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Everything You Need To Know About Renting In Canada
In Canada, an estimated ten percent of the population plans to rent for the remainder of their lives. Though previous generations regarded homeownership as a must-have token of success, renting has its own set of benefits. Not only is it generally lower cost than a mortgage, but the renter is also free of responsibilities to the property. Heating out? Plumbing not working? The repairs fall into the purview of the landlord. Many Canadians are choosing to rent, not only due to the fierce housing market but also for convenience and accessibility.
Understanding rental regulations are critical whether you are planning on renting out your basement suite or are simply planning to rent in a new area. This breakdown details everything you need to know about residential tenancy so you can make the housing market work for your needs.
Rights And Responsibilities Of A Tenant
While there are some standards of practice that remain true across the nation, the specifics diverge based on the province of residence. The regulations for tenancy are different in Quebec and Saskatchewan (and every other province for that matter). The differences are meant to represent the population demographics and infrastructure.
Regulatory boards differ by province, each with specific funding and legislation that is not federalized. However, while the specifics are different depending on where you live, some things remain true across Canada. These are meant to accommodate four central tenants:
A tenant has the right to a livable home, fit for habitation. This includes cleanliness, maintenance, access to utilities, and a lack of interference. In return, the tenant must be timely with rent payments, not interfere with the landlord, and promptly communicate issues requiring attention. Further, tenants must allow their landlords entry to the premises so long as the tenant was supplied with proper notice.
The above represents the minimum standards across the country, though there are more nuanced rules on a provincial basis. If you are considering renting in a different jurisdiction, be sure to familiarize yourself with the rental regulations of the area.
Requirements To Rent In Canada
In order to rent anywhere in Canada, you must have, and be able to present, several key documents. These are required for several reasons, ranging from proving your identity to ensuring your ability to make rent payments. Keeping all these documents together and in good order will go a long way to making the rental experience easier.
Documents Required To Rent In Canada
There are five essential documents necessary for rental in Canada, including:
- Identification: First on the list is official identification. You can use a passport, government-issued photo ID, or a Permanent Resident card. Unless you live in a province with photo-inclusive health cards, such as British Columbia and Quebec, these will not suffice. The key is that the photo ID is issued by a government body and is up to date.
- Pay Stubs and Employment Letter: Though technically a two-parter, these documents count as one for their synchronized purpose. The preceding three months of your pay stubs are required to prove how much you earn. Whereas, an employment letter informs the landlord that you’re going to remain employed for the foreseeable future.
- Bank statements: This is to highlight your ability to actually pay rent. Pay stubs show your net earnings, but it doesn’t show where the money goes. If three-quarters of your income is going towards car payments and other debt, then it shows that you are not likely able to pay rent.
- References: These showcase your ability to maintain relationships, highlighting that you don’t burn bridges in your wake. Similar to employment references, you can reach out to old landlords, colleagues, or anyone else who can attest to your character.
- Rental history: The longer your rental history, the better a prospective renter you are. Landlords request this to show that you are likely to remain in the property for a reasonable history of time. They are aiming to avoid individuals who end leases prematurely or those who continually change living arrangements after short periods. Renters with a history of steady housing are preferred to those without one.
Will Your Landlord Check Your Credit Report?
In some cases, landlords will check your credit. While you do have the legal right to refuse consent to that credit check, it realistically may impact your likelihood to get the rental. If the landlord requests a credit report, it is to check that you have a proven history of paying your bills. The report provides the landlord with an understanding of your probability to make rent. . Breaking down addresses on record, open lines of credit, and any actions against you, the credit report offers prospective landlords a measure of security when renting.
Can You Rent An Apartment With Bad Credit?
Yes, you can rent an apartment with either bad or no credit in Canada. While some rely on lowering their sights rental-wise and others will use extra sources to help them secure a rental unit. Depending on your financial circumstances, you can rent an apartment with bad credit by doing the following:
- Look for no credit check rentals: Look for no credit check rentals: There are some rental properties that don’t require credit checks in Canada. However, the decision rests solely on the landlord considering your application.
- Use online platforms: The digital world is swimming with opportunities to find rentals that meet your criteria. You can connect directly with a landlord; and, in many cases, you can see the requirements and avoid credit checks altogether.
