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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.
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.
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.
There are five essential documents necessary for rental in Canada, including:
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.
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:
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.
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.
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|
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:
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.
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.
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.
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.
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.
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.
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.
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.
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.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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