Thinking of Becoming a Landlord? Here’s What You Need to Know
As a top Milton real estate agent, with a team that facilitates over 100 leases annually, we’re well-versed in this segment of the real estate industry. I would love to offer some of my insights to help prospective and existing landlords with their real estate investments.
We get questions from landlords all the time, and there’s a lot of misinformation out there, such as whether or not you can evict a tenant to sell your investment property. Owning an income property can be a smart financial move—offering passive income, long-term wealth-building, and the potential for property appreciation. But being a landlord isn’t just about collecting rent. It comes with legal responsibilities and real-world challenges.
Here are four essential things you must know as a landlord in Ontario.
1. What documents must a Landlord provide a Tenant in Ontario?
- Residential Tenancy ACT
- Condo By-Laws, and Rules and Regulations
- Ontario Standard Form of Lease
Residential Tenancy Act (RTA):
Before your tenant moves in, you are legally required to provide them with a copy of the RTA. You can do this by giving them a printed copy or sharing a digital link—but you must get confirmation of receipt.
The RTA outlines the rights and responsibilities of both landlords and tenants. Failing to provide this can create unnecessary disputes and misunderstandings down the line.
Condo Bylaws and Regulations (If You’re Renting a Condo)
Renting out a condo unit is a bit different from leasing a house or apartment. In addition to the RTA, condo tenants must also follow the rules set out by the condominium corporation, including bylaws and regulations.
What do Condo Bylaws and Rules and Regulations Outline?
- Pet restrictions
- Parking
- Noise regulations
- Balcony use
- Minimum lease periods
- And more …
As the landlord, it’s your duty to provide your tenant with a copy of these rules to avoid issues and ensure compliance.
Ontario Standard Form of Lease
Even if you and your tenant have signed a lease agreement, whether independently or through a real estate agent, you must also provide and sign an Ontario Standard Lease. Ensure that you select the appropriate option so that it becomes an attachment to the original documents you signed. Not doing this comes with consequences, and with today’s savvy tenants, you don’t want to be on the wrong side of tenant rights.
2. Do I have to pay interest on last month’s rent deposit?
In Ontario, if you collect a rental deposit (usually equivalent to one month’s rent), you are required to pay the tenant interest annually.
The interest rate is set each year by the Ministry of Housing and matches the current rent increase guideline. This small but important detail is often overlooked by new landlords but can result in disputes or even fines if not handled properly.
3. Do non-resident landlords have to remit withholding tax in Ontario?
Yes, non-resident landlords are legally required to remit monthly withholding taxes in Ontario. This tax is set at 25% of the gross rent, but can be reduced to a lesser or nil amount if you file the appropriate forms for approval to pay 25% on the net rent. This must be done annually. Additionally, legally, the tenant is the person responsible for remitting the rent, and if a property management company is involved, they typically handle this process.
4. Can a landlord collect a damage deposit or pet deposit in Ontario?
No. The only deposit a Landlord in Ontario is legally permitted to collect is a reasonable amount for key/fob replacement plus a deposit equal to one month’s rent, which is to be held for the final month of the tenancy. Also, the Landlord is legally entitled to top up the deposit each year if a rent increase occurs.
🧠 Know Your Rights. Respect Theirs.
Being a responsible landlord means understanding the legal framework and treating your tenants fairly. A well-informed approach leads to fewer headaches, stronger relationships, and long-term success with your rental investment.
🏡 Thinking About Buying a Rental Property?
Whether you’re a first-time landlord or expanding your investment portfolio, contact our team for guidance and personalized support.
📞 Call us at 1 (800) 617-0090
📧 Or email us at [email protected] to get expert advice on buying and managing rental properties in Ontario.
