the property by any legal means, without being liable for such entering, and without becoming liable to the Tenant for damages caused upon entering. Landlord may consider any personal property belonging to the Tenant and left on the property to also have been abandoned in which case the Landlord may dispose of all such personal property in any manner the Landlord deems proper without becoming liable to the Tenant for doing so.

Not that my clients were planning on leaving the place unannounced, but this was still against what the act defines as abandoned:

“…Section 2(3) of the RTA provides that a rental unit is not considered abandoned where the tenant is not in arrears of rent. Even if there is evidence of abandonment, such as the furniture being removed, the landlord cannot treat the unit as abandoned before the end of the rental period if the rent is fully paid….”

Even if it was a legit abandonment the landlord would need to apply to the Landlord Tenant Board for an “order terminating the tenancy”.  The attempts to get a hold of the tenants in this situation must be well documented and through various means of communication. The landlord can’t just throw their hands up and declare it to be abandonment, there has to be an arrears in rent, and cumulative evidence that the tenants are no longer living there.

Rent Can Be Raised with 60 Days notice

The Clause: “The Landlord acknowledges and agrees that any increase in rent past the first year of Tenancy herein shall be requested by notice in writing to the Tenant al least 60 days prior to the end of the Lease Term. Furthermore, Landlord agrees that the amount of increase in rent shall be in accordance with the guidelines established under the applicable rent review legislation in Ontario.” Increases in rent can only happen once every 12 months, and 90 days notice have to be given for all increases. This was a new build, and any unit that was not occupied prior to November 15th 2018 for residential purposes are not currently under rent control. Even as a new build, the 12 month / 90 day rule does in fact apply.  Again this clause wouldn’t be enforceable but it’s best not to leave anything to chance or misinterpretation.