- Talk to a real estate agent: No one is more familiar with the housing market than a real estate professional. Be upfront and honest about your finances and personal situation. They can help you find properties for which you would qualify or inform you of other steps you can take to be a more desirable renter.
- Improve your candidacy: In order to get an edge over the competition, make yourself a more desirable candidate by addressing the shortcomings in your present situation. Ensure that you have steady employment, pay down your debts, and generate a savings account that you can use to leverage a rental.
- Get a co-signer: Having someone guarantee your tenancy is an effective way to set yourself apart from the competition. Though it shouldn’t be your go-to response, a lack of rental history or poor credit can make it almost impossible to rent without one. It does, however, make the guarantor responsible for the lease in equal part.
- Offer advance payments: You’re going to end up paying the rent regardless, so making advance payments on your lease is a pretty great way to incentivize a potential landlord. There are a couple of other ways that you can add value to your application. Consider offering an extra $50 per month, a useful maneuver when filling your application. However, in general, landlords are legally only allowed to collect up to one month’s rent as a security deposit.
Do You Need Tenant’s Insurance To Rent?
While landlords have insurance to protect the property, it doesn’t extend to tenants. Tenancy insurance is a specific type of coverage, meant to protect renters against certain risks such as theft, personal property damage, and legal liability.
The laws regarding tenancy insurance vary based on the province. However, in general, you are not required by law to have tenant insurance, nor can a landlord force or coerce you to do so. That said, if it is a part of a signed lease, then you are obligated to purchase it as you’ll be bound by contract law. Meaning, if you do not get the insurance, then the landlord is entitled to end your tenancy due to breach of contract.
Does Canada Have Rent Control?
Rent control regulations are policies established to both stabilize the housing market and promote affordability. The basic idea of rent control is to restrict landlords from raising rental rates to unreasonable prices and prevent them from using these rates to discriminate against tenants. Rent control is essentially a law that helps optimize the accessibility of affordable housing in Canada.
There are three main focuses of rent control, each representing a different aspect necessary to keep the system ethical. These include:
In Canada, six provinces set limits on how much landlords can increase rent. Quebec, Prince Edward Island, New Brunswick, Ontario, British Columbia, and Manitoba restrict the increments by which rent can be increased. Each jurisdiction has set regulations. In Ontario, buildings occupied prior to 2018 are all subject to rent control. Manitoba sets it so that any building made or occupied subsequent 2005 are rent-control exempt.
Increase limits are measured as a percentage of the rent paid, so the real figures are higher for more expensive units. New Brunswick bases increase based on the surrounding rental units while Quebec uses an algorithm that accounts for repairs and revenue. All seven other provinces and territories have no increase limits set for rent increases.
Another aspect of rent control involves the frequency at which landlords can increase rent. It also includes rules regarding how much notice a landlord must provide a tenant before they can increase the rent. Typically, the notice is three months, though Saskatchewan and Newfoundland require only two months. Nova Scotia requires the longest notice at four months. As for the frequency at which landlords can increase rent, all provinces allow landlords to increase rent once per 12 months. However, the amount they can increase varies by province.
Most Canadian jurisdictions have this landlord-favouring component of rent control, with the exceptions being Manitoba and Prince Edward Island. Vacancy decontrol refers to when a tenant moves out of a rental, allowing the landlord to establish a new rent for the subsequent tenant. Without controls on this, once a tenant leaves, the price for the next renter could increase drastically.
To prevent this, Manitoba puts a limit on the rent which the landlord can charge the next tenant. It’s set to the average of comparable rentals in the same building. Prince Edward Island sets it to a certain percentage based on multiple factors. It is set by the Island Regulatory and Appeals Commission and uses everything from the Consumer Price Index to vacancy rate to set the limit.
Rent Control In Canada
To break down the differences between the Canadian rental jurisdictions, the chart below details each area’s policies regarding rental increases.
|Increase Limits for Current Tenants||Increase Limits for New Tenants||Rent Increases Restricted to Every 12 Months|
|Prince Edward Island||Yes||Yes||Yes|
How To Terminate A Lease In Canada?
