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Please Release Me, Let Me Go (Early Lease Termination)

Lease Termination Tips

You just found the perfect home.  You weren’t planning on buying yet.  In fact you thought you’d start seriously looking next spring.  But a house just came up for sale in your neighbourhood near the park that you love and you really, really want to make an offer.  The only problem is you have 9 more months left on your lease.  Do you let the house go?  Not necessarily.

A contract is a contract, usually.  In a commercial lease you would be at the mercy of your landlord.  However, the provisions of the Ontario Residential Tenancies Act override many of the terms of a residential lease, including those relating to early lease termination.  It’s not just a simple matter of sending your landlord a good bye letter and moving out, but if the rules of the Act are followed correctly you may be able to terminate your lease early without any negative impact on your wallet, credit score or reputation.

Lease termination

Step 1 – Talk to Your Landlord

Before delving into your legal rights under the legislation try a simple approach: just ask.  You may not feel this is an option if you and your landlord aren’t on good terms but otherwise it may be worth a shot.  You needn’t provide any written notice at this point or commit to a lease termination date.  Just tell him or her your plans and you may be able to come to an agreement that works for both of you.  If it is a desirable unit that will rent easily the landlord may even view your departure as an opportunity to increase the rent.  If you do come to an agreement make sure you get it in writing.  Even the best relationships are prone to misunderstandings.

Step 2 – Find a New Tenant or Subtenant Yourself

If your chat with the landlord doesn’t go well, or if they are receptive but don’t want to undertake the work involved in looking for a new tenant, the Residential Tenancies Act gives you the right to assign or your lease or sublet your apartment to a new tenant.  The advantage of an assignment is that the new tenant will step into your shoes as tenant under the lease and you will be released from any further obligation to the landlord.  On the other hand if you sublet your apartment, the subtenant will pay you rent but you will still be responsible to the landlord under your lease.

In either case you must give your landlord the minimum advance written notice of your intentions as required by the Act.   Failure to do so may invalidate your proposed assignment or sublease or may at the very least put you back a month or two.  You will also need the Landlord’s consent for an assignment or sublease but this consent cannot be arbitrarily or unreasonably withheld.  If you feel that the landlord is acting unreasonably, you can apply to the Landlord and Tenant Board for an order ending the tenancy agreement early.

However you wish to proceed, it is always a good idea to talk to a lawyer first.  In order to rely on the rules you must ensure that you follow them, and the requirements of the Residential Tenancies Act, like most statutes, are not always clear to the untrained eye.

For further information the Landlord and Tenant Board website is a helpful resource.

Happy house hunting.

Check out John’s blog at www.centum.ca/john_smith/john_smith/Blog

 

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About the Author

John Freeland Smith (AMP, LL.B., B.Mus.) (lic. M08000041) is the Principal Mortgage Broker at CENTUM Freeland Mortgage Group Inc. in Toronto (lic. 11974) where he arranges residential and commercial mortgages for his clients. John also has a background in real estate law, with over 10 years’ experience in both private practice and as in-house counsel to one of Canada’s largest real estate developers. John is always happy to chat about mortgages and real estate and can be reached at: 416-699-5149; john_smith@centum.ca; www.centum.ca/john_smith;