Renting out a Toronto Condo: What to Know

Renting out a Toronto Condo can be an incredibly lucrative endeavour, but it’s no walk in the park. Make no mistake, being a landlord is a full-time job. Like any job, there are certain factors that you’ll need to consider prior to jumping into the position of landlord. Preparation is the only way to ensure a successful and stress-free investment that is both lucrative, as well as, manageable. Here’s what you should know.

The RTA and Condominium Act

There are two major pieces of documentation that essentially act as the “rule books” to renting out your condo: the Residential Tenancy Act (RTA), and the Condominium Act. As a condominium landlord, you have responsibilities under both pieces of legislation. For starters, you’ll need to familiarize yourself with the rules that apply to the rental of condominiums in accordance with the corporation guidelines outlined in the Condominium Act. The RTA, however, is not specific to condos; it outlines laws related to most landlord and tenant situations. Like any legal arrangement, responsibilities and expectations land on both sides of the arrangement; landlord as well as tenant. Understanding what is required essential to a smooth tenancy. Here are some highlighting points:

Keeping your Condominium Corporation Informed – The corporation needs to be informed if you intend to rent out your unit. You are required to notify them within 20 days of the tenancy starting. You’ll need to provide the tenant’s full legal name(s), your full legal name, your current residing address, and the amount that you will be charging the tenant monthly. Once you’ve determined a tenancy end date, you are required to provide the corporation with a notification of the tenancy ending as well. This notification must be provided within 20 days of the end date.

Condo Fees – Most people are aware that condos accompany condominium contribution fees, commonly known as Condo Fees. A landlord does have the option of passing these fees off to their tenant, or they can choose to pay the fees themselves. If you plan on passing the fees off to your tenant, you’ll need to clearly outline this in the lease agreement. If these fees go unpaid while renting out your condo, the corporation can enforce the tenant’s rental charges to be paid to the corporation instead of the landlord to cover the lost fees. Failing to pay these fees is a direct breach of your condo agreement.

Know the Condo Bylaws – Condo bylaws are designed to outline codes of behavior that you and your tenant are required to adhere to. A responsible landlord will know the bylaws, provide the tenant with a copy of them, discuss it with them during the agreement process, and include them in the lease agreement.

Length of Tenancy Agreements – Leases are typically based on a 12-month time commitment. With that said, you can specify a shorter or longer arrangement depending. Requesting first and last month’s rent upfront is a standard part of the agreement. Once the initial term is finished, the agreement is typically moved to a “month to month” arrangement. At this stage, the tenant is required to provide you with 60 days’ notice if they intend to end the tenancy.

Pets – This is a topic that comes with many ill-informed opinions. Generally, a “no pets” clause is not enforceable by law. You can include a no pets clause on the agreement, but you have no means of legal counter action if a tenant were to lie on an application. With that said, condos can be the exception. It depends entirely on the specific building, as some corporations allow pets and some do not. If your corporation does not allow pets, then you can enforce the rule. If they do, then your hands are tied.

You’re Condominium Corporation May Ask You for a Security Deposit – The thing to keep in mind here is that a landlord owns the unit, not the building. Your condominium corporation may ask for a security deposit in anticipation of potential damages that may be caused to the common grounds by your tenant. The maximum amount that your corporation can ask of you is the equivalent of one month’s rent.

Reviewing both acts in detail will keep you on your game, and ensure a smooth venture. With that said, there are a ton of details to cover, which is typically why landlords choose to partner with a property management company. A company like CMG Toronto can alleviate much of the headache and stress that comes with renting out your Condominium unit by making sure all guidelines are adhered to, drafting legal documents, posting listings to MLS, and determining the best price point for your property.

 

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