Rent Review Clause Ontario — Who Pays, Who Controls

Published 11 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty

Last updated 11 September 2026. Written by Jatin Dua, Broker of Record at RE/MAX Quantum Realty, 799 The Queensway, Etobicoke · For Ontario registrants · 9 min read

The short answer

A rent review clause in Ontario deals with a problem that survives closing: a rent review application already filed at the Landlord and Tenant Board continues in the seller’s name even after the building is sold, so the seller stays the named party while the buyer gets the benefit of the outcome. The clause library splits that into two independent variables — who pays for the application and any appeal, and who controls it. RENT/REV-1 puts both cost and control with the buyer and posts trust security against the seller’s costs exposure. RENT/REV-2 leaves the cost with the seller up to a capped amount while the buyer still controls. RENT/REV-3 obliges the seller to hand over the financial records the application needs. The amounts in the blanks are not an agent’s decision.

The liability that stays with a seller who no longer owns the building

On a multi-residential purchase with a live rent review application, the seller does not walk away clean on closing. The application was filed in their name and it continues in their name. If it goes to the Divisional Court or higher, the seller is the party who can be ordered to pay costs, on a building they sold eight months earlier, in a proceeding somebody else is now running.

That is the whole reason this small group of clauses exists, and it is why the amounts in them are meaningful rather than decorative. An agent who treats the blanks as a formality has misunderstood what is being allocated.

The flip side is equally real for the buyer. The outcome of that application affects what the building earns, and therefore what the buyer just paid for. Letting the seller control an application whose result the buyer will live with for twenty years is not a neutral choice either.

Two variables, three clauses

Once you see that cost and control are independent of each other, the category organises itself. The buyer can pay and control. The seller can pay, up to a ceiling, while the buyer still controls. And separately from both, somebody has to produce the documents the application runs on.

RENT/REV-1 (Rent Review Application Pending – Buyer to Pay/Buyer to Control) has the seller permit the pending application, and any appeal of it, to continue in the seller’s name under the buyer’s control and at the buyer’s expense — and if the fight climbs to the Divisional Court or beyond, the cost exposure at those levels sits with the buyer too. It then adds the mechanism that matters most: if an appeal is brought or defended at that level, the buyer provides the seller’s solicitor with a stated amount at each level of court, up to a stated aggregate maximum, held in trust as security for the seller’s costs exposure.

RENT/REV-2 (Rent Review Application Pending – Seller to Pay/Buyer to Control) keeps control with the buyer but has the seller cooperate in completing the pending applications and appeals at the seller’s expense, capped at a stated maximum, through to the completion of any appeal whether at the Board or in the Divisional Court.

RENT/REV-3 (Rent Review Application – Seller to Provide Financial Information and Documentation Necessary for Rent Review Application) is the housekeeping clause and it is the one most likely to be needed and least likely to be included. It obliges the seller to provide, on demand, the financial information and documents in their possession and control that the buyer needs to pursue or defend an application or appeal.

	RENT/REV-1	RENT/REV-2	RENT/REV-3
Who funds it	Buyer, including costs liability at the Divisional Court or higher	Seller, capped at a stated maximum	Not a funding clause
Who runs it	Buyer	Buyer	Not a control clause
Whose name is on the file	Seller’s, throughout	Seller’s, throughout	n/a
Security for the seller	Yes — amounts held in trust by the seller’s solicitor at each level of court, to an aggregate cap	No security mechanism in the clause	n/a
What the other party must do	Seller permits continuation	Seller cooperates in completing applications and appeals	Seller produces financial information and documents on demand
Where it gets negotiated	The per-level amount and the aggregate cap	The cap	Scope of “possession and control” and how long the obligation lasts
Who should be setting the numbers	The clients’ lawyers	The clients’ lawyers	n/a

The short version

Cost and control are separate levers. Decide each one deliberately with your client, then hand the numbers to the lawyers. An agent who fills in a trust security amount because the blank was there has made a decision they cannot defend.

The trust security is the part that needs a lawyer

RENT/REV-1’s security mechanism raises questions the clause does not answer, and that is not a criticism of the clause. It is the nature of a standard form. But you should know what the open questions are so you can flag them, because your client will not.

