Month-to-Month Lease Ontario usually starts automatically once a fixed-term lease ends, often after one year. This type of lease renews every month without needing a new agreement unless either landlord or tenant gives proper written notice.
Governed by the Residential Tenancies Act, it protects both parties with set rules on rent increases, notice periods, and termination reasons. Landlords can raise rent once per year with 90 days’ notice and must follow legal steps to end tenancy validly. While flexible for landlords who want adaptability, this lease type may bring unpredictability in income and requires careful management to avoid disputes.
What Is a Month-to-Month Lease in Ontario?
In Ontario, a month-to-month lease begins automatically when a fixed-term lease ends and no new agreement is signed. Instead of drafting a new contract, the original lease simply continues on a monthly basis. This arrangement provides flexibility for both tenants and landlords. Rent is still due monthly, typically on the same date as it was during the fixed-term lease. The terms of the original lease remain in effect, except for the duration, which now operates on a month-to-month basis. This type of lease is known as a periodic tenancy under Ontario law.
Under a month-to-month lease, either the tenant or the landlord can end the tenancy by giving proper written notice. The notice must follow the guidelines set out in the Residential Tenancies Act (RTA). For tenants, this usually means providing 60 days’ notice before the end of a rental period. Landlords must meet stricter requirements to terminate the lease, including valid reasons and longer notice periods.
Importantly, tenants under a month-to-month lease are fully protected by the RTA. This includes rules for rent increases, eviction procedures, and maintenance responsibilities. Landlords cannot raise rent without following the legal process, which includes providing 90 days’ notice and adhering to the government’s annual rent increase guidelines.
Landlord Rights Under a Month-to-Month Lease Ontario
In Ontario, landlords managing month-to-month leases have specific rights under the Residential Tenancies Act (RTA). These rights are balanced by clear rules on notice, documentation, and legal compliance.
Rent Increase
Landlords can raise the rent, but only once every 12 months. To do so legally, they must provide tenants with at least 90 days’ written notice using the official government form. The increase must also follow the annual guideline set by the province unless an exception applies.
Ending the Tenancy
A landlord can end a month-to-month lease, but not without cause. Valid reasons under the RTA include using the unit for personal or family use, selling the property where the new owner needs to move in, or tenant issues like repeated late payments or property damage.
To end the lease, the landlord must serve the correct notice form:
- N12 for personal use or sale requiring vacant possession
- N13 if the property is being demolished or converted
- N5 for tenant violations
All notices must be in writing, signed, and properly delivered. Most terminations require at least 60 days’ notice, aligned with the rental period.
Access to the Rental Unit
Landlords are allowed to enter the unit for specific reasons, including repairs, inspections, or showing the unit to potential buyers or new tenants. They must provide 24 hours’ written notice, stating the reason, date, and time of entry, and visits must take place between 8 a.m. and 8 p.m.
Dispute Resolution
If tenants dispute a notice or termination, the matter can be taken to the Landlord and Tenant Board (LTB). The LTB handles hearings, mediates disputes, and ensures both parties are following the law. Landlords must be prepared to justify their notices with documentation.
Record Keeping
To stay protected legally, landlords should keep detailed records of all tenant communications, rent payments, and notice forms. Proper documentation helps in case of a dispute and ensures compliance with the RTA.
How to End a Month-to-Month Lease Properly in Ontario
To end a month-to-month lease in Ontario correctly, landlords must follow the Residential Tenancies Act (RTA) rules closely. First, provide the tenant with a written notice using the specific RTA form that matches your reason for ending the tenancy, such as N12 for personal use or N13 if the property is being sold.
This notice must be given at least 60 days before the lease termination date, and it should be timed to arrive before the next rent payment is due to be valid. The notice can be served in person, by mail, or through other methods accepted by the RTA, but informal or verbal notices don’t count and can cause legal delays. Always keep copies of the notice and proof of delivery, like a signed receipt or mail tracking, to protect yourself if disputes arise.
Remember that the RTA only allows specific reasons to end a tenancy, so you must ensure your notice complies with these rules. If unsure, consult the Landlord and Tenant Board or seek professional legal advice to avoid mistakes. During the notice period, tenants retain their right to stay in the unit until the date the tenancy ends, so respect their rights to avoid potential conflicts. Using the correct process not only ensures compliance but also helps maintain a professional relationship and reduces the risk of delays or legal challenges in ending the lease.
Tips for Managing Month-to-Month Tenants Effectively
Managing month-to-month tenants in Ontario requires a proactive and legally informed approach. These types of tenancies offer flexibility, but they also call for careful attention to detail and consistent communication to avoid issues down the road.
Communicate Clearly and Regularly
Start the tenancy with clear expectations. Make sure tenants understand rent due dates, payment methods, and key lease terms. Maintain open communication throughout the tenancy to quickly resolve any concerns before they grow into larger problems.
Review Rent Annually
You can raise the rent once every 12 months, but you must provide a written 90-day notice using the proper RTA form. Scheduling regular rent reviews helps you keep up with market rates while staying compliant with the law.
Schedule Inspections with Proper Notice
Regular inspections help maintain the condition of the property and show tenants that you’re attentive. Always give at least 24 hours’ written notice, stating the reason, date, and time, in line with the Residential Tenancies Act.
