What Should you Know About Renting your Condo in Toronto

Renting out a condo unit in Toronto, or any other city for that matter, can be an incredibly lucrative endeavor. Whether you’re using it as a side income, or if you’re main goal is simply to have someone else pay down the mortgage while you wait for the property to build up equity, the chances are you’ll come out on top at the end of the day. With that said, it’s not a cake walk. There are a few things you should know prior to jumping into this venture.

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For starters, you’ll need to familiarize yourself with the Residential Tenancy Act (RTA) as well as the Condominium Act. You have specific responsibilities under both pieces of legislation as a landlord and owner of a condominium. The RTA outlines the laws related to most landlord and tenant situations; you’ll want to be aware of the rules and guidelines set forth in the act that apply to both your tenant as well as yourself. The Condominium Act outlines additional rules that apply to the rental of condominiums, as there are corporation guidelines that must be adhered to. Here are a few examples:

You Must Keep your Condominium Corporation Informed

Once you’ve found a tenant, the corporation needs to be made aware. You’ll need to inform the corporation of your intent to rent out the unit by giving a written notice within 20 days of the tenancy starting. The notice must include your 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. The same rule applies once you are ready to stop the tenancy; you’ll need to provide notice to the corporation within 20 days of the tenancy ending.

Don’t Forget About your Condo Fees

Condos come with condominium contribution fees, most commonly known simply as Condo Fees. When writing up your lease, it should clearly state whether or not the tenant is responsible for paying the condo fees. Failing to pay your condo fees will land you in hot water, so you’ll want to factor this in when writing up the agreement and deciding on the monthly amount to charge. If you are renting out your unit, and the condo fees go unpaid, the corporation can enforce the tenant’s rental charges to be paid to the corporation instead of you, to cover the lost fees.

Be Aware of the Condo Bylaws

A responsible tenant will be aware of the condo bylaws, and they will make sure that the tenant is also aware. The bylaws should be outlined in the lease agreement, and your tenant should also be given access to a copy of the bylaws.

The Condominium Corporation Can Ask for a Security Deposit

The mortgage may be yours, but the building itself is the corporations. In anticipation of potential damages that your tenant may cause to the common grounds, your corporation may ask you for a security deposit to cover them. The maximum deposit they can ask for is the equivalent of one month’s rent.

How Long Should the Lease Agreement Tie Down the Tenant?

Leases are typically based on a 12 month commitment. You can request first and last month’s rent up front. Once the 12 months are up, the agreement is typically moved to a “month to month” basis. Once the tenant is month to month, they are required to provide you with 60 days’ notice if they intend to move out.

What About Pets?

You are perfectly within your rights to place a “no pets” clause on your agreement. With that said, it’s not enforceable by law. You can choose not to rent to a tenant who has pets, but if that tenant lies on the application, and you find out later that they have pets, you are not legally entitled to evict. For better or for worse, you’re stuck.

For a complete list of details, you should review both acts with a fine tuned comb. These are of course just a handful of key points, while there are far too many guidelines to cover in one post. Learning all of these rules and regulations can be a massive headache. If you have the time and commitment to learn on your own, great! You’re a gem. Typically, working with a real estate professional is your best bet. A professional can make sure all guidelines are adhered to, draft up legal documents, post your listings on MLS, and determine the right price point for your property. What’s more is that they can drastically minimize the risk of you ending up with a tenant from hell by going through a vigorous screening process. CMG is here to help make your rental process easy and lucrative.