Introduction: Why the Ontario Lease Agreement Is the Landlord’s Best Tool
Every successful tenancy in Ontario begins with a strong Ontario lease agreement — the legal framework that defines expectations, protects investments, and sets the tone for a professional landlord-tenant relationship.
At AVS Hospitality, we’ve managed everything from single-unit rentals to multiplexes and student housing portfolios across Toronto, Mississauga, Brampton, and Peterborough. Over the years, we’ve seen the difference a well-drafted lease makes — and how a poorly written one can lead to disputes, unpaid rent, and unnecessary stress.
This comprehensive guide will walk you through everything included in an Ontario lease agreement, common pitfalls, and real-world case studies from our management portfolio.
1️⃣ Understanding the Legal Foundation: The Residential Tenancies Act (RTA)
Every Ontario lease agreement is governed by the Residential Tenancies Act, 2006 (RTA), the legislation that regulates landlord-tenant relationships.
📘 Reference: Residential Tenancies Act – Ontario Laws
Key Principles of the RTA
Landlords must maintain the property in good repair and comply with health, safety, and housing standards.
Tenants are protected from unlawful eviction or sudden rent hikes.
Any term in a lease that contradicts the RTA is automatically void.
💡 Pro Tip: Even a “handshake lease” is bound by the RTA. Always use a written Ontario lease agreement to protect yourself and your tenant.
2️⃣ The Ontario Standard Lease: What It Covers
Since April 30, 2018, the province mandates that landlords use the Standard Lease Form (Form 2229).
📎 Download here: Residential Tenancy Agreement (Form 2229)
The Ontario lease agreement template ensures all parties have the same baseline understanding of rights and obligations.
Main Sections
Names and contact info of landlord and tenant
Rental address and term (fixed or month-to-month)
Rent amount, payment date, and deposit details
Services included (utilities, internet, parking, etc.)
Maintenance responsibilities and conditions
Rules about pets, smoking, and guests
Signature and lease start date
📘 Government Guide: Ontario’s Standard Lease Explained
If a landlord doesn’t use this form, tenants can withhold rent until it’s provided.
3️⃣ Types of Ontario Lease Agreements
Leases vary based on how long they last and how flexible the arrangement is.
Fixed-Term Lease
Lasts a set period (often 12 months).
Rent and terms remain fixed during that time.
Automatically renews as a month-to-month lease if no new term is signed.
Termination before expiry requires mutual consent or legal justification.
Month-to-Month Lease
Continues indefinitely until notice is given.
Tenants can terminate with 60 days’ written notice.
Landlords can end the lease only for reasons allowed by the RTA.
Rent increases allowed once every 12 months, per Ontario’s Rent Guideline.
4️⃣ Security Deposits and Rent Rules
Under the RTA, landlords may only collect one deposit, equivalent to one month’s rent, applied to the last rental period.
No “damage deposits” are allowed.
Interest must be paid annually at the guideline rate.
Rent receipts must be issued upon request.
📘 Reference: Ontario Rent Rules
💡 Case Study – “The Deposit Dispute”:
At one AVS-managed property in Toronto, a landlord inherited tenants with an old lease demanding a $300 “key deposit.” This violated RTA rules. We rewrote the Ontario lease agreement properly, refunded the illegal portion, and avoided an LTB fine — a reminder that even small errors can be costly.
5️⃣ Maintenance and Repairs in the Lease
An Ontario lease agreement must clarify maintenance responsibilities.
Landlords must:
Keep plumbing, heating, and electrical systems in good condition.
Provide pest control if infestations occur.
Ensure common areas are safe and clean.
Tenants must:
Maintain cleanliness and avoid damage.
Report repair issues promptly.
Follow building rules regarding waste and common areas.
💡 Case Study – “The Roof Leak Issue”:
One Brampton tenant didn’t report a small ceiling leak for three months. When the ceiling collapsed, the insurance claim was denied due to neglect. Afterward, we amended our Ontario lease agreement templates to require written reporting of any maintenance issue within 48 hours.
6️⃣ Lease Assignment and Subletting
Tenants can’t just pass on their lease — the law sets clear procedures.
Lease Assignment
Tenant transfers their lease entirely to a new person.
Landlord consent required, but cannot be unreasonably refused.
Once assigned, the original tenant’s obligations end.
📘 Assignment of Leases – Ontario Law
Sublease
The tenant temporarily rents to another occupant.
The original tenant remains liable for rent and damages.
Landlord must still provide written consent.