Respond Quickly to Maintenance Requests
Handling repair requests promptly improves tenant satisfaction and reduces the risk of costly emergency repairs. It also lowers turnover and encourages tenants to stay longer, even in a flexible month-to-month arrangement.
Document Everything
Keep detailed written records of rent increases, inspection notices, maintenance requests, and tenant communication. Documentation is essential if a dispute arises or if you need to present evidence before the Landlord and Tenant Board.
Use Written Addendums for Lease Updates
If any lease terms change during the tenancy, such as updates to pet policies or utilities, always put them in writing. A signed addendum protects both you and the tenant and helps avoid confusion or legal issues later on.
Offer Incentives for Longer Commitments
While month-to-month leases are flexible, you can still encourage longer stays. Offering small perks, like a rent discount or minor upgrade, may motivate tenants to commit to a longer-term lease.
Address Lease Violations Promptly
Monitor tenant behavior and act quickly if there are issues like late payments, noise complaints, or property damage. Use the appropriate legal notice, such as Form N5, to ensure your response is both effective and compliant.
Stay Updated on Legal Requirements
Ontario’s rental laws can change, so it’s important to stay informed. Regularly check updates to the Residential Tenancies Act and consult professional resources to ensure your management practices stay compliant.
Deciding Whether to Keep Tenants on Month-to-Month Leases
When deciding if you should keep tenants on a month-to-month lease in Ontario, it’s important to consider your long-term plans and how they align with your rental goals. If you plan to sell the property soon or move back in, month-to-month leases offer valuable flexibility, allowing you to regain possession with proper notice without waiting for a fixed term to end. However, if you prefer steady, predictable income, fixed-term leases usually provide more financial stability since tenants commit to staying for a set period.
Evaluating your tenants is also key. Reliable tenants who want longer-term stability might prefer fixed leases, which can reduce turnover and the administrative work of frequent notices. On the other hand, if tenant reliability is uncertain or your market has high demand, month-to-month leases can let you respond quickly to changing conditions.
You should also weigh the administrative side. Month-to-month leases renew automatically, which can save time, but they require you to be ready for more frequent communication and notices. Fixed terms give you more control but mean signing new agreements regularly. Consulting a property manager can help you analyze the financial and legal impact of each choice based on your property’s history and local market trends.
Remember, month-to-month leases carry a higher risk of tenant turnover but are easier to end legally when needed. Aligning the lease type with your overall rental strategy, whether it’s maximizing income, minimizing hassle, or keeping flexibility, will guide you to the best decision for your situation.
How Found Spaces Supports Your Month-to-Month Lease Management
Found Spaces provides landlords with expert guidance to navigate the complexities of month-to-month leases in Ontario while staying fully compliant with the Residential Tenancies Act (RTA). We help in preparing and serving the correct legal notice forms, which helps avoid common disputes related to lease termination or rent increases.
We handle rent collection with care and consistency, making sure payments are processed on time and 90-day rent increase notices are issued correctly. Our thorough tenant screening process helps reduce turnover and prevent issues before they start, giving you peace of mind and more stable tenancies.
Clear communication and proper documentation are essential in managing short-term tenancies. We make this easy by streamlining tenant interactions, tracking notices, and organizing all relevant records; so you stay in control without getting bogged down in admin.
We also coordinate regular property inspections and maintenance, keeping your unit in good condition while ensuring tenant satisfaction. When it’s time to end a tenancy, we guide you through the right legal steps to avoid costly errors and protect your investment.
Beyond the day-to-day, Found Spaces offers smart strategies to maximize rental income while maintaining the flexibility month-to-month leases provide. We keep you informed about changes in tenancy laws, helping you stay ahead and fully compliant.
Managing a month-to-month lease doesn’t have to be stressful. Book a call with Found Spaces today and discover how we can simplify your rental management while protecting your time, property, and bottom line.
Frequently Asked Questions
1. What happens if either a tenant or landlord wants to end a month-to-month lease in Ontario?
Either the tenant or landlord can end a month-to-month lease by giving proper written notice. The notice period depends on who wants to end it, usually 60 days for tenants and landlords, but specific reasons may adjust this time frame.
2. Can the rent amount change in a month-to-month lease without a fixed term?
Yes, the landlord can increase rent for a month-to-month lease, but they must provide at least 90 days’ written notice before the increase takes effect, following Ontario’s rent increase guidelines.
3. Are there any differences in tenant rights with a month-to-month lease compared to a fixed-term lease in Ontario?
In many ways, tenants have similar rights under both leases, such as maintenance and privacy. However, month-to-month leases offer more flexibility to end the arrangement but may also result in more frequent changes in lease conditions.
4. How does a month-to-month lease affect renewal compared to a fixed-term lease in Ontario?
A month-to-month lease automatically continues each month without needing renewal unless either party gives notice to end it. This contrasts with fixed-term leases, which require renewal agreements or move-outs at the end of the term.
5. What should tenants do to ensure their month-to-month lease is legally valid in Ontario?
Tenants should have a written agreement outlining the terms of the month-to-month tenancy, keep copies of all communications with the landlord, and know their rights under Ontario’s Residential Tenancies Act to avoid misunderstandings.
