Canada, Toronto Rental Guide

a) Find a reliable Toronto real estate agent

Once you have chosen to rent long term, the next thing to do is to find a real estate agent who is familiar with your desired area and let him or her search for properties for you to rent and use his or her expertise to help you avoid pitfalls. You need to clearly communicate your needs to the Toronto rental agent representing your interests, such as what kind of neighbourhood, school district, transportation environment, and especially your budget. If your expectations are too high or your budget is too low, the agent will not be able to find any properties.

A professional Toronto real estate agent will show you the actual prices of similar properties that have recently sold on the market. After making adjustments to your budget or needs based on market prices, your real estate agent will be able to conduct a search for you. In Canada, the market is centralized in a centralized database, the Multiple Listing Service (MLS), which is integrated by each city's real estate office. Once the broker fully understands your rental needs, he or she will search for suitable properties for you from the Toronto MLS, recommend and arrange viewings for your preferred candidates.

In Toronto, rental brokers are exclusive to tenants. Tenants do not need to worry about limiting their access to properties by hiring only one broker, because, all properties in the market are shared and the visible listings are consistent across all Toronto brokers. A tenant's concern about not being able to rent their desired property is to ensure that their rental budget matches their expectations, not to change brokers. The key to selecting a broker is to assess the TA's professionalism (familiarity with the market, presentation of data), dedication (speed of feedback to tenants' needs, patience in answering questions) and the evaluation of TA by past tenants (Google reviews, etc.).

b) Preparation before renting an apartment

Vetting tenants is critical for landlords, mainly because Canadian law has strong protections for tenants. Even if a tenant does not pay the rent on time, the landlord is not free to evict the tenant on his or her own, but must go through a strict legal process. In Toronto, this process can take up to several months. The landlord also has to bear the loss of rent while waiting for the eviction order to be enforced. This is why real estate agents and landlords in Toronto usually go through a series of information before renting a property to determine if the applicant will be a good tenant who will pay the rent on time and abide by the law.

Your real estate agent will inform you of the documents you need to have ready to rent your home and the rent. If you are a local Canadian resident and have been working for a while, you can prepare the following documents in advance for your landlord to review.

1. Personal Credit Report (Personal Credit Report)

If you have lived in Canada for a while, you can check your credit report through several credit bureaus, such as Equifax and TransUnion. A good credit score is a score of 700 or higher (out of 900).

1. Proof of income

The tenant will need to produce a certificate of employment or a letter from the employer at the company he or she works for, stating basic information such as job title and salary income. You can also add bank statements, etc., to prove to the landlord a stable source of income and the ability to pay rent.

1. Reference letter from former landlord

It would be a plus if you could provide a reference letter from your former landlord to prove that you were a previous tenant who paid rent on time and had good living habits, although this documentation is not required.

1. Rent and deposit

The requirement to have at least two months' rent in place before starting a lease is the maximum that a landlord can voluntarily request by law, but is the minimum that landlords generally require in the Toronto rental market. Once the tenant has passed the landlord's vetting process, the landlord will accept and sign a rental agreement if the rent is satisfactory to the landlord. Within 24 hours of signing the contract, the tenant is required to pay the first and last month's rent to the trust account of the listed brokerage firm representing the landlord. Rent is paid monthly upon move-in, with the last month's rent being used as a security deposit.

For new immigrants and international students who are new to Toronto and cannot provide a credit report or proof of income, it is best to pay six months or a year's rent in advance to partially eliminate the landlord's doubts and concerns and to increase the competitiveness of the rental application (offer). Note that this needs to be initiated by the tenant, as the landlord is not legally allowed to require or force the tenant to do so. However, if there is a strong landlord market and the tenant is not willing to pay more upfront on the lease, the application can easily run into obstacles.

c) Appointment for viewing and starting time

The recommended time to see a property for rent in Toronto is two to three weeks prior to the start of the lease. You don't need to look too far in advance because many of the properties are already vacant and ready to rent. Once the tenant is satisfied with the property, he or she can apply immediately and start renting upon successful application. If you look too far in advance and then don't start renting right away, most landlords will not be happy to wait for a vacancy unless the rental market is unusually slow, as it was in downtown Toronto during the epidemic.

Conversely, if the rental market is hot, such as during the school season in July and August, apartments for rent near the University of Toronto downtown can be particularly sought-after. Therefore, it is best for tenants to look at apartments early and start renting early to avoid not being able to move in at the expected time.

d) Make an offer - Submit a letter of intent Offer

Once you have found a property you like, it is time to submit a letter of intent and your own information to the listing agent and landlord. Your agent will draft a rental agreement/letter of intent for you as appropriate to ensure your interests are protected.

