Ontario’s housing regime is one of the most tenant-protective in North America. Non-resident landlords who own rental property in Ontario are often surprised that their assumptions regarding agreements with tenants, eviction protocols, and delegation to property managers simply do not apply.

 

This guide outlines the key considerations for foreign landlords managing Ontario residential property from outside of Ontario.

 

Ontario’s Residential Housing Framework

  1. A Property Manager is Not a Legal Shield

Hiring a local property manager does not transfer legal responsibility under Ontario’s Residential Tenancies Act (“RTA”). Even where a third party handles day-to-day operations — collecting rent, communicating with tenants, and/or arranging repairs, for example — the landlord remains legally responsible for compliance with the RTA. If something goes wrong, it is the owner, not the property manager, who will ultimately be accountable.

  1. A Statutory System 

There are significant limits to what landlords and tenants may agree to by contract. The RTA generally supersedes anything that is agreed upon between the parties, verbally or in writing. Informal arrangements between landlords and tenants carry little, if any, legal weight.

For foreign landlords accustomed to greater flexibility, this is often the most significant adjustment.

  1. The Role of the Landlord and Tenant Board

Nearly all disputes concerning the rental unit must go through the Landlord and Tenant Board (“LTB”), a specialized administrative tribunal.

Ontario landlords cannot evict tenants (even for the landlord’s personal use, and even where the tenant has breached the terms of their lease agreement) without a formal order from the LTB.

 

Among other aspects of residential tenancies, the LTB deals with:

  • A tenant’s non-payment of rent;

  • Property damage;

  • Personal use evictions; and

  • Planned demolition, property conversion, or major renovations to their rental unit.

Note that the LTB operates by its own procedures, timelines, and evidentiary rules. Something as simple as using the wrong notice form can delay enforcement or even result in dismissal of a request. For foreign landlords, this is one of the most critical aspects of managing Ontario property from abroad.

  1. Rent Control

Most residential units in Ontario are subject to rent control; meaning, the rent may only be increased by limited amounts established in the annual government-issued guidelines. 

 

Furthermore, any rent increase must comply with statutory notice requirements: Landlords must provide tenants with at least 90 days’ written notice using the correct LTB form, and increases can only occur once every 12 months. Attempting to charge more, or increasing rent without proper notice, may result in an LTB order to refund the overcharge.

 

Understanding the rent control rules is essential to planning rental income and avoiding inadvertent violations of Ontario landlord-tenant laws.

 

Pre-Rental Tenant Screening

  1. Within Legal Limits

Since Ontario is so tenant-protective, careful tenant screening before entering into any lease agreement is a crucial risk-management tool for all landlords. Tenant screening must, however, comply with both the RTA and the Ontario Human Rights Code (the “Code”). Here are a few guiding principles to keep in mind:

  • You may request information reasonably related to a tenant’s ability to pay rent and comply with the tenancy; and

  • You may not discriminate on the basis of one of the Code’s 17 protected grounds (i.e., family status, nationality, religion, or disability).

In short, your screening criteria must be applied across all applicants in a consistent manner.

 

Landlords are permitted to use third-party services for tenant screening, provided they comply with the applicable Canadian laws. Landlords must obtain written consent from applicants before conducting credit checks, for example, and inform applicants about what information is being collected, for what purpose, and which third parties will have access to it. It is the landlord’s responsibility to ensure that the screening vendors they use comply with privacy and security regulations.

 

Finally, Ontario human rights law expects landlords to assess applications holistically, with multiple sources of information; discouraging “cut off rules” like automatically excluding those with income below a certain threshold, or those who have been evicted in the past.

  1. Record Keeping

Foreign landlords should ensure that all applications, screening documents, and consents are retained and organized. Communications with applicants should be in writing. This way, decisions can be explained objectively if challenged before the LTB or the Human Rights Tribunal of Ontario.

 

Tax Concerns for Foreign Landlords

 

Ontario landlords who live outside of Canada are generally considered non-residents for Canadian tax purposes. This triggers certain tax obligations, including:

These obligations exist regardless of whether the property is profitable; regardless of whether rent is being consistently collected.

 

Conclusion

 

Prolonged vacancies or disputes with delayed enforcement may carry financial implications that are not always accounted for at the outset. Ontario housing and human rights law, Canadian tax rules, and other corporate considerations overlap. Where a landlord resides outside of Canada but owns residential rental property in Ontario, a coordinated approach is key to managing Ontario property.