Landlords and Tenants in Ontario are required to abide by the Residential Tenancies Act (the “RTA”). The RTA sets out all of the rules and regulations that landlords (and tenants) of residential properties must follow. If either a landlord or tenant violates the RTA’s rules and/or regulations, the violation may be considered illegal and could result in penalties and/or legal action. Scamming a tenant is definitely a violation of the RTA. The following are some scams that tenants should beware of:

Misrepresenting the property:  Landlords may not advertise the property as being in a better condition than it actually is. They may use old pictures or show a renovated unit that is not actually the one being rented out, or they may advertise that the property includes such amenities as a swimming pool or a sauna, but once the tenant moves in, he or she may find that these amenities are not operational.

Charging illegal fees:  Landlords may not require potential tenants to pay fees that are not allowed under the Residential Tenancies Act. Landlord can require a tenant to pay a deposit for the last month’s rent, which must be applied to the rent for the last period of the tenancy. This is a rent deposit, not a security deposit. Security deposits are not allowed in Ontario. The only other kind of deposit a landlord can require a tenant to pay is a refundable deposit for key(s), remote entry devices or cards. This deposit must be returned to the tenant at the end of the tenancy when the tenant returns their key(s) and remote entry devices or cards. Tenants in Ontario are not required to provide any other form of deposit; for example, a pet or a damage deposit. Generally, landlords are not allowed to charge tenants additional fees or charges above rent. 

If the landlord charges a rent deposit, it must be held and used to cover the tenant’s last month’s rent. Each time the rent increases, the landlord can require the tenant to top-up their last month’s rent deposit to the new amount. However, landlords are also required to pay the tenant interest on the rent deposit after every year. The landlord can use the interest on the rent deposit to top-up the rent deposit.

Discriminating Against Tenants:  Landlords may not discriminate against potential tenants based on their race, religion, gender, or other protected grounds.

Failing to Maintain the Property:  Landlords may not neglect their responsibilities to maintain the property in a habitable condition, or create unsafe or unhealthy living conditions for tenants.

Failing to Disclose Important Information:  Landlords are required to disclose important information about the rental unit and any potential issues; such as, bed bugs or previous water damage. If a landlord fails to disclose this information, depending on the severity of the issue, the landlord may be required to compensate the tenant, or the tenant may be allowed to terminate the tenancy.

Illegal Rent Increases:  The Ontario government sets the rent guideline. This is the maximum percentage Landlords can raise a tenant’s rent by without obtaining approval from the Landlord and Tenant Board. If a landlord tries to raise the rent beyond the guideline for that year, that is definitely a scam. However, it is important to note that certain units are exempt from rent control. The Residential Tenancies Act sets out two types of exempt rental units:

The first type of units that are exempt include rental units that are located in a building, mobile home park, or land lease community, no part of which was occupied for residential purposes on or before November 15, 2018. This exemption also includes rental units that are located in an addition to a building, mobile home park, or land lease community, and no part of the addition was occupied for residential purposes on or before November 15, 2018.

The second type of exempt units are rental units located in detached houses, semi-detached houses, or row houses which, on or at any time before November 15, 2018, contained not more than two residential units.

The rental unit must meet all of the following requirements:

  • The unit has its own bathroom and kitchen facilities.
  • The unit has one or more exterior or interior entrances.
  • At each entrance, the unit has a door which is equipped so that it can be secured from the inside of the unit.
  • At least one door described above is capable of being locked from the outside of the unit.
  • The rental unit became a residential unit described above after November 15, 2018.
  • One or both of the following circumstances apply:
    1. At the time the rental unit was first occupied as a residential unit described above, the owner. or one of the owners, as applicable, lived in another residential unit in the detached house, semi-detached house, or row house.
    2. The rental unit is located in a part of the detached house, semi-detached house, or row house which was unfinished space immediately before the rental unit became a residential unit described above.

Rental Fraud:  In the worst case (and fortunately, quite rare) scenario, a “landlord” advertises a property for rent, accepts first and last month’s rent, but then does not allow the tenant to move in.

Tenants should also watch out for any warning signs or suspicious behaviour from potential landlords such as rushing the tenant to sign a lease, not providing a lease agreement or asking for personal information that is not relevant to the rental application process.

It is important for tenants to know their rights and to research the landlord and the property before entering into a tenancy agreement. The Ontario government’s website has resources for tenants and landlords to help prevent and address these types of scams.

Please note these materials have been prepared for general information purposes only and do not constitute legal advice. Readers are advised to seek legal advice by contacting Frank Feldman* regarding any specific legal issues.

Call the Real Estate Law Experts at Frank Feldman Law Today!


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