There are several legal steps to take when a tenant breaks a lease early in Ontario. This can be a very irritating situation for landlords, who may also lose on the financial side as their potentially vacant space does not rent out until it can be re-leased. In response to an early lease termination, every landlord is suggested to follow the steps outlined in this guide.
Understanding Lease Breaks
What is a Lease Break?
A lease break refers to a tenant’s decision to end their rental agreement before the date indicated in the lease and without any legal basis. In the province of Ontario, tenants are subject to the lease terms up until the lease expires unless otherwise mutually agreed to and only for specific situations.
Legal Reasons for Lease Breaks
Tenants are legally allowed to break a lease early in Ontario if the tenant is a victim of sexual or domestic violence, to be admitted to a care home, or if the landlord fails to provide legal requirements in terms of providing a livable habitation for tenants.
Steps After A Lease Break
1. Look Through the Contract
The starting point is to inspect your rental agreement to ascertain what the terms and conditions of early termination are. There will be a process for terminating it early, penalties or both that you need to comply with. This, in turn, influences your course of action and may assist in defining the legal framework of what comes next.
2. Talk To The tenant
Sometimes talking things over can save a situation before it becomes problematic. Engage your tenant about their reasons for breaking a lease, then think about any practical compromises like subleasing or finding someone else to take over the tenancy who would help minimize financial losses.
3. Formal Notice
Should the tenant choose to terminate the lease, a formal notice must be served acknowledging the lease termination and any obligations or penalties emanating from the lease contract. Additionally, this notification should also have an estimated date of moving out.
4. Minimize Damages
According to Ontario laws, a landlord is required to minimize damages by trying to re-rent the property at the earliest opportunity. You must also ensure that you do not lose money by searching for another resident and keeping such records.
5. Legal Action
Suppose there were economic losses and tenants refused to pay. Then it would be wise to consult a lawyer, who will help you get back unpaid rent and other amounts involved in litigation. A legal action should only be considered after exhausting all other options and upon advice from an attorney at law.
Mitigating the financial impact
Financial effects
This will include loss of rent, advertising to find another tenant, and attorney’s fees. Knowing how much it may cost you will help you make a wise decision on what could be done—either negotiating a settlement with the tenant or proceeding with legal action against him.
Security Deposit Usage
Review the terms under which you can use the security deposit. The most common usage is for damages to your property, but in most instances, it doesn’t cover lost rent, unless covered in the lease.
Managing Emotional and Professional Dynamics of Lease Breaks
Handling Tenant Interactions with Professionalism
One of the most emotionally stressful experiences for landlords is having to address a lease break, especially when it is unexpected. The most important thing is to maintain a professional attitude when communicating with the tenant.
The more empathetic you are while maintaining a professional attitude in expressing your expectations and lease terms, the better you can handle the situation. Ensure all communication is documented because, if it is needed, it will be very important in court disputes or, should legal action become necessary.
Use Mediation Services
At times, direct negotiations reach an impasse. In such situations, using professional mediation services can be of help. It will enable the parties to agree on a satisfactory settlement and thus avoid more formal legal proceedings. A mediator is an expert in the field of conflict resolution, which makes him or her capable of coming up with workable solutions that may be beyond the minds of a landlord or a tenant.
Other Legal Issues
Knowing the Tenant’s Rights
Landlords should be fully aware of tenant rights when they are ending the lease term. This is to avoid facing any form of litigation by the tenants due to violation of the rental law. For example, tenants have rights under the rental laws of Ontario, and any move to try and bypass those rights will cause the landlord to be disadvantaged in the legal arena.
Better Preparation for Future Lease Agreements
The experience of how to break a lease should be used to improve future leasing agreements. These agreements should have detailed provisions that indicate what might happen in the event of a lease break, the time or period of notice required and any financial obligations or penalties associated. A referral to a lawyer is recommended when these details are drafted. This will ensure that these provisions are effective and conform to the rental laws of Ontario.
When a tenant breaches a lease early, landlords must understand where they stand and what steps must be taken legally to handle the situation professionally. By following these steps, you will minimize both the legal and financial consequences of breaking a lease.