How to screen tenants in Ontario without breaking human rights law

The fastest way to lose money on a Hamilton rental is not a bad furnace. It is a bad tenant you approved in a hurry because the unit had been empty for six weeks and the carrying costs were eating you alive. I have seen owners hand the keys to the first person who waved a deposit, then spend nine months and several thousand dollars getting their unit back.

The second fastest way is screening that tenant the wrong way and ending up at the Human Rights Tribunal instead.

Tenant screening in Ontario sits in a narrow lane. You are allowed to be selective. You are not allowed to be discriminatory. Most landlords I talk to do not know where that line is, so they either screen too little and get burned, or screen on the wrong criteria and expose themselves. Here is how we do it across 600-plus units, and how you can do it on your own.

What the law actually lets you ask

Tenant screening in Ontario is governed by two things working together: the Human Rights Code and Ontario Regulation 290/98. The Code lists protected grounds you cannot select on. The regulation tells you which financial tools you are allowed to use.

You can request and consider, together:

• Rental history and references from past landlords
• Credit references and a credit check
• Income information (amount, source, steadiness)

The word that matters is “together.” Under Regulation 290/98 you can ask about income, but only if you also ask for credit and rental history and weigh all of it as a package. You cannot lead with income alone unless the applicant gives you nothing else to work with.

The 30 percent rule is not yours to use

This is the mistake I see most. A landlord decides rent should be no more than 30 percent of a tenant’s gross income, then rejects anyone over that ratio. That blanket rent-to-income rule is exactly what the regulation prohibits. Income is one input you consider alongside the rest, not a cutoff.

A thin credit file is not a red flag

A lack of credit history cannot count against an applicant. Newcomers, students, and young renters often have almost no file. Reject them for that alone and you are on shaky ground. Look at the full picture instead. A new arrival with a job offer letter and a guarantor is often a better bet than someone with a long credit file full of collections.

What you can never screen on

The protected grounds under the Code are not suggestions. You cannot select a tenant based on race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, marital status, family status, disability, or receipt of public assistance.

That last one trips people up. Refusing someone because their income comes from Ontario Works or ODSP is discrimination on the ground of receipt of public assistance. “I prefer working professionals” is not a policy, it is a liability. Family status is the other common slip. “This unit is better suited to a couple” when a family with kids applies is a problem, as is steering applicants with children away from upper floors.

A clean screening process you can actually run

Here is the order we use. It is defensible because every applicant goes through the same steps.

Use one application for everyone

Same form, same questions, same documents requested from every person who applies. The moment you ask one applicant for things you did not ask another, you have created a pattern someone can point to.

Get written consent before any credit check

You need informed consent before pulling a credit report. We get it in writing on the application. No consent, no check, full stop.

Verify income with documents, not vibes

Ask for recent pay stubs, a letter of employment, or a notice of assessment for self-employed applicants. You are confirming the income exists and is steady, not ranking people by how much more than the rent they earn.

Call the last two landlords, not just the current one

The current landlord might give a glowing reference to get rid of a problem tenant. The one before that has no reason to lie. Ask plain questions: did they pay on time, did they give proper notice, would you rent to them again.

Score the answers on conduct, not identity. Payment history, references, and steady income are fair game. Who the person is, where they come from, and how they fund their life are not.

What you can and cannot collect up front

This is where Ontario law is stricter than landlords expect, and where listings get companies in trouble.

You can collect a last month’s rent deposit, one month maximum for a monthly tenancy, and you owe interest on it every year at the guideline rate. You can also collect a key deposit, but only the actual replacement cost of the keys, refundable when they come back.

There is no such thing as a damage deposit in Ontario. It is not legal. If a landlord or a listing asks for first and last plus a damage deposit, that is an immediate signal the operator does not know the rules.

A Ward 3 fourplex that shows why this matters

We took over a fourplex near Barton and Sherman in Ward 3 where the previous owner had screened entirely on gut feel. He picked tenants he “had a good feeling about” and skipped credit checks and reference calls. Three of the four units were behind on rent when we inherited the building, and one tenant had been chosen over a single mother who, on paper, was the stronger applicant. That is the exact decision that turns into a human rights complaint.

We rebuilt the screening from scratch: one standard application, written consent, documented income verification, two landlord references per applicant. As units turned over we filled them at market, around $1,650 to $1,750 for the one bedrooms based on what Hamilton is doing right now, with tenants who passed a consistent, lawful process. Same effort either way. One version protects you, the other costs you.

Why this is worth getting right in 2026

Hamilton is not the landlord’s market it was three years ago. The CMA vacancy rate climbed to 3.6 percent in 2025, the highest since the pandemic, and two-bedroom asking rents are down year over year as more supply comes online. When vacancy was under two percent, the next applicant was already waiting and you could afford a fast decision. At 3.6 percent, units sit longer and the pressure to approve someone rises. That pressure is exactly when landlords cut the corners that lead to a bad tenancy or a complaint. Slower lease-up is not a reason to lower your standards. It is the reason to keep them consistent.

How we handle it at Found Spaces

Across 600-plus units in Hamilton and the surrounding area, we run every applicant through the same documented process: standard application, written consent, credit and reference checks, income verified by documents, all weighed together the way the regulation requires. We keep the records, so if a rejected applicant ever questions a decision, we can show it was based on conduct and finances, not on anything protected. We also keep listings clean: no 30 percent rules in the ad, no “professionals only,” no damage deposit.

If you are self-managing and you are not sure your screening would hold up to scrutiny, that is worth a conversation before your next vacancy, not after. Happy to walk through what we look for and where the real risk sits.