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Difference between revisions of "Tenancy Agreements (19:II)"
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Tenancy Agreements (19:II) (view source)
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== '''B. General''' == | == '''B. General''' == | ||
The “leasehold” or tenancy interest is an estate (a bundle of property rights) of limited duration, which is created and acquired by the “tenant” when a person capable of granting that interest does so. Such a person (usually called the owner or landlord) conveys to the tenant the right of “exclusive possession”. The interest that the landlord retains is called the “reversion” because full possession reverts back to the landlord on the termination of the tenancy. | The “leasehold” or tenancy interest is an estate (a bundle of property rights) of limited duration, which is created and acquired by the “tenant” when a person capable of granting that interest does so. Such a person (usually called the owner or landlord) conveys to the tenant the right of “exclusive possession”. The interest that the landlord retains is called the “reversion” because full possession reverts back to the landlord on the termination of the tenancy. | ||
The landlord can sell their reversion to someone else, who becomes the new landlord and property owner. The tenancy follows the property, not the initial owner, so a tenancy agreement is still binding on a new owner, who is responsible for repaying the initial security and/or pet damage deposit when the tenancy ends (RTA, s 93). | The landlord can sell their reversion to someone else, who becomes the new landlord and property owner. The tenancy follows the property, not the initial owner, so a tenancy agreement is still binding on a new owner, who is responsible for repaying the initial security and/or pet damage deposit when the tenancy ends (RTA, s 93). | ||
=== 1. Two Methods of Creating a Tenancy Relationship === | === 1. Two Methods of Creating a Tenancy Relationship === | ||
:'''a) By Formal Contract''' | |||
'''a) By Formal Contract''' | |||
A tenancy interest is granted by a contract known as a tenancy agreement or lease. Often the parties will enter into an express agreement The executed tenancy agreement governing the tenant’s possession may be written, or oral, or both (see the s 1 definition of “tenancy agreement”). To be enforceable, the elements of a complete contract (offer, acceptance, and consideration) must be present (see Chapter 11: Consumer Protection). | A tenancy interest is granted by a contract known as a tenancy agreement or lease. Often the parties will enter into an express agreement The executed tenancy agreement governing the tenant’s possession may be written, or oral, or both (see the s 1 definition of “tenancy agreement”). To be enforceable, the elements of a complete contract (offer, acceptance, and consideration) must be present (see Chapter 11: Consumer Protection). | ||
:'''b) By Implied Contract''' | |||
'''b) By Implied Contract''' | |||
Every tenancy agreement entered into on or after January 1, 2004 must be prepared in writing by the landlord (''RTA'', s 13(1)). | Every tenancy agreement entered into on or after January 1, 2004 must be prepared in writing by the landlord (''RTA'', s 13(1)). | ||
Notwithstanding this obligation to prepare the agreement in writing, where a tenant is already in possession of the unit, or where rent has been paid, the law may imply the existence of a valid tenancy agreement This type of rental agreement is quite common because many tenancies are entered into on the basis of an application form, or verbal consensus, without the existence of any written contract. A “tenancy agreement” may be found to exist, even when: | Notwithstanding this obligation to prepare the agreement in writing, where a tenant is already in possession of the unit, or where rent has been paid, the law may imply the existence of a valid tenancy agreement This type of rental agreement is quite common because many tenancies are entered into on the basis of an application form, or verbal consensus, without the existence of any written contract. A “tenancy agreement” may be found to exist, even when: | ||
:a) there is no written tenancy agreement; | |||
a) there is no written tenancy agreement; | :b) a previously existing agreement has expired or terminated; or | ||
:c) there was no previous agreement of any kind. | |||
b) a previously existing agreement has expired or terminated; or | |||
c) there was no previous agreement of any kind. | |||
If the person in possession pays rent or a deposit and the landlord accept the payment with the intention of creating a tenancy, an agreement is created–it can be deemed to have come into effect even before a tenant assumes occupancy. | If the person in possession pays rent or a deposit and the landlord accept the payment with the intention of creating a tenancy, an agreement is created–it can be deemed to have come into effect even before a tenant assumes occupancy. | ||
