Real Estate

Lease Agreement Clause Clarification

  • Last Updated:
  • Dec 20th, 2018 1:21 pm
[OP]
Newbie
Aug 9, 2014
32 posts
8 upvotes
Toronto, ON

Lease Agreement Clause Clarification

Hello everyone,

This is in Ontario province.

I am seeking your feedback on the below clause in a lease agreement I am to sign for a new townhome. Not sure if this is standard or common in lease agreement.
"Tenant consent that landlord may not allow to extend or renew the lease if landlord is not able to get the financing even though tenant is in a good standing the lease is set for only one year with no renewal or extension."

I am a little bit uncomfortable with this provision "the lease is set for only one year with no renewal or extension." My plan is to stay for a few years in the rental unit and I am trying to avoid the landlord asking to terminate the lease after one year based on this provision.
Note, just an fyi, the landlord is also a realtor.

In past rentals up to date, I pay by post-dated cheques and never missed a date and always have good relationships with landlords.

thanks in advance.
44 replies
Deal Guru
User avatar
Mar 23, 2008
11500 posts
7785 upvotes
Edmonton
You should contact the LTB for an actual answer, but I don’t believe a clause like that is valid. Having said that, you’d be kind of foolish to accept a lease like that if you want a multi-year lease. It’s clear the landlord doesn’t want to do that, and there are ways they can terminate the lease anyways. It’s not worth the hassle.

C
[OP]
Newbie
Aug 9, 2014
32 posts
8 upvotes
Toronto, ON
CNeufeld wrote: You should contact the LTB for an actual answer, but I don’t believe a clause like that is valid. Having said that, you’d be kind of foolish to accept a lease like that if you want a multi-year lease. It’s clear the landlord doesn’t want to do that, and there are ways they can terminate the lease anyways. It’s not worth the hassle.

C
Thank you C for the feedback. It is too hard to move out from place to another and this clause is not making sense to me as I interpret it the landlord wants to cap the rent term to a year.
I will call LTB to see what they will say.

cheers
Newbie
Oct 22, 2017
55 posts
44 upvotes
Yeah I dont think it's valid either. But do you really want to get into a situation like that where the landlord will try and get you out after 1 year anyways? I'd probably keep looking if it was me.

Good luck!
Newbie
Dec 24, 2006
46 posts
3 upvotes
toronto
CNeufeld wrote: You should contact the LTB for an actual answer, but I don’t believe a clause like that is valid. Having said that, you’d be kind of foolish to accept a lease like that if you want a multi-year lease. It’s clear the landlord doesn’t want to do that, and there are ways they can terminate the lease anyways. It’s not worth the hassle.

C
C this is great advice and I couldn't agree more.

I believe Section 37 (5) of the RTA would apply here but as mentioned by C you would be in for a hassle.

When agreement void


(5) An agreement between a landlord and tenant to terminate a tenancy is void if it is entered into,

(a) at the time the tenancy agreement is entered into; or

(b) as a condition of entering into the tenancy agreement. 2006, c. 17, s. 37 (5).
Deal Fanatic
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Sep 8, 2007
8718 posts
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Way Out of GTA
I’d probably sign it without even bringing it up...since I don’t think it’s even enforceable in Ontario. But yes clarify with LTB.
"It is in times of great fear or greed that the most opportunity exists."
Sr. Member
May 3, 2013
643 posts
199 upvotes
Toronto
AYAM78 wrote: Hello everyone,

This is in Ontario province.

I am seeking your feedback on the below clause in a lease agreement I am to sign for a new townhome. Not sure if this is standard or common in lease agreement.
"Tenant consent that landlord may not allow to extend or renew the lease if landlord is not able to get the financing even though tenant is in a good standing the lease is set for only one year with no renewal or extension."

I am a little bit uncomfortable with this provision "the lease is set for only one year with no renewal or extension." My plan is to stay for a few years in the rental unit and I am trying to avoid the landlord asking to terminate the lease after one year based on this provision.
Note, just an fyi, the landlord is also a realtor.

In past rentals up to date, I pay by post-dated cheques and never missed a date and always have good relationships with landlords.

thanks in advance.
The clause is not enforceable, your creditworthiness as a tenant does not play a role in this.