Sometimes, however, tenant expectations and budgets can diverge. This requires an open and honest discussion between the tenant and the agent: it is effective for the buyer's agent to show where the Toronto rental market is going, what the tenant's expectations are for the type of property that has sold recently, and whether there are any deviations between the tenant's budget. Fact-based communication can help tenants quickly understand the market, revise their budgets or adjust their expectations for the property, and allow the next stage of the rental process to proceed smoothly.

e) Extreme Landlord Market

If it doesn't happen to be an extreme situation, such as a white-hot landlord market and bidding for rentals in Toronto in the lead-up to the September 2022 school season, then mutual trust and unhindered communication between tenants and brokers is especially important.

Since apartments for rent are rented out quickly as soon as they become available, on the one hand, brokers need to ensure that eligible new daily listings are available to tenants in real time. On the other hand, for apartments that require bidding, the broker needs to show the recent rental transaction price of the unit of interest with its similar unit type in real time as a way to suggest bids. If the tenant's strength can keep up, he or she must match the bid, rather than gambling with the market and being left out of the bidding again and again. And if the tenant's financial strength cannot keep up, the broker will quickly adjust the search strategy by suggesting new search terms after lowering, and the tenant should cooperate with the adjustment to ensure that the original budget can still be used to successfully rent a home in Toronto within the time limit.

f) Tenants with pets

In Ontario, the "no pets" clause of the lease is not legal. However, landlords can ask if a tenant has pets when they accept an application. Also, a landlord can refuse a tenant who has a pet.

However, once you move in, even if there is a "no pets" clause in the lease agreement, the landlord cannot evict the tenant simply for having a pet. Unless the property is a condominium, such as a high-rise apartment, and the By-law itself has restrictions on pets, such as breed, number, and size. Also, if the pet is causing a nuisance to the surrounding residents, the landlord can apply for LTB arbitration to have the tenant make improvements or even evict, depending on the situation.

Renting is also something you have to do, even though the law takes care of tenants with pets. As a tenant, reflecting the pet ownership situation to the landlord truthfully is beneficial to a good landlord-tenant relationship in the future to avoid unnecessary trouble. Rent seekers who have pets and are able to find landlords who accept pets can also increase the competitiveness of their application and landlord's acceptance by increasing the amount of rent. After all, pets have the potential to increase wear and tear on the property, and the presence of odors, hair, etc. can potentially reduce the comfort of the property for future use. For landlords, at least, this concern is not unreasonable.

g) Before and on the day of check-in

After signing the Agreement of Lease, the tenant is required to pay the first and last month's rent within 24 hours to the landlord's listed brokerage trust account to the listed brokerage trust account on behalf of the landlord. The rent is paid monthly after move-in and the last month's rent is used as a security deposit.

Before the move-in date, the tenant must purchase Tenant Insurance. This is different from the Home Insurance that the landlord purchases, which covers the tenant's personal property and liability. In particular, the liability insurance covers, for example, damage to the premises by the tenant, accidents while living in the premises, and injuries to persons. Landlords generally specify the amount of liability insurance coverage, such as one million dollars. There are many tenant insurance companies that you can compare and buy online. Coverage starts at a little over ten dollars and is very affordable.

For non-condominium properties, especially those where the landlord himself lives inside, such as when the landlord lives on the first or second floor of a detached house and the tenant lives in the basement, the lease will specify how the monthly utility bills will be shared, such as the landlord paying two-thirds and the tenant paying one-third. In the case of a whole apartment, the tenant needs to obtain the name of each business company that will rent the unit from the broker and call or open an account directly online before the move-in date. In the case of apartments, for example, the rent usually does not include any portion of utilities that are not covered by the building management fee. Management fees are the responsibility of the landlord. The portion that is covered by the management fee, such as heating, is not required for the tenant to open an account and pay the fee. The landlord usually requires the tenant to show proof that the tenant's insurance and the utility company have opened an account before or on the day of move-in.

h) On the day of arrival

If the tenant has offered to pay a deposit on the day of move-in, in addition to the first and last month's rent, then the deposit should be paid to the landlord's agent or the landlord himself on the day of the handover. The deposit can be paid by personal cheque or bank draft, as agreed by both parties, and the deposit for the key, as specified in the lease, will be paid on the same day.

In Ontario, in addition to the offer and the Ontario Real Estate Association's OREA lease, which is used by both parties when signing the lease, you will also need to sign a "Standard Form of Lease for Ontario" Residential Tenancy Agreement (Standard Form of Lease) dated 2020/12 The content of this agreement is almost the same as the OREA Lease Agreement (don't ask me why I need this one, I'm very surprised too!) ), but it is also the standard lease approved by the Landlord and Tenant Board (LTB) in the event of future disputes between the parties. So if the broker forgets, please remember to remind the TA to prepare and sign it on the same day.

Don't forget to exchange contact information with your landlord. If you need any repairs in the future, contact the building's property management company as a first step, and then contact the landlord if you cannot resolve the problem.