From growing families to changes in employment, there are plenty of reasons to terminate a lease. However, with residential tenancy legislation, it is essential to understand the conditions under which you can acceptably end your rental agreement. These include:
End Of Lease
When you signed your lease, there was a set term. Now, in many jurisdictions, there is an automatic carryover, where your lease renews without action. In other areas, you must explicitly state your intention to maintain residency in the rental. If you wish to terminate your lease, the best and easiest way is to wait for it to naturally end. However, do ensure you inform the landlord in writing, within the necessary notice window. The standard is three months, giving the property manager time to find a new tenant.
Sublet or Assignation
Sometimes a situation will arise in which you must end your lease early. In these situations, you can sublet the rental. This is an agreement between the renter on the lease and the tenant who will be the resident (the sublessee). You are responsible for the rental, though the sublessee pays you for the property per your agreement. To sublet, you have to inform your landlord and get their permission. However, this is more of a formality as they cannot refuse your request to sublet. But they can reject the person you choose to sublet to if they have a valid reason.
Assignation is a bit different. Landlords and tenants work together to find a new tenant to transfer the lease to their name. Naturally, it requires the landlord’s permission and may come with administrative fees. However, since it frees you from any obligation to the property by fully assigning the lease to another party, it is often the preferred approach.
Depending on the province, there are set procedures to accommodate the need to exit a lease early. These account for issues of domestic violence and illness or injury preventing the tenant from caring for themselves. Expressing these situations to the landlord is a good first approach since they are able to release you from the agreement. The above are examples of special circumstances covered by legislation; but, in many cases, landlords will at least facilitate assignment out of good faith.
Should the circumstances surrounding your need to move involve the landlord himself, there are measures you can take. At the end of the day, a lease is a contract. If the landlord breaches the agreement, then you are entitled to exit the lease. You will, however, need proof of the breach. A series of work requests left unanswered, or unlivable conditions brought to the attention of the landlord yet remaining in disrepair, are also good ways to highlight contractual breach.
Eviction Laws In Canada
On the other end, there are regulations set in place to protect the landlords and rental properties. These rules allow for the eviction of tenants in the event they breach the rental agreement. The reasons for evictions are fairly consistent across the board, however, there are variances depending on the province.
Generally, eviction is a last resort option for many landlords. Tenant turnover causes a lot of wear and tear on the properties, costing in cleaning, administration, and rental loss for the period during which it is empty. However, if the benefit of terminating an agreement exceeds the costs of keeping the tenant, there are set reasons for which a landlord can legally evict a tenant.
Check out these 10 mistakes renters make.
- Breach of contract: All that fine print on your lease is there for a reason. If you violate the terms of the agreement, then the landlord is entitled to void the lease and pursue eviction. Everything from violating smoking regulations to noise levels to pet standards can be construed as breaking the lease, particularly if it is an ongoing issue.
- Non-payment of rent: The most common reason landlords pursue eviction is the non-payment of rent. Even with late payment, there is usually just a charge tacked as a late fee. Non-payment is when a tenant literally does not pay rent, whether through inaction or direct refusal. It is a clear violation of the lease and is grounds for eviction.
- Eviction for cause: If you are a risk to the safety of other tenants, you are damaging property, or are otherwise posing a threat to the wellbeing of the property, then the landlord has grounds for eviction. While it requires a court order, the eviction can be immediate.
- Personal Use: If your landlord requires the rental unit for himself or for a family member, they are legally allowed to evict you. However, a notice is required for this type of eviction, the notice length ranges around the two-month mark, but varies by province. Moreover, depending on the province, you may be entitled to some form of compensation.
- Renovations: With the appropriate notice supplied, the landlord can evict the tenant for the purpose of demolishing the property or doing a large renovation. If the landlord is converting the rental to non-residential property, then they can rightfully evict the tenant.
- Selling The Property: The landlord always retains the right to evict a tenant for the purpose of selling the property, assuming they provide the proper notice. It is most common for smaller-scale properties such as basement suites, though a large building changing corporate hands would also permit for these eviction grounds.