=== 2. Where Something Other than a Tenancy is Created === | === 2. Where Something Other than a Tenancy is Created === | ||
A person who enters into an agreement with a landlord to rent accommodation does not always create a tenancy. Depending on specific circumstances and context, such a person may not be a tenant, but instead may be a mere occupant. | A person who enters into an agreement with a landlord to rent accommodation does not always create a tenancy. Depending on specific circumstances and context, such a person may not be a tenant, but instead may be a mere occupant. | ||
An occupant or person in possession who is not a tenant has no agreement with the landlord concerning that possession or occupation. In the case of a licensee or occupant living in a home by permission of the main tenant (when the landlord/owner lives off-site), the main tenant is responsible for all obligations, including paying rent (and utilities if required). If the licensee or occupant is sharing a kitchen or bathroom with the landlord, the parties can seek remedies in Small Claims Court. | An occupant or person in possession who is not a tenant has no agreement with the landlord concerning that possession or occupation. In the case of a licensee or occupant living in a home by permission of the main tenant (when the landlord/owner lives off-site), the main tenant is responsible for all obligations, including paying rent (and utilities if required). If the licensee or occupant is sharing a kitchen or bathroom with the landlord, the parties can seek remedies in Small Claims Court. | ||
=== 3. Formal Requirements of the Agreement === | === 3. Formal Requirements of the Agreement === | ||
A landlord must prepare in writing every tenancy agreement entered into on or after January 1, 2004 (RTA, s 13(1)). A tenancy agreement must comply with any requirements prescribed in the regulations and must set out all the requirements in RTA s 13(2). | A landlord must prepare in writing every tenancy agreement entered into on or after January 1, 2004 (RTA, s 13(1)). A tenancy agreement must comply with any requirements prescribed in the regulations and must set out all the requirements in RTA s 13(2). | ||
Where these elements are absent, vague, or unclear, the agreement may be void (as a result, no interest would be created). However, if the tenant is in possession and has paid money (i.e. rent) then there is a tenancy agreement. If a tenancy has been created (i.e. the tenant has possession and is paying rent), vague terms of the tenancy agreement may be framed in the tenant’s favour using the principle of contra proferentem (i.e. the agreement will be strictly construed against the party seeking to rely on the contract), and principles of statutory interpretation. The law seeks to recognize and validate the relationship where possible, even where the requirement to have a written tenancy agreement has not been met. | Where these elements are absent, vague, or unclear, the agreement may be void (as a result, no interest would be created). However, if the tenant is in possession and has paid money (i.e. rent) then there is a tenancy agreement. If a tenancy has been created (i.e. the tenant has possession and is paying rent), vague terms of the tenancy agreement may be framed in the tenant’s favour using the principle of contra proferentem (i.e. the agreement will be strictly construed against the party seeking to rely on the contract), and principles of statutory interpretation. The law seeks to recognize and validate the relationship where possible, even where the requirement to have a written tenancy agreement has not been met. | ||
=== 4. Agreements for Lease (Also Known as Agreements to Lease, or Agreements for Tenancy) === | === 4. Agreements for Lease (Also Known as Agreements to Lease, or Agreements for Tenancy) === | ||
Landlords may occasionally attempt to have potential tenants enter into “agreements to lease”, whereby they agree, by paying some amount now, to enter into a lease at a later date. In accordance with the provisions of s.15 of the RTA: application, holding, consideration, administration or other fees are not permitted. If a tenant gives a landlord a sum of money after negotiating in relation to a rental unit, the most likely legal outcome is that the parties have created a tenancy, and the amount paid is considered either a security deposit and/or rent. | |||
Landlords may occasionally attempt to have potential tenants enter into “agreements to lease”, whereby they agree, by paying some amount now, to enter into a lease at a later date. In accordance with the provisions of s.15 of the RTA: application, holding, consideration, administration or other fees are not permitted. If a tenant gives a landlord a sum of money after negotiating in relation to a rental unit, the most likely legal outcome is that the parties have created a tenancy, and the amount paid is considered either a security deposit and/or rent. | |||
== '''C. Contractual Nature of the Tenancy Agreement''' == | == '''C. Contractual Nature of the Tenancy Agreement''' == | ||
