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So many renters breaking their rental agreement and leaving early.

ducati0000

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I heard from a real estate friend that there is a huge spike in renters leaving before their rental agreement is completed,has any condo landlords experience this themselves.
 

UserNameToronto

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I haven't heard anything like this - can you elaborate?

The rental market in Toronto has been tight for the past few years, and rental rates have gone up quite a lot. Here's a May/13 CBC report: http://www.cbc.ca/news/business/story/2013/05/14/business-condo-rentals.html

My experience: I increased rent by 26% when I signed new tenants 1.5 years ago. If they were to leave, I'd be able to raise it at least another 10%.
 
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harry_fine

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Most people here have not read the Residential Tenancies Act. Look at s.88. If a tenant leaves with notice not in accordance with the Residential Tenancies Act, their obligation to pay rent continues until such time as they would be required to pay rent had they given proper notice. This applies to short notice (less than 60 days) or unsatisfied lease term.

Any tenant is allowed to leave when they want (absent the passing of laws bringing back slavery) and when they leave, the landlord MUST attempt to re-rent the unit, and they cannot enforce the unsatisfied lease term if they don't first attempt to re-rent. If they attempt to re-rent and find a tenant, and suffer no rental loss, they cannot double-collect. If they attempt to re-rent and they lose one month, they can only go to Small Claims Court and sue for a month. Not worth it.

So the law actually allows and supports lease breaking. Problem is, Realtors don't understand the Residential Tenancies Act, which is why I teach at 7 different real estate boards, CPD course, in residential landlord and tenant law. If you want more general info, read my blog at www.landlordsolutions.ca.

For a landlord TERM IS NOT YOUR FRIEND.
 

UserNameToronto

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I was told by my agent that tenants who usually signs a 12 month contract decides to end it say a few months early and literally just walks away from the agreement and puts a stop on the posted cheques.Yes its a contract but its not worth chasing them through small claims to force them to pay up.I know one of my neighbours is evicting a tenant at her condo for non payment also,landlord and tenant board is so pro tenant it may take months to evict him if he knows how to play the system.
Three thoughts:

1) Are tenants leaving early more often now (as the thread title suggests)? If so, why?
2) If the tenants leave a 12 month contract at month 8, wouldn't the landlord just keep the last month's deposit and re-rent the property? Then couldn't the landlord theoretically collect 13 months rent in a 12 month period?
3) Given yearly rent increases are often capped, and the rental market is hot, wouldn't it be great for the landlord if the tenants walk away, so they can re-rent at a higher rate to new tenants?
 

harry_fine

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Let me deal with question #3. Most rents in condos built in Toronto are not subject to rent control, they are exempt pursuant to s.6 of the Residential Tenancies Act and landlord can raise the rent, annually, to anything they want.
 

harry_fine

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Not sure what you mean by that - can you elaborate?
Lease term benefits the Tenant more than the Landlord under Ontario law. There is no legal requirement the a lease provides for term. It can be month to month from day one if the parties agree. I'm not really suggesting doing that since term morally (but note legally) obligates the Tenant to stay for the term. But never have more than a one year lease term, and when it expires, stay month to month, don't renew term.
 

js97

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Let me deal with question #3. Most rents in condos built in Toronto are not subject to rent control, they are exempt pursuant to s.6 of the Residential Tenancies Act and landlord can raise the rent, annually, to anything they want.
Um.. I thought they could only raise them by the suggested amount (inflation) if a tenant is already living. but no rent controls after they move out?)
 

UserNameToronto

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Um.. I thought they could only raise them by the suggested amount (inflation) if a tenant is already living. but no rent controls after they move out?)
Depends on when the building was constructed. Condos built in Ontario after 1998 are not subject to rent controls (though many people assume the inflation-rent increase limit applies universally). http://www.truecondos.com/toronto-condos-rent-control-secret/
 

Kenny

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Um.. I thought they could only raise them by the suggested amount (inflation) if a tenant is already living. but no rent controls after they move out?)
Nope. There are controls for apartments/condos occupied before November, 1991. Raise it to whatever you want - you just have to give 90 days notice.
 
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harry_fine

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Nope. There are controls for apartments/condos occupied before November, 1991. Raise it to whatever you want - you just have to give 90 days notice.
Not quite that simple. You need to use an Landlord and Tenant Board approved form (the N2 form), serve it at least 90 days prior, the effective date of the increase must be the first day of a rental period, and the effective date of the increase must be at least a year since the last increase or since the tenant moved in.
 

UserNameToronto

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We're really splitting hairs on the minutae of if a landlord can raise rent beyond inflation (answer: yes, sometimes, depending on building age and subject to due process).

Is there any truth to the original poster's assertion that "many" tenants are now breaking their contracts early?
 

James

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I'm not sure how this statistic is tabulated or reported therefore I would probably say that anyone making these assertations are probably doing so on a very small sample size and/or personal perception.
 

rbt

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Is there any truth to the original poster's assertion that "many" tenants are now breaking their contracts early?
Maybe. It's probably common amongst student rentals where they sign a 1 year lease but are only in the city for 9 months.

With vacancy rates under 1% and rents increasing by another 10% over this year it doesn't hurt the landlord all that much. TREB listed 1 Bedrooms with no parking are up $25 from May.
 

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