COVID-19 has flipped the Canadian rental market on its head. Cities have seen skyrocketing downtown rental listings and declining prices, making it an ideal market for renters.
Despite these unusual circumstances, prospective tenants can benefit from a wider variety of options on the market. Increased levels of inventory, coupled with dropping prices, have shifted the market’s balance in favour of renters, providing them with more listings to choose from at discounted prices. Like with resale transactions, both landlords and tenants can recruit the support of a Realtor to help them through the rental process.
If you’re on the hunt for a new apartment, or just want to get a better understanding of leasing terminology here are five essential terms everyone should know before signing a rental agreement.
*Note some leasing terminology or rules vary by province.
A lease term, referred to as the term of the tenancy agreement, is the duration (how long) the lease agreement is in effect.
A fixed-term tenancy requires the tenancy start and end on a specific date outlined in the agreement. The tenant is not required to move out at the end of the lease term or renew their agreement. Instead, they may choose to live in the apartment on a month-to-month basis if their agreement is on a fixed-term, or agree to enter into a new agreement altogether with the landlord.
Periodic tenancies also exist, where the agreement has a start date but no end date until a tenancy termination is provided.
If a tenant wishes to terminate and leave their lease agreement, they can provide notice to end tenancy. This notice is often required to be served in writing many weeks before the tenant intends to move out, or their fixed-term lease is expected to end. In British Columbia, tenants can give 30 days’ notice to vacate; while in Toronto it is 60 days.
In cases where the tenant wishes to leave their tenancy before the end of the fixed-term agreement, there are a couple of options.
If, for whatever reason, you need to leave early, then subletting is essentially your only real, viable, legal option. Your other option, and it’ll be entirely at the say so of the landlord, is to speak to the landlord and see if you can mutually agree to end the lease early.
In the event a tenant wants to move out of their rental unit temporarily, but not terminate the tenancy agreement, they may propose enlisting a sublet to take over the unit.
A sublet, or sub-tenant, lives in the tenanted unit until a specified date, but this does not change the existing lease conditions between the landlord and tenant. While the tenant recruits and chooses the sublet, the landlord gives the final approval on the sublet to ensure they are suitable.
You should try to include a condition, in the lease, that says you have the right to sublet, but the landlord has the ultimate right to approve that person or reject that person. The landlord won’t help you find somebody to sublet your property, but they do need to approve that person prior to occupancy.
A deposit is an amount of money put forward as an installment on the lease agreement, and used as future payment for a portion of the lease. In some cases, a lease agreement may contain other types of refundable deposits. Deposit amounts and rules are different in each province.
In British Columbia neither a lease’s security deposit and pet damage deposit can exceed one-half of the monthly rent.
Security and damage deposits are not legal in Ontario, but refundable key deposits are. Landlords must also pay interest on the deposit to the tenant every year. A REALTOR® can help tenants and landlords to determine which provincial deposits are appropriate in their lease.
For example, key deposits have to be the replacement cost, they can’t be some arbitrary number. So the actual replacement cost for the key, can be requested by the landlord.
In Good Repair
Unlike resale agreements, leases do not provide an inspection clause that covers the property’s physical condition. However, leases do set the groundwork for the responsibilities of the landlord and the tenant to keep the property in good repair; a standard that addresses the maintenance and repairs the unit requires.
The lease agreement can specify the procedure for when appliances break down, or list any work requested to be completed prior to the tenant’s occupancy.
Before signing make sure that everything you want done, or want, make sure, it is instituted into the agreement. If work needs to be done on the property, it has to be specific and it has to have a time frame.
If you’re browsing for your next rental apartment, or are looking to get your residential or commercial rental listing to a large audience of potential tenant, contact me and I can help you through the process.