However, the landlord has explicitly expressed a concern about not being able to renew his/her financing, or s/he has plans to sell the property untenanted next year. Whatever the case, the landlord is being transparent. Like another post suggests, if you are uncomfortable with the provision, you should look for another place. Although the law favours the tenant, landlords and tenants should work with each other as much as possible. A previous client of mine needed a short-term rental and a landlord wanted to rent his place for a short-term, we signed a N9 (even though on the form it says the N9 is not valid in that case) and everyone was happy. There's no point in tricking the landlord, imho.
Deal Addict
User avatar
Jan 2, 2012
3911 posts
1771 upvotes
Toronto
AYAM78 wrote: Hello everyone,

This is in Ontario province.

I am seeking your feedback on the below clause in a lease agreement I am to sign for a new townhome. Not sure if this is standard or common in lease agreement.
"Tenant consent that landlord may not allow to extend or renew the lease if landlord is not able to get the financing even though tenant is in a good standing the lease is set for only one year with no renewal or extension."

I am a little bit uncomfortable with this provision "the lease is set for only one year with no renewal or extension." My plan is to stay for a few years in the rental unit and I am trying to avoid the landlord asking to terminate the lease after one year based on this provision.
Note, just an fyi, the landlord is also a realtor.

In past rentals up to date, I pay by post-dated cheques and never missed a date and always have good relationships with landlords.

thanks in advance.
All leases automatically continue on month-to-month by default after any original lease ends, by LTB law. Whatever any lease agreement says otherwise is irrelevant.

However while the clause itself is not legal or enforceable, it's obvious the owner may want to sell their property in 1 years time and if this happens and the new owner wants the property for their personal use, they will legally be able to evict you. Again this has nothing to do with any lease terms you sign upfront, it's simply the LTB rules.

If the owner doesn't sell, and doesn't need the unit for their own personal or family use (so to live in and not to re-rent it), then you would legally be able to stay regardless of what any lease agreement said.

Knowing their possible intentions upfront and what may happen, you really need to question if you want to rent this particular place.
Deal Guru
User avatar
Mar 23, 2008
11500 posts
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Edmonton
AYAM78 wrote: Thank you C for the feedback. It is too hard to move out from place to another and this clause is not making sense to me as I interpret it the landlord wants to cap the rent term to a year.
I will call LTB to see what they will say.

cheers
All they have to do is say that they want it for personal use when the year is up, and you'll be out. You can try to fight it, you can make it a pain in the butt for them, you can take them to the LTB and claim damages, but you'll be out. Find a different place if you want a multi-year lease. Your prospective landlord is not some novice; they're a realtor who will likely know the tricks involved with getting rid of a tenant.

C
[OP]
Newbie
Aug 9, 2014
32 posts
8 upvotes
Toronto, ON
Guys,
These are all very helpful points and feedback. Thank you loads everyone. I am not comfortable with the possibility and/or hassle to move out again in a year should the landlord decides to sell and the new owner wants to move rob444 indicated.

Just a note that may be worth mentioning is that the landlord owns multiple properties on this development as I was shown two of them yesterday. There is a likelihood that the intention is to sell in a year.

AYAM78
Banned
Aug 24, 2018
196 posts
119 upvotes
If you sign it, It is enforceable.

People can sign away any rights they may or may not have.
Deal Guru
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Mar 23, 2008
11500 posts
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Edmonton
otismod wrote: If you sign it, It is enforceable.

People can sign away any rights they may or may not have.
Again spouting opinions as facts... The LTB regularly discards unenforceable clauses in leases.

C
Deal Fanatic
Feb 22, 2011
7299 posts
7784 upvotes
Toronto
Does it even matter? If owner can't get financing it will be force sold and new owner will take possession for personal use or will take over tenant.
Deal Addict
Jun 18, 2018
1289 posts
801 upvotes
Toronto
I've looked into this quite a bit and it is not enforceable. However, things like if they want to sell the property or move in personally (or a family member) are allowed and then you are out of luck.
[OP]
Newbie
Aug 9, 2014
32 posts
8 upvotes
Toronto, ON
Electrah wrote: I've looked into this quite a bit and it is not enforceable. However, things like if they want to sell the property or move in personally (or a family member) are allowed and then you are out of luck.
Thanks guys, yeah unfortunately it sounds like the landlord is a motivated seller/flipping properties in a short while if I am getting this right. I will be out of luck just based on that possibility of a new owner moving in.

regards

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