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Subletting and Assignments – Can the Tenant do that?

Subletting and assignment of a tenancy are terms that are often confused. Here are some of the ins and outs for both of them. Sublets are much more prevalent in Ontario, so I will mostly focus on those.

Subletting

Under a sublet, the tenant allows another person to take over the use of the unit on a temporary basis. The original tenant plans to return. Consent of the landlord has to be sought. Situations with multiple tenants or roommates are generally not considered sublets. When submitting, the original tenant continues to be liable for the rental unit and remains the main contact for the landlord. The landlord continues to collect the rent from the original tenant. Taking rent from the sub tenant could be seen as establishing a direct tenancy between the landlord and the sub tenant, opening the door to a plethora of problems.


While the tenant must obtain the landlords consent to the sublet, the landlord cannot arbitrarily withhold their consent. Once consent is obtained, the subtenant has the right to occupy the unit up until the specified end date, giving the original tenant the right to take back occupancy on that date. Since the original tenancy agreement will stay in effect, any possible notices from the landlord will have to go to the original tenant (not the subtenant). It is advisable that the landlord make sure the tenant and subtenant sign a written subtenancy agreement with a clear termination date (move back date). Best practice would be for the landlord to refuse the subtenancy unless such an agreement is in place.


For further info see Section 97 of the RTA.

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Rental Assignments

An assignment means that all rights and responsibilities of the tenancy are being transferred to a new tenant. In other words, the whole agreement is transferred to a different person and the original tenant gives up their rights and responsibilities regarding the rental unit. The landlord has seven days to respond to such a request by the tenant. You can refuse the assignment as such or you can refuse the potential new tenant, if you deem them unsuited.


Consult Section 95 RTA for more details.

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The tenant left behind their belongings – What now?

There are four different scenarios for you to distinguish when it comes to tenant belongings that were left behind.


1. The tenant has vacated based on a notice

This scenario includes a notice that they received from the landlord, e.g. (N4, N5 etc.), the tenant notice given to the landlord (N9), a mutual agreement (N11) or an order of termination by the LTB.

There are belongings on the premises, the question now becomes whether it is clear that the tenant has moved out. Once it is clear you are allowed to sell, keep or dispose of the belongings. But how can you be sure that the tenant vacated the unit? The following indicators will help you determine:

  • Are the keys returned / left in mailbox?
  • Did anybody witness them moving out?
  • Did you receive their email or text message saying they are leaving
  • Were the utilities disconnected?


If you are not sure, it is advisable going through an eviction process via L2.
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2. The tenant is evicted by the sheriff

Once the eviction is completed, the landlord has to give the tenant 72 hours to collect her belongings. Those must be available to the tenant between the daily hours of 8 AM - 8 PM. Best practice would be to coordinate the pick up time with the tenant. After the lapse of the 72 hours the landlord can sell, keep or dispose.


3. The tenant abandons the unit

There is no agreement or notice to end to the tenancy, nor an LTB order. The tenant is in arrears and vacated the rental unit. If the rent is still being paid, the unit cannot be considered abandoned. Other factors to determine whether you are dealing with abandonment are:

  • Did they inform anybody of their move or did somebody witness them moving out?
  • Is the mail being picked up?
  • Are the utilities disconnected?

If you are uncertain, it is once again recommended to follow the L2 proceedings. Once you have confirmed abandonment, there are two possible options for you in dealing with the belongings. Either you apply for termination with the LTB based on abandonment (L2), or you give notice to the tenant as well as the LTB that the belongings will be disposed of if not picked up within 30 days. If the tenant gets in touch with you and comes out to pick up their belongings, you can request for them to pay any outstanding rent (as well as incurred out of pocket expenses).

4. The tenant has died
The RTA provides that a tenancy terminates 30 days after the death of a tenant. A surviving spouse can remain in the unit as a tenant. The landlord has to leave the belongings in the unit for the 30 day period. You need to provide reasonable access for an executor or family member to remove the belongings. After 30 days you can sell, keep or dispose of the belongings. There is a six-month period within which the tenant's family can claim back the belongings or any sales proceeds.


Much more detail on all these cases is provided on the LTB website:

LTB: Brochures


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Ontario Rental Vacancy Rates 2020

  • Toronto 3.4%
  • Ottawa 3.9%
  • London 3.4%
  • Peterborough 2.6%
  • Hamilton 3.5%
  • Barrie 2.1%
  • KWC 2.1%
  • Guelph 2.2%

Always interesting to keep abreast of vacancy rates, as they are a determining factor in a thorough calculation of Net Operating Income of a property. If you are in Toronto, you are likely to see a reduction in your NOI based on the most recent vacancy numbers. Toronto sees much higher vacancy rates due to Covid. Other Ontario cities show a more diverse picture, some with increases, some with declines. The full report gives insights on average rental rates, rent arrears and more.

The above is based on the CMHC report of Jan 28, 2021. The full report can be found here:
National Vacancy Rate Increased in 2020
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Top 5 Rental Search Sites in Toronto

Looking to rent an apartment or house in Toronto can at times be challenging. Traditionally, you would have tried to find a place on MLS or Kijiji. However, there is an ever growing number of websites out there that can help you find your rental. Not all carry the same quality of listings. Here are the ones we found most helpful.

ViewIt.ca

One of the older services but still very relevant. They have moved away from single family homes and now focus on apartments only. Used very broadly by landlords to post places for rent.

Realtor.ca

The official Multiple Listing System (MLS) of the real estate industry. Carries all the listings from licensed real estate professionals. This is an extremely reliable source.

Kijiji.ca

Kijiji is a classifieds marketplace for buying and selling all sorts of things. It has an established section with real estate listings. It has become a bit cluttered over the years e.g. with adds and is a bit challenging to navigate at times. Still an excellent source for houses and apartments for rent.

Padmapper.com

A newer service not as broadly used as the ones above, but quickly gaining traction. Landlords and property managers love it for the easy-to-use features. Looking for a rental on there is more fun than on other platforms. There is plenty of additional information that will help you with your search.

Zumper.com

Mostly identical listings to Padmapper and very similar functionality.

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Residential Rent Increases in Ontario

If you're a landlord and trying to get the max out of your rentals, you are most likely aware that there are strict rules around increasing the rent for your existing tenants. You are generally limited to an annual increase based on the Ontario rent increase guidelines. For 2020 that max. increase is set at 2.2%. The complete list can be found here: https://www.ontario.ca/page/residential-rent-increases

For 2021, most residential rents may not be increased at all, due to the covid related Government of Ontario Rent Freeze. Some exceptions apply and you can find all that information on the Ontario website.

One detail, that is often overlooked, is the 2019 Rent Control Change. This amendment relieves most newly built rental units from rent control, meaning you can increase the rent based on your preference. This allows the landlord to more easily catch up to market rates. The rule applies to residential units first occupied after November 15, 2018. Read on the LTB website for more details: https://tribunalsontario.ca/ltb-september-14-2018changes-to-rules-of-procedure-and-guidelines-for-review-and-comment-2-3-2/