How Can Tenants Break a Lease Early in Ontario?

While the Ontario Residential Tenancies Act provides many safeguards for tenants, there are few protections when a tenant wants to break their lease early. When paying rent monthly in Ontario, landlords must be provided with 60 days notice to terminate a lease, and the termination date cannot precede the expiry of the lease agreement. Occasionally, landlords may be agreeable to ending a lease with 30 days notice if a tenant is renting month to month. However, if a tenant is only partly through their fixed term lease or providing far less than 60 days notice, breaking the lease early can be further complicated, with most financial risk and repercussions falling unto the tenant themselves.

The Legality of Ending a Lease Early

A lease agreement is a legally binding contact, primarily verifying a tenant's commitment to monthly rental payments at a property for a specified period of time. As with any other legally binding contract, there are few exit strategies. Landlords in Ontario maintain a legal right to hold a tenant responsible for all rental payments until the end of the lease term, unless…

1. The Landlord and Tenant Mutually Agree to End the Tenancy Early

Tenants are advised to speak with their landlord in these instances. The simplest case scenario occurs when the landlord also agrees to end the tenancy early and presents the tenant with an N11 (Agreement to End the Tenancy Early) form. However, landlords will typically reject this request and may suggest the following option.

2. The Landlord Agrees to Find a Replacement Tenant

While this involves more risk for the tenant, a landlord may agree to re-list the property and find a replacement tenant. Firstly, the tenant will need to submit an N9 (Notice to End the Tenancy) form with 60 days notice. The termination date will either be the end-date of the lease or 60 days from the last day of the rental period, if renting on a month to month basis. Risk is involved due to the fact that the tenant will be responsible for all rental payments up until the date the replacement tenant takes occupancy. Further, the landlord may charge additional early termination fees. The ideal scenario is when a replacement tenant is found within a few weeks. However, there is always the possibility that it could take the remainder of the tenant's notice period before they are relieved of their rental obligations. Depending on the rental market, landlords may risk vacancy as well if the search exceeds the notice period. If a replacement tenant is found before the termination date though, an N11 can be signed, thereby terminating the lease.

3. The Tenant Assigns Their Lease

The task of finding a replacement tenant can also be assumed by the tenant. A tenant may assign their lease to another individual, transferring all rental obligations unto the assignee. However, a landlord is allowed to reject a prospective assignee. If a tenant's referral does not financially qualify for the property, has a history of rent non-payment or property damage, or presents other concerns that do not breach Canada's Human Rights Act, the landlord may reject the rental application.

4. The Tenant is a Victim of Domestic Abuse

If a tenant is a victim of domestic violence, they may end their lease early with 28 days notice. Afterward, the tenant cannot be held responsible for any further rental payments or early termination fees. If it is a joint tenancy, the remaining co-tenant will be responsible for all rental obligations going forward. The tenant will need to provide an N15 (Tenant’s Notice to End Tenancy Because of Fear of Sexual or Domestic Violence and Abuse) form, in addition to a court order (e.g. restraining order or peace bond) or a Tenant's Statement About Sexual or Domestic Violence or Abuse that has been signed and dated. If this notice is given, a landlord must uphold confidentiality. They may not share the contents of these records with any co-tenants, and if re-listing the property, the rental property cannot be identifiable from its advertisement.

5. The Ontario Landlord Tenant Board (LTB) has ordered early termination of the lease

A landlord must ensure their rental property is habitable. If they are not supplying vital services or otherwise not maintaining health and safety standards, a tenant may apply to the LTB to terminate the tenancy early. Once the LTB has issued such an order, the lease will be terminated and the tenant will not be responsible for any further rental obligations.

Conclusion

Undoubtedly, there are few legal ways for a tenant to break a lease early in Ontario. Outside of extreme situations, the landlord will need to explicitly agree to do so or approve of an assignee. Not only can this cause stress for both the landlord and tenant, but financial risks are a factor as well. With an experienced property management team though, both parties can rest assured knowing early lease terminations are handled adeptly. Our property managers work quickly to liaise between tenants and landlords, list rental properties, and find new tenants, if necessary. In doing so, property managers can ensure a lesser degree of stress and financial risk for both landlords and tenants alike.