Real Estate

Want to rent month-to-month, landlord wants new lease (Ontario)

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  • May 6th, 2020 8:22 am
[OP]
Newbie
Jul 24, 2010
75 posts
9 upvotes
Ontario

Want to rent month-to-month, landlord wants new lease (Ontario)

Currently renting a house in Ontario, lease term ends July 31st. Our plans have changed because the world has changed, and while we don't really want to stay our plans may take more time.

I told the landlord we'd like to stay on Month to month after the term ends. They're fine with us staying (they'd be crazy not to, we're good tenants!), but they want us to sign a new lease with a 60-day termination notice clause.

On the surface this seems fine, we'd have to give 60 days' notice anyway.

But I'm not sure how this works. Is a 60-day termination clause on a one-year lease legal and enforceable? If we decide to move (for example) September 30th, and give notice July 31st using the 60-day clause, could we face problems because the 60-day clause violates the standard 1-year term?
10 replies
Deal Guru
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Mar 23, 2008
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Edmonton
groovejumper wrote: Currently renting a house in Ontario, lease term ends July 31st. Our plans have changed because the world has changed, and while we don't really want to stay our plans may take more time.

I told the landlord we'd like to stay on Month to month after the term ends. They're fine with us staying (they'd be crazy not to, we're good tenants!), but they want us to sign a new lease with a 60-day termination notice clause.

On the surface this seems fine, we'd have to give 60 days' notice anyway.

But I'm not sure how this works. Is a 60-day termination clause on a one-year lease legal and enforceable? If we decide to move (for example) September 30th, and give notice July 31st using the 60-day clause, could we face problems because the 60-day clause violates the standard 1-year term?
I would ask them WHY they want you to sign a one-year lease if there's a 60 day termination option.

AFAIK (and IANAL), you SHOULD be ok with the 60 day clause in your new agreement, as the LTB is tenant friendly. However, they have the right to void any clause that violates the RTA, and that clause would qualify, I think. So if your landlord decides to make a huge stink about it, you might have some issues.

Your landlord can't force you to sign another lease; your lease automatically rolls over to a month-to-month. However, they would then have the option to evict you for personal use, or raise your rent.

C
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Apr 6, 2020
87 posts
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Toronto
Theoretically they always have the option to evict for personal use, and they can raise rent once per year. Negotiate with the landlord for a decreased rent in exchange for signing a new lease as you aren’t required to sign a new lease, and explicitly put it in the contract that you’re able to terminate the lease at any point before the 1 year mark, with 60 days notice and no penalties. Otherwise there is no point in locking yourself into a new lease for a year
GTA Real Estate Agent
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Jul 3, 2011
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Thornhill
As Cneufeld noted, that 60 day termination clause would be invalid - you'd be stuck with the term of the lease needing to find an out that isn't going to cost you, if your LL decided to not let you out of it.

You cannot be forced into a fized term lease. But compromise is probably okay since the LL is likely thinking now is not the time to find a tenant - reduced rent, employment issues etc. So offer something else like the 4 months that takes you to a Sept. exit if you decide to leave with notice by the end of the current July term, seems a good alternative.
Deal Addict
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Jan 2, 2012
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Toronto
groovejumper wrote: Currently renting a house in Ontario, lease term ends July 31st. Our plans have changed because the world has changed, and while we don't really want to stay our plans may take more time.

I told the landlord we'd like to stay on Month to month after the term ends. They're fine with us staying (they'd be crazy not to, we're good tenants!), but they want us to sign a new lease with a 60-day termination notice clause.

On the surface this seems fine, we'd have to give 60 days' notice anyway.

But I'm not sure how this works. Is a 60-day termination clause on a one-year lease legal and enforceable? If we decide to move (for example) September 30th, and give notice July 31st using the 60-day clause, could we face problems because the 60-day clause violates the standard 1-year term?
All leases go month-to-month automatically. There is no rule that you must sign a new fixed term lease.

Typically a fixed term lease is in the tenants best interest, as during the time the fixed term is in force they are not able to evict you even for personal use reasons.

Even in terms of breaking a lease mid way through, many tenants find they can reach a deal with the landlord to do this. Since the landlord knows the alternative for many tenants is for them to simply break the lease and leave, and have the landlord go through cost and hassle to sue them in small claims court to try and recover any payments/damages.
In a fixed term lease you can also assign the lease for someone else to take it over, though ease of this will depend on your rent vs market rate at the time.
Deal Guru
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Mar 23, 2008
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Edmonton
MikeKellyRealty wrote: Theoretically they always have the option to evict for personal use, and they can raise rent once per year. Negotiate with the landlord for a decreased rent in exchange for signing a new lease as you aren’t required to sign a new lease, and explicitly put it in the contract that you’re able to terminate the lease at any point before the 1 year mark, with 60 days notice and no penalties. Otherwise there is no point in locking yourself into a new lease for a year
Are you saying that the landlord can evict for personal use even in the middle of a one year lease? News to me...

C
Newbie
Apr 6, 2020
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Toronto
Yea sorry, as long as it’s after the last day of the fixed term and with 60 days notice
GTA Real Estate Agent
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Nov 26, 2003
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Unless there is a reduction in rent, there is zero advantage to you in signing a new lease, and I would strongly advise against it.

Just tell the landlord thanks but no thanks, and you'll be remaining month-to-month per the RTA.
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Jan 2, 2012
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camzie wrote: Unless there is a reduction in rent, there is zero advantage to you in signing a new lease, and I would strongly advise against it.

Just tell the landlord thanks but no thanks, and you'll be remaining month-to-month per the RTA.
Having a lease is a huge advantage for a tenant, since it prohibits the landlord evicting them for personal use while lease is in effect. Having a fixed term lease heavily favours the tenant over the landlord, since it's so easy for tenants to get out of them while landlords will be bound by it.
[OP]
Newbie
Jul 24, 2010
75 posts
9 upvotes
Ontario
Thanks for your responses everyone. My gut feel is that signing a new lease at this point, even with a 60-day termination clause, would be a bad idea. I understand that the tenant is favored, however, I don't have the time or energy to "fight" if it comes to that.

The fact that the clause would likely be invalid is a sticking point.

Ultimately we don't want to stay here longer than we need to, and potentially being on the hook for the remaining term of the lease without a fight is not something I'm willing to take on. Nor am I willing to try to find someone to assign the lease to, I'm not in the business of finding tenants for a landlord, that's their job and the reason I am not a landlord myself.

The only possible reason I can think of that they would want a lease with a 60-day termination clause (if it were valid, in which case what's the difference??) would be if it makes a difference in a mortgage renewal. But, as a tenant, that's not my problem.

Finding a place to live for a couple of months would be a pain in the arse but I suppose I'd rather do that than be on the hook of another year-long lease.
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Dec 6, 2006
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rob444 wrote: Having a lease is a huge advantage for a tenant, since it prohibits the landlord evicting them for personal use while lease is in effect. Having a fixed term lease heavily favours the tenant over the landlord, since it's so easy for tenants to get out of them while landlords will be bound by it.
http://www.sjto.gov.on.ca/documents/ltb ... 20Use.html

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