Average Rent Payments In Canada
Rent payments in Canada depend on multiple factors, ranging from location to property type and size. The national average for a one-bedroom apartment is $1,358. For a two-bedroom rental, it rings in at $1,723. It varies largely based on the area and location of the property. Rural spots are naturally lower cost than a popular urban setting. The more volatile the housing market, the higher the price of rent. You can get a one-bedroom in Lloydminster for $742 while in Vancouver you would be paying on average $1,855.
There are hidden gems in every area, but the general trend of rent is inclined upwards. If you are in a good position in terms of credit, then you can get ample rental incentives. However, if you are in poorer standing by way of credit or rental history, then it can be challenging to find a decent property. No matter where you plan to rent, be sure to factor in transportation and access to amenities. There’s a reason people pay higher rents to live in cities.
How To Build Credit With Your Rent Payments?
Regardless of where you rent, it can be used to grow your credit. There is an innovative new consumer reporting service called the Landlord Credit Bureau (LCB). Creating an account is free and it lets you apply your monthly rental payments towards your Equifax credit profile. Every time you make a timely payment, it is reflected in your credit score. On-time payment and consistent rental history both improve credit, making this a great opportunity for every renter.
The LCB platform offers a range of services, beneficial to tenants and landlords alike. Proving your rental history and improving your credit score, signing up with this service can make a big difference in building credit.
Can You Pay Your Rent With A Credit Card?
Typically, no, you cannot pay rent with a credit card. The standard is for rent to be automatically withdrawn or for the tenant to issue post-dated cheques at the beginning of the year. This allows for less administratively tedious rent collection on the part of the landlord. It also prevents tenants from inadvertently forgetting to pay. However, with the increase in cash back and rewards cards, many wish to pay rent with a credit card.
Apps such as RentMoola and Plastiq allow you to use credit cards to pay rent, taking a fee for the transaction. It’s advantageous for those using credit cards with incentives. However, the fee tacked on by these services makes it less valuable. Be sure to do the math based on the fee of your chosen service and the benefits you could reap from your credit card points. Make sure it is worth the extra effort.
Watch Out For Rental Scams
Renting in Canada means planning for the best and being alert for the worst. Rental scams are, unfortunately, common in Canada, especially for those seeking a rental out of the province. These scams present in different ways. Someone can pose as the landlord of a property, get you to pay to reserve the rental, and simply take the money. In general, you can sniff out a rental scam from certain behaviours.
- Asking for money too soon – If the landlord wants money before signing a lease, that’s a red flag.
- Too good to be true – Does the price look far too impressive? If that’s the case, take a break and do diligence.
- Immediate move-in request – If the landlord wants you to move in before seeing the property, there is cause for concern.
- No in-person meetings – A landlord being evasive about meeting at the site of the rental can indicate an issue.
- Questionable paperwork – A dangling participle is one thing, but choppy language, poor grammar and severe spelling errors are a red flag.
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Should You Rent Or Buy A House
A major decision for most Canadians is whether to rent or purchase a home. Each decision has its own set of advantages, but also some downsides too. Home buying means building equity, fostering an asset for future sales, and settling into a long-term living arrangement. It also means long-term debt, risky interest rates, a volatile housing market, and a hefty downpayment.
Renting puts the tenant without an asset, where the rent is in no way contributing to usable equity. The renter is, in many ways, vulnerable to the choices of the property owner. However, renting means lower costs, no down payment, and no maintenance responsibilities. Generally, rentals are easier to access than homes for sale and can even come with perks.
Ultimately, deciding whether to rent or own is a deeply personal choice. The factors in this choice are not merely financial, leaching into family planning and lifestyle. Generally, in the planning phase, families opt to rent. There is less of a commitment and it lets you position yourself in a controlled fashion when you do choose to buy.
What happens if your landlord sells the property you are renting?
What is a rent-to-own program?
Can a landlord say no to pets?
Can a landlord say no to smoking?
There are some aspects of residential tenancy that remain true across Canada, but when it comes to specifics, the rules differ by province. Be sure that you focus your research towards the applicable jurisdiction. Understanding how the rental industry works in Canada is important whether you’re a landlord or a tenant. By learning your rights and responsibilities, you can ensure that you make the most of your rental opportunities.
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