How to Handle a Tenant Who Wants to Break Their Lease Early in Ontario

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It's not uncommon for landlords to face situations where a tenant wants to end their lease agreement prematurely. We’ve had this happen three times in the last 2 months at properties we manage. At first, it can feel like a daunting piece of information but understanding how to handle this scenario in Ontario is crucial for managing properties effectively while respecting tenants' rights as outlined by the Landlord and Tenant Board (LTB).

Know the Law

In Ontario, the Residential Tenancies Act (RTA) provides the framework for addressing issues related to lease agreements, including early termination. As a landlord, it’s essential to familiarize yourself with these regulations to ensure that any steps taken are within the legal boundaries. Over the years we have become familiar with the laws as we were forced to learn them as situations arise. We have found the next point to be the MOST crucial for accommodating an early lease ending request.

Communicating with Your Tenant

When a tenant expresses the desire to break their lease early, the first step should be to have a detailed discussion to understand their reasons. Open communication may lead to mutually agreeable solutions such as subletting the unit or assigning the lease to another tenant, which are both permitted under the RTA. After all, being a good human should be at the forefront of your actions when in the landlord position. It may add a little more work to your roster for a short period to find a solution for the request, but do you really want someone living in your house if they don’t want to be there or are struggling in some way to be there. Happy tenants will take a lot better care of your house if they feel it is a home than a burden.

Consider a Mutual Agreement to End the Tenancy

One of the simplest solutions is negotiating a mutual agreement to terminate the tenancy (N11 form). This agreement involves both parties agreeing on a date to end the lease early. Ensure this agreement is documented in writing and signed by both the landlord and the tenant to avoid any future disputes.

Subletting and Lease Assignment

If a mutual agreement isn’t feasible, tenants in Ontario have the right to sublet their apartment or assign their lease to someone else. However, they must seek your consent as the landlord. While you cannot unreasonably withhold consent, you are entitled to vet the new tenant as you would normally:

• Subletting: The original tenant retains their rights and responsibilities under the lease but lets someone else live in the property for a period.

• Assignment: The original tenant completely transfers their lease to a new tenant. After an assignment, the new tenant assumes all rights and responsibilities under the lease, and the original tenant typically has no further obligations.

Handling Disputes

If a dispute arises, either party can contact the Landlord and Tenant Board for guidance. The LTB provides resources and mediation services to help resolve disputes and offers a formal hearing process if necessary.

Prepare for the Unexpected

Always be prepared for the possibility of a tenant wanting to leave early by ensuring you have used the Standard Ontario Lease which outlines the process and penalties for early termination. Side note: you are required by law to use the standard Ontario lease in all situations except for a rooming house, meaning you reside in the house and are renting out other rooms as roommates. Consider including a clause that requires the tenant to pay a certain amount if they terminate the lease early without proper cause or notice as defined by the RTA.

Conclusion

Dealing with a tenant who wants to break their lease early can be challenging, but understanding your rights and responsibilities as a landlord can make the process smoother. Always aim for amicable solutions that respect both parties' interests and seek legal advice if you're unsure about the best course of action. This has worked for us in even the toughest situations, we pride ourselves in our communication abilities with both our Landlords and Tenants.

By being informed and prepared, you can handle such situations professionally and maintain a positive relationship with your tenants, even as they transition out of your property.

For more detailed information and resources, you can visit the Landlord and Tenant Board of Ontario’s website.