Key Responsibilities for First-Time Landlords in Toronto!

If you thought being a landlord was as simple as watching an e-transfer deposit a lump of money into your bank account each month, you’re dead wrong. There are many responsibilities that you must fulfill as a landlord in Toronto, whether it’s for property upkeep, unit entry, or deposit requirements. By ignoring such responsibilities, you risk damaging relationships with your residents and getting caught up in stressful legal proceedings. If you’re new to the game, here are some key landlord responsibilities to never forget:

RTA and LTB

Before we discuss anything about landlord responsibilities, the two most common acronyms you will hear in Toronto are RTA and LTB:

• Residential Tenancies Act (“RTA”) is Ontario law that gives landlords and tenants specific rights and responsibilities. The RTA covers most residential tenancies in Ontario, with several exceptions like student dormitories and nursing homes. Any of the landlord responsibilities noted below are in accordance with the RTA.
• Under the RTA, the Landlord Tenant Board (“LTB”) is an adjudicative tribunal that resolves disputes between you and your tenants. Certain processes, like when you apply to the court to evict your tenants, must require the use of LTB forms.
• The Standard Form of Lease, which must be used for most private residential leases, lays both tenant and landlord responsibilities in clear wording for anyone to easily understand. Although both landlords and tenants could agree to additional terms, those that contravene the RTA are deemed void.
• Make sure you follow the local bylaws and requirements regarding rental properties as well. For example, every rental apartment building in Toronto with 3 or more storeys and 10 or more units must register with RentSafeTO.

Tenant Selection

• You have the right to choose a tenant using income information, credit checks, references, rental history, and guarantors. You can ask a range of questions like what the tenant’s income level is, how many co-occupants will be living with them, if they have pets, or for past landlord references.
• Income information can only be considered on its own when no other information (e.g. credit history) is available, and only to ensure you earn enough to pay the rent. You may hear fellow landlords from other provinces and states recommend applying a rent-to-income ratio (e.g. 30%), but that’s not allowed in Ontario unless you’re applying for subsidized housing.
• On the other hand, you cannot ask for certain information, such as the tenant’s relationship status, sexual orientation, or ethnic background. You must be in compliance with the Ontario Human Rights Code, and must not discriminate against potential tenants.

Unlike in the movies, you cannot shut off water or other utilities, even if your tenant has not paid you rent. Photo by Jos Speetjens

Vital Services

• You must provide your tenants with access to hot and cold water, electricity and fuel (e.g. natural gas). Unlike in the movies, you cannot shut these services off, even if your tenant has not paid you rent.
• Vital services may be temporarily shut off for the minimum period necessary in order to make repairs. You must notify tenants of the interruption of vital services.
• In Ontario, landlords are not required to provide air conditioning as it’s not considered a vital service (although with the recent weather, air-conditioning should really become a vital service!).

Entry

• You must provide a 24-hour written notice to your tenant to enter a unit. You can only enter an occupied rental unit to conduct a maintenance inspection, to repair, or to show it to prospective tenants if the current tenants have given notice to move out. It’s important that unit entries be reasonable to not interfere with reasonable enjoyment, or else they can be considered harassment.
• You can only enter a unit without written notice if it is an emergency situation (e.g. a fire or flood) or if the tenant agrees to it. Otherwise, your written notice has to detail the reason, as well as the entry date and time, which must fall between 8 a.m. and 8 p.m. A tenant does not have to be present in the unit for you to enter.

Maintenance

• You must keep the rental property in a good state of repair, complying with all the applicable health, safety, housing, and maintenance standards. You’re responsible for repairing damage due to reasonable wear and tear over time, like a broken refrigerator or leaking pipes. You are also responsible for preventing and removing pests, like cockroaches, from your rental property.
• Tenants, however, must cover the cost of remedying any damage caused by the wilful or negligent conduct of the tenant or a person whom the tenant permits on the premises.

You must keep the rental property in a good state of repair for tenants — this is their home! Photo by Tim Arterbury

Pets

• You have the right to refuse a tenant if you suspect they will move in with pets.
• However, you cannot have a “no pets” clause in your lease. In other words, once you accept a tenant, you cannot evict them for pet ownership under most circumstances. There are exceptions to this provision, including your condo bylaws that prevent pets; or if a pet is dangerous, disturbs neighbours, or causes damages to the property.

Rents

• You are allowed to raise the rent by the provincial annual rent increase guideline amount (and with this, you should be thoughtful about your listing price during the property marketing process). The rent increase can happen 12 months after a tenant first moves in, or the last rent increase.
• The above guideline does not apply to new buildings, additions to existing buildings, and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018.
• You must provide the tenant with written notice of a rent increase at least 90 days before it takes effect.

Deposits

• Upon signing a new lease, you may collect a last month’s rent deposit for 12-month leases, which are common in Toronto. This deposit will be used as the tenant’s final rent payment for the last month in the rental unit.
• You may also ask for a refundable key deposit, but it cannot be more than the cost of replacing the key.
• Unlike other provinces and states, it’s illegal for you to charge a damage deposit or other additional charges to tenants in Ontario. This means you can’t ask for a $500 cleaning deposit just because your previous tenants left an absolute mess in the house when they vacated.
• If you want to increase your rent above the guideline amount, you must first apply to the LTB and notify the tenants 90 days before the increase. A landlord may apply for rent increases above the guideline under certain conditions, such as if there has been an extraordinary increase in municipal taxes or the landlord has eligible capital expenses related to significant renovations or repairs.

Your previous tenants leaving an absolute mess in the house doesn’t allow you to charge a cleaning deposit in Ontario. Photo by No Revisions

Eviction

• There is a legal process under the RTA, by which a landlord must follow in order to evict a tenant. You can’t just text your tenant to leave in two weeks because your children want to move in.
• You cannot change the locks or cut off vital services to evict a tenant. This can only be done by the Court Enforcement Office (the Sheriff), not the landlord, on the basis of an order from the LTB.

Becoming a landlord in Toronto can be a financially rewarding experience. Rental properties in Toronto not only have appreciated significantly over time, but they can also be financed for another property purchase and confer tax advantages. However, you definitely need to do your homework to be a successful landlord in Toronto, and the responsibilities above are just a few that you need to be aware of. If you don’t have the time or energy for all of this, check out Tolobi’s Property Management Concierge service for a hassle-free approach to managing your property. With our team of experienced, client-focused, and trustworthy professionals, we offer comprehensive tenant placement and property management solutions catered to your needs. If you have any questions, don’t hesitate to get in touch with us!

Disclaimer: The information contained in this blog is provided for informational purposes only and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this blog without seeking legal or other professional advice. Laws frequently change, and this blog might not be updated at the time of your reading.