# Tenant Breaks Lease Prior to Moving In



## ShawnTH (Apr 9, 2011)

I have signed a one year lease with a student in April for August 1st occupancy. This is a room in a 2 BD Condo with separate washroom, access to unit common areas, condo amenities etc, shared with my daughter. The student has provided the last month's rent up front. I just received notice that the students circumstances have changed and she would like to break the lease, prior to moving in. 

What are my legal obligations to the tenant in this case? Is a full refund required or are there grounds for retaining a portion of the deposit for re-listing etc?


----------



## Just a Guy (Mar 27, 2012)

You know it's landlords like this which got the extremely tenant biased laws passed in Ontario in the first place.

The fact that you feel entitled to anything in these circumstances, where you suffer no real loss, is rediculous. Had landlords like this not constantly tried to screw people for money, the government would have had no grounds to write legislation as unfriendly as they did.

No, to answer your question, in Ontario you can't keep any of the money, in fact you may be required to pay interest on the money. In other provinces you may have been able to keep some legally, but morally you shouldn't either, listing a place is a "cost of doing business", you suffered no financial loss.


----------



## ShawnTH (Apr 9, 2011)

Just a Guy said:


> No, to answer your question, in Ontario you can't keep any of the money, in fact you may be required to pay interest on the money. In other provinces you may have been able to keep some legally, but morally you shouldn't either, listing a place is a "cost of doing business", you suffered no financial loss.


Thanks for this portion of your reply, it is helpful.

Regarding the first portion of your reply, my question (_as a non professional landlord_) was "What are my legal obligations", not how can I screw over the tenant.

Regards,


----------



## Just a Guy (Mar 27, 2012)

My response, while in regard to your question, was not directly Targeted at you, but rather people who abused tenants and give landlords a bad name. However the fact that common sense (no need to be a professional landlord here in my opinion) didn't kick in and say "I should just return the money" did play a role in my frustration in the response.


----------



## Mukhang pera (Feb 26, 2016)

Just a Guy said:


> You know it's landlords like this which got the extremely tenant biased laws passed in Ontario in the first place.
> 
> The fact that you feel entitled to anything in these circumstances, where you suffer no real loss, is rediculous. Had landlords like this not constantly tried to screw people for money, the government would have had no grounds to write legislation as unfriendly as they did.
> 
> No, to answer your question, in Ontario you can't keep any of the money, in fact you may be required to pay interest on the money. In other provinces you may have been able to keep some legally, but morally you shouldn't either, listing a place is a "cost of doing business", you suffered no financial loss.


I find myself in respectful disagreement with JAG. If Shawn paid for advertising plus some costs associated with showing the place, and then he found a tenant who now wants out, I would say there is a loss, albeit perhaps modest. Advertising/showing costs presumably must again be incurred. Because August is still a ways off, probably a new tenant can be found, so loss of rent might not be an issue. But, I have no idea of the market in question. Maybe it will take a prodigious effort to re-let. Maybe the price will have to be dropped. Maybe the L/L will have to agree to a tenancy starting in September. Lots of unknowns.

In short, I do not see a clear case of tenant abuse at the hands of a greedy overreaching L/L; not at first blush. Frankly, I am surprised by JAG's comment that Ontario law would not allow some costs to be passed on to a tenant guilty of breach - or anticipatory breach - of contract in such circumstances. Indeed, small wonder he calls Ontario residential tenancy law "extremely tenant biased". 

The foregoing comments are premised, in part, on an assumption that we are talking about a "tenancy" to begin with. The OP spoke of a case of shared occupancy with his daughter. A hallmark of a tenancy is a right of "exclusive occupancy" or "exclusive possession". That indicator appears to be absent in this case. Sounds more like case of a residential licensee than a tenancy situation which, in at least some jurisdictions, would leave a landlord tenant tribunal with no authority over the matter.


----------



## RCB (Jan 11, 2014)

I also am surprised by JAG's response. This is a business, is it not?

First, you don't fall under the RTA if the unit is in Ontario, as you describe your child sharing a kitchen with this tenant. That means no LTB. That means good old contract law. (Even IF you fell under the RTA, you are eligible for expenses to rerent the room, and rent for 2 months if unable to rent it for that period after a good faith effort.)

In my situation of renting to students by the room (under the RTA), I have been where you are. I tell the student that I will make an all-out effort to find a *suitable* replacement tenant for that month (or months), but if I am unable to find such a tenant, their deposit it forfeited to cover the rent for that period and related expenses, such as re-advertising.

You can work from the following:

1. You cannot receive double rent for the same unit for the same period. If you rent it for August to another, the first one gets the deposit back, less your further advertising expenses.

2. The replacement tenant must be as acceptable to you as the first, you are not required to take just anyone.

3. If you are unable, after a good faith effort, to find a suitable tenant for August, the first tenant loses the deposit as rent for August.

