Now more than ever, renting is a viable alternative to homeownership, especially if you value your mobility or aren’t ready to commit to a mortgage. If you choose to rent rather than buy, you can also forgo costs associated with real estate agents, property taxes, and home maintenance.
In this guide, we’ve compiled some common dos and don’ts that tenants should observe when renting a property.
The Tenant’s Guide to Renting: Dos and Don’ts
- Anticipate that you will be subject to a credit report. If your application is approved, you will need to provide a security deposit.
- Know your legal rights with regards to entry into your unit and rules for eviction.
- Get all of the details of your rental arrangement in a legally binding written contract and avoid leaving anything to hearsay.
- Consider investing in renters insurance to protect your belongings in the event of unforeseen circumstances.
- Expect annual, legally-admissible rent increases.
- Merely skim your rental agreement before signing.
- Make any major renovations, structural or cosmetic, without explicit permission from the landlord or property owner.
- Break the terms in your rental agreement—for instance, by missing payments or subletting your unit.
Do: Anticipate a Credit Report and Security Deposit
Many landlords and property owners require a credit report. This helps them to avoid tenants who have a track record of racking up debts. If you don’t have a credit history, not to worry. In lieu of a credit report, tenants can provide the name of a guarantor, who is a person with a good credit history who will pay the rent on your behalf, in the case that you are unable. More information on credit reports and scores in Canada can be found here.
One expense you should anticipate is a security deposit, also known as last month’s rent. This is in combination with your first month’s rent, so make sure you have the funds available for at least two month’s rent when searching for a rental.
Your security deposit will be used to cover any damage to the apartment by the time you move out—but if you’ve left the unit in the same condition as when you moved in, your deposit will instead be used to cover the last month’s rent. As such, it is in the tenant’s best interests to ask for an inspection, to confirm the condition of the unit before move in, as well as any pre existing damage.
Do: Get Everything in Writing
It’s important to include any and all details of your rental arrangement in a legally-binding written contract. Your written contract should include all nitty-gritty details, such as the method of rent collection, the due date for rent, the services/utilities included in the rent, the grace period or consequence for late payments, and rules for guests, pets, and renovations, amongst more.
You might find that there are certain arrangements that you and your landlord agree on orally. If those agreements aren’t included in your contract, you should also keep your own record with dates and particulars. If a dispute ever arises, you can refer to your communication log to get to the bottom of the dispute.
Do: Consider Renter’s Insurance
Sadly, rental agreements rarely protect tenants from damage incurred to personal belongings due to emergency situations, such as theft, fire, and flood. This is because the landlord or property owner is responsible for the unit itself, but not the tenant’s possessions.
This is exactly why renter’s insurance exists. In some cases, renter’s insurance is actually required by the landlord or property owner. In other cases, it is up to the tenant to have renter’s insurance in place. Renter’s insurance can protect tenants against unforeseen circumstances, including theft, damage, and lawsuits.
Do: Expect Rent Increases
In Ontario, landlords and property owners can increase rents once every 12 months. That said, they must provide tenants with at least 90-days notice in writing before the increase occurs. Moreover, this notice must be provided by the Landlord and Tenant Board.
While annual rent increases are certainly legally admissible, there are guidelines in effect that regulate how much rents can be increased each year. Tenants can find out more about the rules for residential rent increases in Ontario here.
Do: Know Your Legal Rights
Entry Into Your Unit
Under normal circumstances, a landlord or property owner must provide the tenant with written notice specifying when and why they will be entering your unit. The notice must be given at least 24-hours before entering the unit, there must be a sensible reason, and the unit can only be entered between 8:00 a.m. and 8:00 p.m.
That said, the exception is if your landlord or property owner perceives an emergency situation, in which case they can enter the unit without observing the above-mentioned parameters.
Rules for Eviction
If, for whatever reason, you are being evicted from a rental property, the landlord or property owner must first provide you with written notice. The notice must be provided by the Landlord and Tenant Board. With that said, you can not be forced out of the property without an eviction order, also via the Landlord and Tenant Board, which differs from the initial written notice. You also have a right to a hearing.
There are also manners of wrongful eviction, which tenants should make themselves aware of. These include evictions for personal use, reno-victions, and bad faith evictions, all of which may result in the tenant receiving some degree of compensation.
You can find out more about your legal rights as a tenant under the Residential Tenant Act.
Don’t: Skim Your Rental Agreement
Before you sign the dotted line of your rental agreement, read it through with a critical eye. Though many of us merely skim through text-heavy contracts, it’s important to consider human error when dealing with rental agreements. Properly reading your agreement will allow you the chance to confirm that everything you’ve discussed with your landlord orally has been included in the agreement.
For example, if you’ve agreed upon any repairs that need to be done prior to your move-in date. Some other things to look out for are stipulations about guests, pets, renovations, or running a business out of your home. Double checking that every detail is in writing before you sign could end up nipping future disputes in the bud.
Don’t: Make Major Renovations
A rule of thumb for renters is to leave the unit in the same state from move in to move out. For the most part, this means forgoing major renovations, structural as well as cosmetic. When in doubt, consider the hammer rule. If the renovation requires extensive use of a hammer, it’s probably not a suitable reno for a rental unit.
That said, if tenants would like to paint the walls, change out cabinet faces, or replace the ceiling fan in the unit, it should be a collaborative effort with the landlord or property owner. If all parties agree to the renovation, ensure there is a written contract in place that includes specifics on the renovations that will be done, companies or contractors that will be used, and details on financial reimbursement.
Don’t: Break the Terms of Your Rental Agreement
Missing Rent Payments
As a tenant, paying your rent on time and in full is your legal obligation. That said, if you know you’re going to be unable to pay your rent on time, for whatever reason, your first step should be to speak to your landlord to see if any leniency can be offered or if an alternative payment plan can be worked out. Under the Protecting Tenants and Strengthening Community Housing Act, landlords are encouraged to negotiate a repayment agreement with a tenant before seeking eviction for rent that has not been paid during the turmoil of COVID-19.
Subletting your unit is illegal in Ontario if it is done without explicit consent from the landlord or property owner under the Ontario Residential Tenancies Act. This is because the landlord or property owner does not have a contractual agreement with the subletter, opening them up to liability. If you are considering subletting, consult your rental agreement and speak to the landlord or property owner to find out what they consider permissible when it comes to sub-renting.
THE BOTTOM LINE: if you’re not sure about something contained in your rental agreement, or have questions about something that’s not included in your contract, your best bet is to open a line of communication with the landlord or property owner, to ensure you are on the same page and can avoid time-consuming and costly legal disputes down the line.
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