Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. It may not be up to date. Laws change often and without notice. If you need legal advice with respect to a residential sublet agreement or sublease contract, you should seek professional assistance (e.g. make a post on Dynamic Legal Forms). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to help you. You can also contact me directly.
This is the first of a series of blogs I’m writing about residential sublet agreement or sublease contracts. In this blog, I’ll be talking about what residential sublet agreements are and how this relationship differs from a residential lease agreement.
What is a residential sublease agreement?
A Residential Sublease Agreement is a private contract between a Tenant (a person who leases the rental unit from the Landlord) and a Sub-Tenant (a person who wishes to occupy the rental unit and pay rent to the Tenant). So the idea is simple. The Tenant leases the rental unit from the Landlord pursuant to a Residential Lease Agreement. Then the Tenant vacates the rental unit and gives the Sub-Tenant the right to OCCUPY the rental unit pursuant to a Residential Sublease Agreement. Importantly, the term of the subtenancy MUST END before the Tenant’s term or period ends under the Residential Lease Agreement. After the subtenancy ends, the Tenant has the right to resume occupancy of the rental unit.
In addition to the written agreements, the lease and sublease relationships are governed by the Residential Tenancies Act, 2006 (“Act”). The Act came into effect on January 31, 2007 and is designed to set the rules for most residential rental housing in Ontario. The Act says a number of things about subletting. First, a Tenant may sublet a rental unit to another person ONLY WITH the Landlord’s consent: section 97(1). A Landlord cannot arbitrarily or unreasonable withhold consent: section 97(2). They must have a good reason for doing so. Indeed, a tenant may apply (within 1 year) to the Ontario Landlord and Tenant Board (“Board”) for an order determining that the Landlord has arbitrarily or unreasonable withheld such consent: sections 98(1) and (2). If the Board finds that the Landlord has done so, it can order that the sublet be authorized (among other things) and even establish terms and conditions of the sublet: section 98(3) and (4). Finally, if and when the Tenant has sublet the rental unit to another person, the Tenant still remains entitled to the benefits, and is liable to the Landlord for the breaches, under the Residential Lease Agreement or the Act during the term of the subtenancy: section 97(4)(a). The same thing goes for the Sub-Tenant: they are entitled to the benefits, and liable to the Tenant for the breaches, of the Sub-Tenant’s obligations under the Residential Sublease Agreement or the Act during the term of the subtenancy: section 97(4)(b).
Do Sub-Tenants have the same rights and obligations as Tenants?
At first glance, one might assume that Sub-Tenants have the same rights and obligations vis-à-vis Tenants as Tenants have vis-à-vis Landlords. But this is a weak argument. The definition of Tenant under the Act does not include a Sub-Tenant. A “Tenant” is defined under section 2 to include a person who pays rent in return for the right to occupy a rental unit and includes that person’s heirs, assigns, and personal representatives. Granted, a “Subtenant” could be included in this definition, but the government did not expressly say so. Rather, the government defined a “Subtenant” under section 2 as someone whom a Tenant gives the right to occupy a rental unit.
So the Subtenant is not the same as the Tenant. This is reflected in the Act. For example, a Sub-Tenant has NO right to occupy the rental unit after the end of the subtenancy: section 97(5). This differs from a Tenant, who can continue to occupy the rental unit vis-à-vis the Landlord after the end of the tenancy: if a Residential Lease Agreement for a fixed term ends and has not been renewed or terminated, then the Act deems that Agreement to simply continue on the same terms and conditions: section 38. Indeed, the Act says that, if a Sub-Tenant continues to occupy a rental unit after the end of the subtenancy, the Landlord or Tenant may apply to the Board for an order EVICTING the Sub-Tenant: section 101(1). So this is a clear example of how a Sub-Tenant does not have the same rights as a Tenant.
Do Tenants have the same rights and obligations as Landlords?
Some might also assume that a Tenant might have the same rights and obligations as a Landlord vis-à-vis the Sub-Tenant as Landlords have vis-à-vis Tenants. But, again, this is a weak argument to make. The definition of Landlord under the Act does not include a Tenant in the context of a sublease. A “Landlord” is defined under section 2 to include the owner of a rental unit or any person who permits occupancy of a rental unit OTHER than a tenant who occupies a rental unit a residential complex and who permits another person to also occupy the unit or any part of the unit. In a Board matter (File Number TSL-20232-RV), it was held that:
14. In other words a tenancy agreement is formed between a tenant and a landlord but tenants cannot be landlords under the Act. Rather, the Act defines “subtenant” as a person to whom a tenant gives the right to occupy by way of an authorized sublet agreement.
In another Board matter (File Number TST-02765), it was held that a Tenant did not have all the same rights and obligations as a Landlord in the context of a sublease. The Board reasoned as follows:
8. Now an argument could be made that the definitions of “tenant” and “landlord” in subsection 2(1) of the Act are so broad that they could include…head tenants. I say this because essentially a “tenant” is defined as a person who pays rent in return for the right to occupy a rental unit and a landlord is someone who permits occupancy of a rental unit.
9. The difficulty I have with this argument is that if the legislature intended the definitions of “tenant” and “landlord” to be read to include…head tenants, then section 99 of the Act would be completely unnecessary. I believe it is a general rule of statutory interpretation that an Act should be read so that its provisions have meaning. Section 99 is the provision which clearly says which sections of the Act apply to head tenants who want to evict their authorised sub-tenants. If the definition of “landlord” was read to include head tenants, then section 99 would be redundant as all of the provisions concerning a landlord’s right to evict a tenant would apply. Section 99 indicates that they do not, which means that the legislature intended the word “landlord” to be interpreted in a way so as not to include head tenants, even where the sub-tenancy is authorised by the landlord.
Section 99 says that the Tenant has the same rights as a Landlord in certain situations. For example, if the Sub-Tenant has not paid rent, the Tenant may give the Sub-Tenant notice of termination and may apply to the Board for an eviction order. But the Tenant’s rights do not include all of a Landlord’s right, only some of them. Therefore, a Tenant is generally not a Landlord in the context of a sublease.
This legal form can be used by a Tenant to rent out their rental unit. This agreement requires all 3 parties (Landlord, Tenant, and Subtenant) to sign. The Landlord consents to the . You need to read the DL Guide to know what is and isn’t legal with respect to residential subleases. For example, did you know that the Tenant cannot charge more to the Sub-Tenant than what the Landlord is charging the Tenant? Also, did you know that there is no overholding period with respect to the Sub-Tenant (i.e. after the term or period of sub-tenancy expires, the term or period is not automatically renewed – unlike with a regular lease agreement!). Sub-Tenants are not necessarily equal under the law to Tenants.
Here’s the sample Video Guide that comes with this Residential Sublease Agreement:
A Landlord can use this Agreement to rent out a residential unit. This Agreement comes with a Rental Application. All of Dynamic Legal Forms‘ legal forms are lawyer-prepared, simple to read, easy to customize, and only a fraction of the price a lawyer would charge. Also, each legal form comes with a FREE VIDEO GUIDE (watch a useful example of how this legal form can be customized), a FREE DL GUIDE (read helpful information about this legal form), and another FREE DL GUIDE that sheds valuable insight into how legal forms can be challenged. What are you waiting for?
This information and this sample video guide is NOT legal advice and is provided for informational purposes only. If you need an Ontario lawyer, go to Dynamic Legal Forms and make a post.