📎 Sublease Template – LawDepot
💡 Case Study – “The Student Sublet”:
A tenant at one of our sixplexes in Waterloo sublet her unit to two friends for the summer without notifying us. When damage occurred, the original tenant remained responsible. Since then, our Ontario lease agreements require explicit sublet disclosure — and it’s reduced damages by 80%.
7️⃣ Termination Rules and Notices
Ending a lease is straightforward when the right forms are used.
Tenant Termination
Fixed-term: 60 days’ written notice before end date.
Month-to-month: 60 days’ notice anytime.
📎 Form N9 – Notice to End Tenancy by Tenant
Landlord Termination
Can only occur for legal reasons, such as:
Non-payment of rent (Form N4)
Landlord/family use (Form N12)
Major repairs/demolition (Form N13)
Landlords must act in good faith and follow timelines strictly.
💡 Case Study – “The Personal Use Claim”:
At a Mississauga duplex, a landlord issued an N12 claiming “family use,” but then relisted the unit. We intervened, educated the owner, and rewrote the Ontario lease agreement to prevent abuse — saving them from a potential $25,000 bad-faith penalty.
8️⃣ Breaking a Lease Early
Tenants sometimes need to leave before a term ends.
If a tenant breaks a lease without assignment or consent:
They owe rent until a replacement tenant is found.
The landlord must mitigate losses by advertising the unit.
Deposits can be applied toward unpaid rent.
If the landlord breaks the lease:
Tenants may claim compensation or file with the LTB.
📘 Landlord and Tenant Board – Ontario Tribunals
💡 Pro Tip: Include an “Early Termination” clause in your Ontario lease agreement outlining acceptable conditions (e.g., job relocation, home purchase).
9️⃣ Pet Policies and Smoking Clauses
The RTA prohibits landlords from enforcing “no pet” clauses, but damage caused by pets can be recovered.
Smoking restrictions depend on the lease and building rules. Many landlords now include “no smoking or vaping” clauses to reduce insurance risks.
💡 Case Study – “The Smoke Complaint”:
In a Scarborough triplex, cigarette odor from one tenant caused another to break their lease early. Our revised Ontario lease agreement now includes clear rules on smoking areas and ventilation — keeping peace and avoiding tenant turnover.
🔟 Utilities, Parking & Internet in the Lease
A good Ontario lease agreement details exactly what’s included in the rent.
Common inclusions:
Hydro, gas, water, Wi-Fi
Garbage collection and snow removal
One parking spot per tenant
If utilities are separately metered, the lease must specify how tenants will pay.
💡 Case Study – “The Hydro Confusion”:
At a duplex we took over in Etobicoke, two tenants shared one hydro meter. The previous lease was silent on cost allocation. After disputes, we rewrote the Ontario lease agreement to include a cost-sharing clause with photos of meter readings — ending billing confusion permanently.
11️⃣ Insurance and Liability Clauses
While Ontario law doesn’t mandate tenant insurance, landlords should include it in their lease.
Why Include Insurance
Protects against water or fire damage caused by tenants.
Prevents disputes over personal property losses.
Adds an extra layer of financial protection for both parties.
AVS Hospitality’s Ontario lease agreements always require proof of tenant insurance within 10 days of move-in — and it’s helped avoid over a dozen claims disputes since 2023.
12️⃣ The Role of Professional Property Management
Even the best Ontario lease agreement needs active oversight.
At AVS Hospitality, we manage hundreds of units across the GTA, handling everything from lease drafting and renewals to inspections and LTB compliance.
Our Lease Management Services
Professional drafting of each Ontario lease agreement
Tenant screening (credit, employment, references)
Rent collection & e-transfer setup
24/7 emergency maintenance
LTB representation and legal compliance
👉 Learn more: AVS Hospitality Property Management Services
💡 Case Study – “The Rent Recovery”:
In 2024, one landlord hired AVS after six months of missed rent. We reviewed the lease — it was missing key enforcement clauses. After rewriting the Ontario lease agreement and restructuring payment tracking, rent recovery reached 100% within three months.
Conclusion: A Strong Ontario Lease Agreement = A Strong Investment
A solid Ontario lease agreement is your best defense against costly disputes, non-payment, and misunderstandings.
By using the Standard Lease Form, following the Residential Tenancies Act, and clearly defining maintenance, utilities, and assignment clauses, landlords can operate confidently and legally.
At AVS Hospitality, we don’t just manage properties — we craft smart, protective lease frameworks that help you scale your portfolio safely.
Get in Touch
📞 Call: 647-294-5111
📧 Email: contact@avshospitality.ca
📲 Instagram: @avs_hospitality
▶️ YouTube: AVS Hospitality Channel
👉 Website: AVS Hospitality
