Most Ontario private residential landlords must start using Ontario’s new Standard (Form of) Lease agreement (SLA) on April 30. All other current rental/lease agreements (such as the one provided by OREA) are no longer valid.
SLA is fraught with hidden perils for real estate professionals, with potential RECO insurance claims or worse, denial of coverage. RECO’s insurance program manager, Alternative Risk Services, confirmed that there have been claims for Human Rights Code (HRC) violations by Realtors. In some cases, Realtors erroneously thought they were following lawful instructions from their clients. RECO insurance covers only HRC compensatory damage claims. It doesn’t cover fines, penalties, punitive or exemplary damages.
The 13-page SLA includes a mandatory six-page Appendix A, filled with legal advice for tenants with a few snippets for landlords. It’s missing many clauses that should be of concern to every landlord. SLA permits adding clauses that don’t conflict with the standard text. I currently have 65+ clauses I’m drafting for my Appendix B.
The Landlord and Tenant Board (LTB) refused to discuss or clarify any of my concerns about SLA, stating it was created by the Ministry of Housing and the LTB’s job is only to arbitrate legal disputes that subsequently arise. I anticipate there will be many such disputes, further clogging an already broken “justice delayed-justice denied” legal process.
A Realtor’s first obligation to provide a duty of care and skill to their client implies competency and knowledge of the real property services they’re providing. Therefore, a Realtor advising clients on buying a residential rental property or placing a tenant must have familiarity with a confluence of acts: Human Rights Code, Privacy Act, Residential Tenancies Act, PIPEDA, municipal bylaws, Fire Code, Building Code, Electrical Code, Municipal Act, Rental Fairness (for whom?) Act, Condominium Act and more. If you think qualifying a tenant doesn’t require this breadth of knowledge, you’d be wrong.
Some of SLA’s legal advice is misleading.
Point 6 states a landlord must provide electricity usage details for the previous 12 months, but privacy legislation prevents the landlord from obtaining that information if the previous tenant paid for their own electricity. The SLA should say that if a landlord acting reasonably can’t obtain this information, they don’t have to provide it.
SLA’s point 10 states a landlord must follow the Ontario HRC with respect to smokers, which suggests smokers might have some in-suite smoking right. Under HRC, housing providers have a duty to accommodate the code-related needs of tenants, but smokers are not specifically identified as one of the 14 protected grounds. Some smoking lobbyists claim that smoking is actually a disability because it’s addictive, and the category of people with mental disabilities have a disproportionately high number of smokers.
Point O states a landlord must give keys to the tenant if the locks are changed but it doesn’t say that a tenant must reciprocate. The proper explanation should be that a landlord doesn’t require the consent of the tenant to change the lock provided they give the tenant a replacement key, and tenants can’t change their rental unit locks without the consent of the landlord – period, which is an RTA breach.
Point R states a tenancy agreement can’t prohibit pets. The RTA contains a single sentence about pets: “A provision in a tenancy agreement prohibiting the presence of animals in or about the residential complex is void.” That doesn’t mean a landlord can’t deny a tenancy applicant because they own a pet or advertise a no-pets policy, excluding service animals.
So, what 65+ points are missing that a Realtor or landlord should know? It’s beyond the scope of this article to list them all but below are some highlights. The full list is here.
- Other occupants who aren’t lease signatories
- Joint and several tenancy
- Use of tenants’ personal information
- Death of tenant
- Apartment abandonment
- Utility accounts access permission
- Photograph permission
- Last month interest versus top-off
- Credit reporting permission
- Guarantor obligations
- Short-term sublet (Airbnb)
- Tenant bankruptcy
- Other tenants’ right of quiet enjoyment
- Energy conservation
- Unit alterations/decorating
- Unit inspections
- Parking lot rules
- Laundry room rules
- Garbage/recycling
- Responsibilities for human/creature guests
- Inhibit mould-growing practices
- Lockouts
- Interest on LTB-awarded rent arrears
- Satellites dishes, Internet routers
I also have clauses that reiterate some legislation such as landlord access because some tenants argue that they didn’t know the law, refuse to acknowledge it when presented to them and are sometimes supported by LTB rulings that favour tenant ignorance. The existence of professional tenants in particular falls squarely on the shoulders of RTA lawmakers and LTB rulings. All tenants nevertheless know they’re responsible for anything they sign and a robust lease weakens their ignorance-of-the-law argument.
If you don’t know the laws related to residential tenancy, I can almost guarantee that you as a Realtor or landlord will become a victim of it.
Chris Seepe spent 35+ years in I.T. before entering commercial real estate a decade ago. He’s a published writer and author of two books on “landlording,” course instructor, president of the Landlords Association of Durham, and a commercial real estate broker of record at Aztech Realty in Toronto, specializing in income-generating and multi-residential investment properties. Call (416) 525-1558, or send him an email.
