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Prepared By: Michael Carabash

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Residential Sublease Agreements in Ontario

DISCLAIMER: Please note that the information provided in this DL Guide is NOT legal advice and is provided for educational purposes only. Laws are subject to change and without notice. This DL Guide may be outdated. If you need legal advice with respect to drafting, revising, negotiating or resolving a dispute concerning a Residential Sublease Agreement, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to help you. You can contact Michael Carabash directly at michael@carabashlaw.com.

Last Updated: June 2010 © 2008-2010, Dynamic Lawyers Ltd. All Rights Reserved.

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Residential Sublease Agreements in Ontario Table of Contents

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What is a Residential Sublease Agreement? .................................................................................................. 3 Do Sub-Tenants have the same rights and obligations as Tenants? ............................................................... 4 Do Tenants have the same rights and obligations as Landlords? ................................................................... 4 How are disputes resolved? ............................................................................................................................ 5 Term................................................................................................................................................................ 6 Rent ................................................................................................................................................................. 6 Compensation for Damage ............................................................................................................................. 6 Termination .................................................................................................................................................... 6 Incorporating the Terms of Residential Lease Agreement ............................................................................. 8 About Us ......................................................................................................................................................... 9

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Residential Sublease Agreements in Ontario
What is a Residential Sublease Agreement?

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A Residential Sublease Agreement is a private contract between a Tenant (a person who leases the rental unit from the Landlord) and a Sub-Tenant (a person who wishes to occupy the rental unit and pay rent to the Tenant). So the idea is simple. The Tenant leases the rental unit from the Landlord pursuant to a Residential Lease Agreement. Then the Tenant vacates the rental unit and gives the Sub-Tenant the right to OCCUPY the rental unit pursuant to a Residential Sublease Agreement. Importantly, the term of the subtenancy MUST END before the Tenant’s term or period ends under the Residential Lease Agreement. After the subtenancy ends, the Tenant has the right to resume occupancy of the rental unit.
Landlord Residential Lease Agreement

Tenant

Residential Sublease Agreement Sub-Tenant

In addition to the written agreements, the lease and sublease relationships are governed by the Residential Tenancies Act, 2006 (“Act”). The Act came into effect on January 31, 2007 and is designed to set the rules for most residential rental housing in Ontario. The Act says a number of things about subletting. First, a Tenant may sublet a rental unit to another person ONLY WITH the Landlord’s consent: section 97(1). A Landlord cannot arbitrarily or unreasonable withhold consent: section 97(2). They must have a good reason for doing so. Indeed, a tenant may apply (within 1 year) to the Ontario Landlord and Tenant Board (“Board”) for an order determining that the Landlord has arbitrarily or unreasonable withheld such consent: sections 98(1) and (2). If the Board finds that the Landlord has done so, it can order that the sublet be authorized (among other things) and even establish terms and conditions of the sublet: section 98(3) and (4). Finally, if and when the Tenant has sublet the rental unit to another person, the Tenant still remains entitled to the benefits, and is liable to the Landlord for the breaches, under the Residential Lease Agreement or the Act during the term of the subtenancy: section 97(4)(a). The same thing goes for the Sub-Tenant: they are entitled to the benefits, and liable to the Tenant for the breaches, of the Sub-Tenant’s obligations under the Residential Sublease Agreement or the Act during the term of the subtenancy: section 97(4)(b). Michael Carabash, B.A., LL.B., J.D., M.B.A. Need an Ontario Lawyer? Make a Post. Get FREE Quotes! michael@carabashlaw.com www.DynamicLawyers.com

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Residential Sublease Agreements in Ontario
Term

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The Term of a Residential Sublease Agreement begins on a certain date (as specified in the Agreement) and continues for a period or term (e.g. 1 year, 6 months, etc.) until it expires or is terminated on a certain date. Importantly, that date MUST be before the Tenant’s term or period comes to an end under the Residential Lease Agreement. So says section 2(2) of the Act. After the Term of the Sublease comes to an end, the Tenant will have the right to resume occupancy of the rental unit. As previously discussed, if the Sub-Tenant is still in possession of the rental unit after the end of the subtenancy, the Landlord or Tenant may apply to the Board for an order EVICTING the Sub-Tenant: section 101(1). This application must be made within 60 days after the end of the subtenancy: section 101(2). The Tenant can even ask the Board to order the SubTenant to pay compensation for use and occupation of the rental unit if, after the subtenancy has ended, the Sub-Tenant is still in possession of the rental unit: section 102.

Rent
A Tenant cannot charge the Sub-Tenant more than what they pay the Landlord: section 134(3)(a).

Compensation for Damage
The Tenant may apply to the board for an order requiring the Sub-Tenant to pay reasonable costs to the Tenant for repairing or replacing damaged property. The Board may make such an order if the Sub-Tenant, another occupant of the rental unit or a person whom the Sub-Tenant permits in the residential complex willfully or negligently causes undue damage to the rental unit or the residential complex and the Sub-Tenant is in possession of the rental unit.

Termination
Under the Act, a Tenant can terminate a residential subtenancy by giving notice and then (if need be) applying to the Board for an eviction order. Such notice may be given as a result of the Sub-Tenant’s failure to pay rent or for doing something contrary to the Act, discussed below. Michael Carabash, B.A., LL.B., J.D., M.B.A. Need an Ontario Lawyer? Make a Post. Get FREE Quotes! michael@carabashlaw.com www.DynamicLawyers.com

The full DL Guide is available for FREE with the purchase of a Legal Form.

Michael Carabash, B.A., LL.B., J.D., M.B.A. Need an Ontario Lawyer? Make a Post. Get FREE Quotes!

michael@carabashlaw.com www.DynamicLawyers.com