PLEASE LET ME MOVE OUT!
Life's realities sometimes make it necessary for a Tenant to move and leave their current apartment. Sometimes, the reality is a job loss, a relationship breakup, or sometimes the reality is an opportunity for a better job in a different city. Family responsibilities or financial set backs can also contribute to the need to terminate a tenancy early. Many of these "realities" are unexpected and take people by surprise. The year long term of a lease, or the multi-year term that seemed like a good idea to sign up for is, all of sudden, a tremendous burden.
For tenants who never signed a lease and are on a month to month tenancy, or for tenants whose lease terms have expired and therefore the lease has automatically renewed on a month to month basis, the extent of liability to the Landlord for ongoing rent is 60 days notice to the end of the term. In theory this could amount to a maximum of three months rent.
A tenant who is on a month to month tenancy needs to give a landlord 60 days of notice to the end of term. The exact rules for this and the timing of that notice is set out in a handy form that the Ontario Landlord and Tenant Board provides. That form is the Form N9 and is called a Tenant's Notice to Terminate.
FIXED TERMS
What is meant by "Fixed Terms" is a lease that was entered into for a term other than a month to month term. The typical or normal term is one year. After the one year term expires, a lease in Ontario does not end. Without doing anything at all, the lease automatically renews periodically on a month to month basis.
During the original lease term, a tenant is presumed to be committed to staying in the rental unit and paying the rent for the entire term of the lease. After the expiry of the original lease term, the lease goes month to month, and a tenant is only presumed to be bound to pay the future rent for up to 60 days as the tenant may terminate the month to month tenancy on a minimum of 60 days written notice to the end of the monthly term.
What if a tenant needs to terminate a lease during the original fixed term of the tenancy? For this discussion, lets presume a scenario where the tenant has signed a one year leasing starting January 1, 2017, in Ottawa, Ontario. The tenant moves in and is obligated to pay $1500 per month on the first of every month. The term is indicated in the lease as ending on December 31, 2017. On February 4, 2017, the tenant's local job is terminated but she is offered a transfer to another location in Toronto. If she wants the job, she has to start, on March 1, 2017. She basically has three weeks to find a new apartment in Toronto, pack, move, and wrap up her life in Ottawa. In that time she has to figure out what to do with her Ottawa apartment. She has only paid for January and February and now after these two months has 10 months of rent left which totals $15,000.
What can this tenant do? A telephone call to the Landlord and Tenant Board will result in the tenant being told that she can "Assign" the lease to another person. The Residential Tenancies Act provides that a tenant may assign a lease with the consent of the landlord. If a landlord chooses not to allow the tenant to assign the lease a tenant may terminate the lease--even if in a fixed term--on 30 days notice to the landlord regardless of the length of the term of the lease.
The applicable sections of the RTA are found in Part VI, specifically in section 95 and 96.
The first thing that a tenant should do, in relation to "assigning" a lease is to ask the Landlord, in writing, whether the landlord agrees to allow the tenant to assign the lease. This is a general request for permission to transfer the lease to another person. The reason to ask this question is that a landlord has the right to say "no". The landlord does not have to have a good reason to refuse an assignment on a general basis. Given that the point of an assignment is to transfer responsibility for the lease to another person, a tenant whose landlord refuses consent to assign should be just as happy to terminate the tenancy agreement using a Form N9. A landlord's refusal to consent to assign is grounds for terminating a tenancy under section 95(4) RTA.
WHAT IF THE LANDLORD AGREES TO ASSIGNMENT GENERALLY
After asking your landlord for consent to assign the lease (without proposing any specific person to take over the lease) in writing, your landlord has seven days to respond to your request. If the landlord responds within the seven days stating that they agree to you assigning the lease you are then left with the task of trying to find a new tenant to take over your lease. You can advertise, find friends, friends of friends, hold open houses, and do whatever you can to find a new tenant. Your success will likely turn on the state of the rental market, how desirable your rental unit is, and the amount of your monthly rent.
Presuming some success in finding a person who wants to take over your lease you will need to work with the landlord to have the landlord assess the tenant to see if the person you have found is suitable. The landlord needs to assess the prospective assignee reasonably and objectively--meaning the landlord can't just say no for arbitrary reasons. The landlord may run a credit check or background check on the tenant to make sure that the assignee is acceptable. You may be charged a fee for the out of pocket expense of doing so--but only if the cost of the background check results in the assignment of the rental unit. A landlord is only entitled to charge for the background check when the background check results in a "yes".
If you have been lucky enough to find a new tenant to take over the lease on an assignment the landlord will prepare some kind of document (sometimes just a written acknowledgement), that the assignee has taken over the lease from a certain date. For the tenant doing the assigning (i.e. the tenant who is leaving), getting a firm and fixed date in writing about when the assignment takes effect is critical. This date is important because it is from the date of the assignment that the tenant who is leaving is no longer liable for rent, damage, or any behaviours of any guests in the rental unit. The liability of the tenant who is leaving is limited to rents owing, damage caused, upon to the date of the assignment.
The assignee (tenant taking over the lease), is likewise only responsible for rent, damage, and tenant responsibilities from the date of the assignment. Anything that existed before the assignment is not the responsibility of the assignee. Hence, as you can imagine, it is very important for the "leaving tenant" and the "new tenant" to clearly document and record the condition of the rental unit on the date of transfer. The old tenant doesn't want to beheld liable for new damage caused by the new tenant and the new tenant does not want to be liable for damage that existed on the date of the assignment. Without a clear inspection and acknowledgement of the landlord about the condition of the premises on the date of assignment there is a risk that the landlord chases both the old tenant and the new tenant for damage when the tenancy ends.
IS THERE ANOTHER WAY to end the tenancy?
The assignment process that was just discussed is the "way" that the LTB will advise tenants who need to leave early to deal with the tenancy. That being said, nothing stops a landlord and tenant from agreeing to terminate a tenancy on terms that work for both. When an agreement to terminate is reached the parties can use a Form N11 to terminate a tenancy (regardless of term). The obligations to each other under the lease will be effective on the termination date set out in the N11 Form. Note that there is no minimum notice period for an N11. Where the parties agree, they can legally choose any termination date that they wish.
Michael K. E. Thiele
www.ottawalawyers.com
