posted April 27, 2023

When you rent out your property, you need to have a solid lease that clearly outlines the terms of the lease, including when the lease term will end. Usually, tenants will stay until the end of the lease or even renew their lease for another year.

However, sometimes a tenant breaks a lease early in Ontario which means they break it before the rental period ends. As a landlord in Ontario, knowing the rules and regulations related to breaking a tenancy agreement is crucial in order to know your rights and your tenants’ rights, and to stay in compliance with the law.

This article outlines the legal process for handling tenants who break a tenancy agreement early, as well as the justified and unjustified reasons for early tenancy terminations.

Rental Agreements in Ontario

A clear rental agreement is crucial if you want to rent out your rental property in Ontario. The rental agreement should include the consequences and penalties for breaking tenancy agreements. Landlords should also include the justifiable reasons for legally breaking a lease. 

You also need to include how many days’ notice is needed if the tenant decides to end their lease early, and if there are other options for tenants to end the lease early. In Ontario, tenants have two options if they decide to end their lease early:

Three people looking over a document together

  • Notify the landlord: The tenants need to notify you if they want to end their lease and inform you when they plan to move out of the rental unit, or what is the last day of their stay. Ontario tenants must provide the following notices depending of if it's a fixed-term tenancy agreement or not:
    • 60 days’ notice: For a fixed-term tenancy and month-to-month leases.
    • 28 days’ notice: For a non-fixed term tenancy, including week-to-week lease and daily rent.
  • Enter into a mutual agreement with you: The tenant also has the option to enter into a mutual agreement with you to terminate a lease, and both should agree on a date when the lease should be terminated.

Although there is no statute in Ontario landlord-tenant law that requires landlords to re-rent the property when tenants break a lease, the rental agreement should also include your responsibility as a landlord to re-rent the rental unit.

Lastly, a clear rental agreement should indicate the rights of the renters to sublet the rental unit to other tenants.

Ontario tenants can assign or sublet the rental unit to other renters with proper approval from the landlord. In Ontario, subletting means the tenant is only moving out temporarily and will return before the lease term ends. The sublease will have the same terms as the original lease. 

Assigning a lease to another tenant means that the original tenant is moving out permanently. The assignee will completely take over the lease after they move in. The lease will also have the same terms as the original lease terms with the previous tenant.

Living room with a white couch

While your tenant needs to get your permission for the subletting or assigning the lease, you are prohibited from declining the request without justifiable reasons. You have the right to charge the tenant the costs for performing a new tenant screening and background checks for the assignee.

Unjustified Reasons to Break a Lease

In Ontario, there is no specific list of unjustified reasons for breaking a lease. In general, anything that is not mentioned under the justifiable reasons for legally breaking a lease may be deemed unjustifiable.

Justified Reasons to Break a Lease in Ontario

Landlords in Ontario must be aware that the renters have a right to break a lease early provided they have valid and legal reasons for doing so. Such reasons include:

1. You Have an Agreement with Your Tenant to Break the Lease

You and your renters may agree to end the tenancy early before a lease expires. Although an oral agreement may usually suffice, it is recommended to put everything in writing and have a document that both parties can sign. The agreement should indicate the last day of the tenancy and when the tenant will move out of the property. 

After both parties agree and the agreement is signed, the tenant must move out of the rental unit on the agreed date. If the tenant decides to stay, you must have another agreement for the extension. Otherwise, you need to seek legal help from the Ontario Landlord Tenant Board and apply for eviction.

Two empty cardboard boxes sitting on a console table

2. You Agree to a Sublease of Assignment

If you allow the tenant to sublet or assign the tenancy to another renter, this is another justifiable reason for breaking the lease early. As the landlord, you reserve the right to accept or refuse the sublet or assignment request. However, note that you cannot deny the request without valid reasons. 

Keep in mind that if you fail to respond to the tenant’s request to assign or sublet the rental property to another person after seven days, or you reject the new assignment unreasonably, the tenant may issue you a Notice to End the Tenancy (Form N9). They need to issue this notice within 30 days after the date the request to sublet or assign the unit was made.

3. The Tenant Is a Victim of Domestic Violence or Abuse

Ontario renters who are victims of sexual or domestic violence, sexual assault, or physical abuse, may also be allowed to terminate their lease early. The tenant is required to give you notice at least 28 days before the move-out date. Other than the notice, you may also require your tenant to provide you with a copy of a peace bond or restraining order in case of sexual or domestic violence.

Real estate agent talking to a couple

4. The Landlord Violates the Lease 

If the landlord fails to honor the terms of the lease, the renters have the right to pre-terminate the tenancy. The following are considered landlord violations:

  • Failing to maintain the habitability standards of the property.
  • Unlawfully entering the rental unit without proper notice.
  • Unreasonably refused the sublet request from the tenants.
  • Changing the locks without providing keys to the tenants.
  • Failing to provide essential rental services.

Conclusion

Being aware of the legal procedure for breaking a lease is crucial to ensure that you stay in compliance with the law. You should also be aware of things such as the residential tenancies act. If you have more questions, you should consider working with a professional property manager who understands the relevant local laws. Contact Rent In Ottawa Property Management and we'll gladly assist you.

Disclaimer: This blog isn’t intended to be a substitute for professional legal advice. Laws change and this information may become obsolete at the time you read it. For further help, please get in touch with a qualified attorney or an experienced property management company.