Renting your first apartment can be an exciting time. It used to be automatic that you would sign a one-year lease, but it may be better for landlords and tenants to consider monthly leases instead.
Traditionally, landlords wanted tenants to sign a one-year lease as a sign of a commitment, so the tenant would not be tempted to break the lease early. It gave the landlord a sense of comfort. Tenants also appreciated this sense of security — they could not be evicted as long as they paid the rent on time and behaved themselves.
Times have changed. When you consider how the law operates, both landlords and tenants may reconsider.
For landlords, it is far more important to properly qualify your tenant. If your tenant subsequently defaults or breaks the lease early, you won’t collect anything anyway. In addition, a landlord has a legal obligation to try and reduce their damages by re-renting their unit, so it is unlikely you will be able to sue the tenant for anything more than the months the unit remained empty.
If it is a monthly tenancy, landlords also have the advantage of terminating the tenancy at any time — upon 60 days’ notice — if they want to move into the unit themselves or have a family member move in.
For tenants, unless it is a house or condominium, you should also consider monthly tenancies. In a larger apartment building, it is unlikely a landlord will be able to terminate your lease for family reasons. Therefore, as long as you pay your rent on time and behave yourself, you can stay as long as you want. In addition, if you ever want to leave, whether to buy your first home or move to another apartment, you will only have to give the landlord 60 days’ notice.
However, if you are renting a house or condominium, you may want the security of a one-year lease, as there is a real possibility the landlord may try to evict you if they want the property for their own use.
Other tips for first-time tenants:
• The landlord can only ask for the last month’s rent in advance; no other security or furniture deposits.
• The landlord can ask for post-dated cheques, but cannot demand them.
• You can find out all of your rights as a tenant at the Landlord and Tenant Board website at www.ltb.gov.on.ca.
One-year leases used to be the standard for residential landlords and tenants. It may not be the right option for you. Understand your rights before you sign any residential lease and you will benefit in the long term.
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Mark Weisleder is a lawyer, columnist, author and speaker to the real estate industry. You can contact Mark at email@example.com
Source: moneyville.ca via email from Mark Weisleder