Negotiating and signing a residential lease

Reviewed by Nina Knudsen

Updated April 6, 2023 | Published July 10, 2013

In Canada, you can rent a home on a periodic basis (month to month), or on a fixed-term basis. A fixed-term tenancy, often referred to as a lease, is an agreement to rent a property for a certain term. There will be a start date and an end date—usually a period of one year, and the contract will specify things like whether you’re allowed pets or if you need to carry tenant insurance.

Before you sign a lease, there are a few things you should know. Read on to learn all about them:

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Month-to-month or fixed-term tenancies

There are benefits to both types of agreements. If you need flexibility, a month-to-month arrangement might be the best for you. If you want security, an annual fixed-term arrangement might be better.

Though, in most jurisdictions, a fixed-term tenancy automatically converts to a month-to-month tenancy after the lease period ends.

Regardless of the term you choose, your landlord will require you to sign a tenancy agreement form. This protects both you and the landlord in the event of unforeseen circumstances.

In fact, tread carefully in situations where no formal lease agreement is signed; your rights as a tenant may be much more difficult to substantiate if a conflict arises between you and your landlord.

Common tenancy agreement details

Details covered by a standard tenancy agreement will commonly include:

  • The length of tenancy
  • When the rent is to be paid
  • What’s included in the rent
  • Who is responsible to pay for utilities
  • Whether pets or smoking are allowed
  • What amount of security deposit is required
  • When the rent may be increased
  • What the tenant’s obligations are with regard to maintenance and minor repairs
  • What the landlord’s rights are to access the unit for inspections and repairs
  • Procedures that both the tenant and the landlord must follow should either party wish to end the tenancy

Who governs landlords and tenants?

Rental agreements are governed by the provincial or territorial legislation in whichever province the property is located:

  • In BC, landlords must to provide tenants with a copy of the Tenancy Agreement Form as proof of the agreement between the landlord and the tenant. You can get a copy of a Tenancy Agreement Form at the Government of BC.

  • In most other provinces, the government does not provide a tenancy agreement form, but you can obtain one from various landlord/tenant advisory agencies.

  • You can also refer to the Residential Tenancies Act in each province for the specific legal requirements that apply to rental applications and rental contracts.

Keep in mind that, no matter what your lease agreement says, the Residential Tenancies Act in your province will prevail. If you are asked to sign a lease that contains unusual terms that are not allowed under your province’s Act, these terms will never stand up in an arbitration dispute.

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What do I need to know before I sign?

If you are signing a fixed term tenancy agreement, you’re in it for the long haul. Be sure you understand, and agree to, all the terms laid out in the agreement. There are several things you should consider before you sign on the dotted line, including:

Functionality of the unit

Make sure that everything is in working condition and suits your needs! Open the cabinets, turn on the faucets, open and close the windows, make sure the door locks are in good condition. Take measurements to be sure all your furniture will fit. Check out the appliances and laundry facilities.

Existing damage

Take photos of any existing damage, such as broken tiles or blinds, stains on the carpet, nicks in the walls. These things should be listed in the rental agreement, so you don’t get charged on when you move out.

Included items

Be sure you know exactly what’s included in your monthly rent payment. Ask about utilities, cable, laundry, and parking. Surprise expenses could put a strain on your budget.

Alterations to the unit

If you love to decorate, check with the landlord to see what they’ll allow. If you start painting walls or pounding nails without permission, it could be considered “damage,” resulting in the cancellation of your lease, or the loss of your damage deposit.

Pet allowance

If you own a pet, be sure to ask if pets are allowed, and if so, what type. Many places have a restriction on the size and type of pets allowed—if they allow any at all. Don’t be tempted to sneak in a pet; you will be held in breach of contract.

Commuting distance

You may have moved out to the suburbs to save $100 a month in rent, but that extra distance could cost an extra $200 in gas to drive downtown to work. Consider commuting, amenities, and other cost-of-living items before committing to a year-long lease.

Termination clause

What if you have to move before your lease is up? Maybe you’ll find a new job in another city, start a family, or have the opportunity to buy a home. Make sure you know what sort of penalty you’ll be required to pay, and if that’s something you can live with. If you just want to move out at the end of the lease term, what sort of notice do you need to provide?

Many of these requirements are stipulated by provincial laws, but make sure you read the tenancy agreement thoroughly before you sign anyway. If the landlord has told you that your pet is no problem, or that you can paint a mural on your living room wall, make sure these things are noted in the agreement.

Once you’ve decided to proceed with a residential lease, it’ll be time for you to pick up a solid home insurance policy to protect your personal belongings, as well as your liability to others as the occupant of your new rental apartment.

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Want to learn more? Visit our Renter resource centre for more tips and information about life as a renter. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.

About the expert: Nina Knudsen

Nina Knudsen has 12 years of property management experience under her belt. Nina is part of the team at Royal LePage Sussex, bringing her experience to the company’s Property Management division as the Managing director of the Hello Rent team.

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