The Renting Guide: Applying to Rental Properties in Ontario

If this is your first time renting in Ontario it can be difficult to navigate the rental process. Renting is an essential move for many young homeowners, as the cost of a full mortgage can be out of reach for those just out of grad school. Renting gives young investors time to save and plan for their first downpayment, so long as they go in with a plan and get the best value they can. Smart renters need to understand their rights, responsibilities and and expectations of renting before signing that dotted line. From the application, lease, insurance, documentation and move in requirements, below are the most important things you need to know before renting a property in Ontario.

1. VIEWINGS. Renting has specific rules and regulations regarding time and tenancy rights that may prohibit you from seeing properties on a whim.

2. OFFER TO LEASE – as soon as you find the property you like you should proceed with the Offer to Lease. Your Realtor has to prepare the Offer you will have to sign. The Offer will have different/standard clauses and/or conditions. There must be OCCUPANCY DATE (move-in date), RENT AMOUNT, LEASE TERM (usually minimum 1 year). As soon as it is signed by Applicants (You), your Realtor must send it immediately to the Listing Agent.

3. RENTAL APPLICATION – has to be filled out with all the Applicants’ information and sent to the Listing Agent together with the Offer. There are Applicants and Occupants. Occupants most of the time are children or elderly people who don’t have a proof of income and credit report, who are supported by the Applicants.

4. CREDIT REPORT – is obtained from equifax.ca (there is a charge) or www.creditkarma.com (free). Credit Reports with Credit Scores show Applicant’s credibility and any Financial Obligations. These reports mostly are available for Canadians, Americans, English, Australians. Many countries don’t have this system. If the Credit Report is not available, then it can be supported by Statements of Investments or Savings or by offering 6-12 months’ rent up-front payment. Credit Report is submitted together with the Offer.

5. PROOF OF INCOME – is submitted together with the Offer. Pay stubs, Letter of Employment, Notice of Assessment (Taxes), Bank Statements (min 3 months) or Investments – anything showing that you are able to pay the rent.

6. ACCEPTANCE – after all documents are submitted by your Realtor to the Listing Agent, You wait until the Irrevocable time expires – the answer from the Landlord’s Representative (Listing Agent). The Offer can be accepted, signed back or declined.

Irrevocable time – is the time frame until your offer is valid and the other party have to make the decision.

Sign back – is the offer sent back to you by the Landlord with changes, terms or conditions the Landlord didn’t accept.

Acceptance – you are accepted as Tenants and you have 24 hours to submit the deposit.

7. DEPOSIT – it is 2 Month Rent Amount provided within 24 h after Offer acceptance. It has to be in Certified cheque or Money Draft obtained from a Canadian Bank. It is payable to the Listing Brokerage and is held in Brokerage’s Trust Account until Closing. In some cases, ETF (electronic transfer funds) is accepted, but many Brokerages don’t accept that and the transfer may take up to 10 days to be received.

8. STANDARD ONTARIO LEASE AGREEMENT – it is a new Lease Agreement, standard in Ontario. Many terms and clauses are repeated from the Initial Offer to Lease you signed. The best to be signed before moving in date.

9. POST DATED CHEQUES – it is an old way but a very convenient way to pay rent. You give the Landlord 10 post-dated cheques for the remaining of the year term (2 months’ rent was given as a deposit). The date on the cheque is post-dated and the Landlord only can take the money on that day. Another way is electronic transfer – the best and fastest – e-mail transfer (if both parties agree).

10. KEY DEPOSIT – sometimes Landlords ask for a key deposit. It is refundable upon you vacating the premises, once you return all the keys back to the Landlord. Some properties, like condos, have more complex key systems, fobs and remote openers and they are costly. The key deposits vary from $100 to $500. This clause is added in the Offer to Lease.

11. PET DEPOSIT – Pet deposit is not legal in Ontario. Landlords are not supposed to ask for it. But Tenants can always offer if the Landlord refuses to accept pets. Some bigger dogs sometimes do damage the floors and it may be costly to the Landlord to repair it after tenants move out. The deposit is refundable upon vacating the property in normal wear and tear and has no big damages from pets. This deposit clause is included in the Offer to Lease if agreed by both parties. 

12. TENANTS INSURANCE – before taking possession of the property Tenants in Ontario must obtain the Tenants insurance. It covers personal belongings and liability (min $1 million in some cases and more expensive properties $2 million liability). It could be obtained at any Insurance company or added to your car insurance policy. It could cost anywhere from $25 to $45 per month. Most of the time Landlords require the proof of Insurance before the Occupancy date.

13. UTILITIES – some properties have all Utilities included in rent and some – extra. Most of the time Hydro (Electricity) is extra. It is required that tenants open their own accounts for Utilities before Occupancy date and provide proof of it to the Landlord before taking the possession and getting the keys. The setting up an account is easy – either by phone or online. In some cases, the deposit is required which is refundable or applied to the bill at the end of the tenancy.

14. OCCUPANCY DAY – this is the day when you meet with the Landlord or his representative/property manager and exchange the keys, deposits, show the proof of Insurance and Utility transfers. Walk the premises to make sure it is clean and everything is fixed as agreed in the Tenancy Agreement.

15. MOVE IN DATE – you can move in on the same day when you picked up the keys or any day later. Make sure you have booked the elevator with the Property Management if it is a condo and all associated fees are paid. There is a move in deposit ($200-$500) to use the elevator and is refundable right after the move-in is over and after the Concierge’s inspection that there are no damages done to the elevator or common areas. Some condo buildings ask for another Move-in deposit which is not refundable. Most of the time it is smaller than the Elevator deposit.

16. END OF TENANCY – when you decide to vacate the premises after the 1-year period (or any agreed term), you must give 2 months’ notice in writing to the Landlord.

17. RENT INCREASE – by Ontario law, Landlords are allowed to increase rent each year by a posted Rent Increase guideline (https://www.ontario.ca/page/rent-increase-guideline). Most of the time it is around 2%. If the condo or property is brand new or was built after November 2018 – the Landlord can increase the rent as much as he/she wants according to the Market Rents (this is new legislation not covered by rent control) – https://www.legalline.ca/legal-answers/rent-increases-and-maximum-rent/  

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