This all stands up under LTB scrutiny and under the RTA. You fall under contract law, which is far more beneficial to landlords, as it is less restrictive.

I deal with this frequently with students. Whoops, I changed my mind. Well, I tell them, this is how the law works. It happens often, some change their minds as often as they change their clothes. I've been taken before the LTB on this type of issue (short notice to move, wanted 2 months of rent back when I couldn't find an appropriate tenant in time), and I won easily. Documentation and following the law.


----------



## Ag Driver (Dec 13, 2012)

I rent rooms in my owner occupied house. It is one unit, with shared everything. I do not fall under the act.

In my agreement, I hold last months rent plus damage deposit to secure the agreement. If you break the agreement, this is non-refundable. On day one of moving in you pay first months rent and the damage deposit is back to being refundable. 

If I hold a room for someone, I am no longer advertising for the room and I am expecting them to fufil their side of the agreement. If they fail to uphold the agreement I can potentially lose an entire semester as students typically have already found suitable accommodations by the time moving day arrives. The reason I now have a non-refundable deposit to hold the room is for this EXACT scenario. In the past, I have held a room 4 months in advance for a student (no cash hold). I was turning down potential renters stating that the room was rent. She bailed 2 weeks prior to moving in, and I lost out on an entire semester as there was no longer any interest once the semester was under way.

I will continue to have a non-refundable hold. Put your money where your mouth is.


----------



## ShawnTH (Apr 9, 2011)

Thanks Mukhang pera, if there is a loss, I am anticipating that it would be only a modest one.

The unit in a condo is primarily for use by my daughter while she attends college, and is in a good location (West Toronto). The intent is to offset some of the costs of ownership with a tenant / roomie. There were other interested candidates which we skipped over based on the "fit" with the prospective tenant. We had originally listed the property for a May 1st occupancy, but based on the "fit" with the prospective tenant, we opted to adjust the occupancy out to August 1st.

Also, thanks to RCB. You offer some excellent advice. I will modify the lease agreement with your "lessons learned", and let the tenant know how I intent to proceed.

Ag Driver, I also like your clause. I would have liked to cover the summer season with a tenant, but don't anticipate having an issue in getting another tenant for August. I don't believe I am permitted to ask for a damage deposit, according to Ontario regulations.

Thanks again to all for your advice!


----------



## RCB (Jan 11, 2014)

ShawnTH, if your child is sharing either a bathroom or a kitchen with the tenant, then you are not regulated under Ontario's Residential Tenancies Act. It is the RTA which states landlords cannot receive a damage deposit. As you are not regulated under the RTA, you are legally able to require a damage deposit. In fact, if you wish to require the whole semester's rent in advance of occupancy, or even whole school year's rent, you are able to do so.


----------



## Ag Driver (Dec 13, 2012)

RCB said:


> ... you are not regulated under Ontario's Residential Tenancies Act. It is the RTA which states landlords cannot receive a damage deposit. As you are not regulated under the RTA, you are legally able to require a damage deposit.


Exactly. 

However, we do have to check in with local by-laws as they may require a license. According to my bylaw I can have up to 4 lodgers before needing a license.


----------



## Letran (Apr 7, 2014)

As others have pointed out. The real loss is that it will be harder NOW, when most students have already signed up and made arrangements for accommodations. Not impossible but applications will be slim pickings


----------



## Spudd (Oct 11, 2011)

Letran said:


> As others have pointed out. The real loss is that it will be harder NOW, when most students have already signed up and made arrangements for accommodations. Not impossible but applications will be slim pickings


Well, normally you have to give 2 months notice when vacating an apartment, so as a student, I always started looking 2 months before Sept 1, aka July 1. I doubt most students already have their places lined up. 

It may even be a blessing in disguise if they can find a tenant who wants to move in earlier than Aug 1.


----------



## RCB (Jan 11, 2014)

My experience is that most first year students wait until late July or well into August to begin looking for housing. This may be because many are on waiting lists for on-campus housing, and finally learn there's no hope of securing a spot. It may also be because they've finally selected a school because the deadline for tuition deposit has passed, and they've been forced to commit.

Returning students, usually more mature and more desirable tenants, usually begin looking in February or March. Again, my experience. YMMV


----------



## Ag Driver (Dec 13, 2012)

RCB said:


> Returning students, usually more mature and more desirable tenants, usually begin looking in February or March. Again, my experience. YMMV


This has been my experience as well. This is why I have no issues holding rooms so far in advance when it is secured with a non refundable deposit. 

The only time I have had a someone bail was a first year student, and the only eviction I have had was a first year student as well. Never again. Post grads and professionals only from then on.


----------



## RCB (Jan 11, 2014)

One bail and one eviction myself, also both first year students, and both in my first year of renting. Perhaps it only takes one in each situation before we alter the way we do business.


----------

