Thinking of renting your property? You can only request first and last months’ rent and a key deposit.
Fri., March 20, 2020. By Joseph RicherRegistrar, Real Estate Council of Ontario
I recently purchased a property close to a university and hired a real estate professional to find me a tenant. If I rent it to an international student, since they have no credit history, can I request additional deposit monies or extra pre-paid rent?
This a very good question. In short, the answer is no, you cannot ask for a larger deposit because the renter is not a Canadian resident. Many people are surprised to learn that, in fact, the only deposits a landlord can request are the first and last month’s rent, and a refundable key deposit. Landlords are also not permitted to charge tenants a fee to rent a property or hold a damage deposit.
Rental and temporary housing is common near post-secondary institutions. As housing demand — and rental rates — rise, we are seeing more property owners hiring real estate professionals to source potential tenants. Many of these property owners have never been a landlord or rental property owner in the past. There are several legal requirements and rules that should be considered in advance of renting out a property.
Hiring a real estate rep to provide their expertise in preparing an agreement, and marketing a property for rent, can be helpful to both seasoned rental property owners and those new to the process. Often real estate pros have a vast network of buyers, sellers, renters — and some who may actively be looking for a rental. They can also tap into their networks with peers who represent people looking to rent.
I also encourage property owners to hire a real estate lawyer to provide counsel regarding legal obligations and necessary paperwork.
When hiring a real estate professional to find tenants, it is important to remember that their obligation usually ends once a lease or occupancy agreement is finalized. Therefore, from the time your tenants move into your rental property, through the duration of their tenancy, you are responsible for upholding your duties and responsibilities as the landlord and property owner.
As Registrar for the Real Estate Council of Ontario (RECO), I can speak only to the legislation that governs the conduct of real estate salespersons, brokers and brokerages in Ontario — the Real Estate and Business Brokers Act, 2002 (REBBA 2002). If you are a property owner who is, or is considering, renting out a property, it is important that you review and understand your rights and obligations under Ontario’s Residential Tenancies Act. It may also be a good idea to speak with a lawyer.
Rental rules and regulation exist to protect property owners and tenants alike — both parties should exercise due diligence prior to entering into any contractual agreement. If you are working with a salesperson, you should agree to what will done and what will not be done, to avoid misunderstandings during and after the process is over.