Lease agreements lay the groundwork for a successful landlord-tenant relationship. In this comprehensive guide, we’ll explore the nuances of lease agreements, offering valuable insights for both landlords and tenants to navigate the leasing process seamlessly.
Essential Elements of a Lease Agreement:
A well-structured lease agreement is essential. We’ll discuss the key elements that should be included, covering everything from lease duration to clauses and the Ontario Standard form of Lease, a mandatory form in Ontario.
Understanding Lease Terms and Conditions:
Lease terms and conditions can vary. Most real estate agents will have a standardized Schedule A, a series of pages that form a part of the Agreement to Lease.
This document should include information such as smoking rules, details about if and how decorating the property should be handled, if permission is required, what’s expected of the tenant when they leave, what tasks the landlord will perform before the lease term begins, such as carpet cleaning or duct cleaning, what appliances are included for the tenant’s use. Etc. Below are some examples of specific things you should consider:
What’s Included in the Rental Agreement
If an appliance or feature is at the property and the landlord does not want to be responsible for replacing or maintaining it, such as a microwave, hot tub, or pool, it should be mentioned in the lease.
Identify who’s responsible for regular maintenance, which covers opening and closing of the pool, and if the microwave is there for the tenant’s use but the landlord doesn’t want to be responsible for replacing it if it breaks, ensure that’s listed as an exclusion from the lease.
Failing to identify these details clearly would likely be interpreted as these items being included with the lease, and therefore the rental rate includes a premium for these items, and, should they fail, the Landlord would be responsible for replacing or repairing the item(s), or reducing the rent instead of them not being functional.
Decorating a Rental Unit
As a Landlord, you should want your tenants to be happy and comfortable and to make your property feel like their home. This requires decorating. Whether painting, installing artwork, hanging a television, or replacing light fixtures, you should be open-minded to accommodate such requests.
It’s essential though, to include clauses that lay the groundwork for handling these things in advance.
We recommend that electrical and plumbing tasks be handled only by licensed professionals, that the landlord approves all requests in advance, and, if the upgrade is a permanent one that stays with the property, be open to participating in the cost, they are, after all, adding value to your investment.
Another way to handle upgrades is to a temporary increase in rent until an agreed amount has been paid.
Whatever the request, communication and reasonable consideration are crucial to building a healthy relationship.
How Long Should the Rental Agreement Be?
The answer to this varies with each situation, but we generally suggest keeping the initial term to around one year.
In Ontario, you’re able to increase rent every twelve-months. However, if the lease term is twenty-four months, you have to wait until the end of the term. It may also be hard to gauge where you’ll be, what you’ll be doing, and whether or not you want keep the property that long.
You may go through a job change, job loss, or, perhaps, the opportunity of a lifetime presents itself and it requires selling your assets and packing your bags. Being committed to more than a year rarely has advantages, so we’d suggest to keep it to one year and allow the lease to default to a month-to-month lease at the end of the term.
Do I Have to Renew My Lease
It’s common that tenants and landlords alike are unsure of what happens at the end of the initial lease term, so here are some key points to remember.
- Neither the landlord nor the tenant can force the other to sign a new lease term.
- If no new lease term is signed, the conditions and clauses in the original lease remain in place, and the term converts to a month-to-month lease, where the tenant and landlord would have to provide sixty days of notice if they wanted to leave or occupy the property.
- If the landlord and tenant agree to a lease extension, you can prepare a new lease agreement for another fixed period of time, but you must abide by any rent increase regulations that may exist.
The Ontario Standard Form of Lease
As a Landlord, you must familiarize yourself with the Ontario Standard Form of Lease. This document is required and must be provided to the tenant by the Landlord. In fact, if the tenant requests a copy and the Landlord doesn’t provide it, there are set periods of time after which the tenant is able to withhold rent.