What triggers the payment into trust — the commencement of an appeal, or notice of one? What happens if the proceeding goes further than the parties contemplated and the aggregate cap is exhausted while the matter is live? When and on what evidence does the money come back to the buyer? Who decides whether a costs order has been satisfied? What happens if the buyer simply abandons the application after closing, leaving a proceeding in the seller’s name with nobody advancing it?

The guidance attached to these clauses points users to legal advice on the amounts involved, and that is exactly right. I will go further for my own agents: on a file with a live rent review application, the schedule should be drafted by the lawyers and reviewed by you, not drafted by you and reviewed by them.

DO NOT PICK THE NUMBERThe per-level security amount and the aggregate cap allocate real money against an exposure neither client can quantify without advice. Writing a figure into that blank because the client asked you to is not administrative assistance. It is a judgement about litigation risk, and it is not yours to make.

RENT/REV-3 and the question of what survives closing

Here is an observation worth carrying into every schedule you draft, not just this one. Several warranty clauses elsewhere in the same book carry express wording stating that the warranty survives and does not merge on completion. RENT/REV-3, as printed, does not.

An obligation to produce documents “upon demand” is, by its nature, an obligation that will be called on after closing — often long after. Whether a covenant of that kind survives completion without express survival wording is a legal question about merger, and it is not one I am going to answer here. But it is exactly the sort of thing that decides whether your buyer can actually get the rent rolls and ledgers they need in year two, and it takes one sentence from a lawyer to resolve before signing rather than one motion to resolve afterwards.

Get the current clauses out of your own OREA member copy and put that question to the lawyer with the clause in front of them. That is a genuinely valuable thing for an agent to raise, and almost nobody raises it.

The tenants’ information is not the parties’ information

The documents in play here are rent rolls, ledgers, arrears histories and financial statements. They contain information about people who are not parties to your transaction and who did not agree to any of it. The clause library flags the point by cross-referencing RENT-2, the confidentiality clause in the rental category, and on a file of any size that cross-reference should be acted on rather than noted.

The parallel from the regulatory side is instructive. In the open offer process, the number of competing written offers must be disclosed to everyone making an offer, with no consent required, but the substance of a competing offer may be shared only on the seller’s direction and must never include the offeror’s personal information or anything that identifies them. The principle is consistent: transactional information flows, personal information does not. Apply the same instinct to a rent roll you are emailing to a buyer’s broker at eleven at night.

Treat a rent roll like a competing offer

Share what the transaction requires, under a confidentiality provision, to people who need it. Do not forward tenant-level financial detail casually because somebody asked. The tenants did not consent and your client’s exposure is not limited to the deal.

Caps and allocations get enforced as written

A cap on the seller’s contribution in RENT/REV-2 is a limitation of liability. Agents sometimes assume a court will look through a cap that turns out to be badly calibrated. The direction of the Ontario authority does not encourage that assumption.

In Shiralian v. Wyldewood Creek Inc., 2026 ONCA 163, as reported, a limitation-of-liability clause in a builder’s agreement was enforced and the purchasers were limited to the return of their deposit. In Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282, as reported, relief from forfeiture was described as requiring both that the sum be out of all proportion to the damages and that forfeiture be unconscionable. That is a narrow opening, not a general fairness jurisdiction.

Neither case concerns rent review. Both say the same thing about drafting: the allocation you write is the allocation your client lives with, and it does not get rewritten later because it turned out to be a bad bargain.

Your exposure as the registrant

Commercial and multi-residential files raise a different exposure profile from a resale bungalow, and the difference is that the clients are sophisticated and the documents are long. Sophisticated clients sue.

Setting a number you cannot justify. The security amount and the caps are the obvious one. If you are asked why that figure, “it was what the last deal used” is not an answer.
Omitting RENT/REV-3. A buyer who takes control of an application and then cannot get the underlying records from the seller has a real problem, and the person who drafted the schedule will be asked why the documents clause was not in it.
Characterising the likely outcome of the application. You do not know what the Board will do, and telling a buyer what the rents will be after the decision is a projection they will rely on.
Multiple representation. These deals are often brokered by one office on both sides. Multiple representation requires written disclosure, best efforts to confirm receipt, and each client’s written consent after they receive it. The agent becomes a facilitator — no advice on offer price or negotiating strategy to either side — and the disclosure has to advise clients to obtain independent professional advice first. On a file where the whole negotiation is about allocating litigation risk, that is a serious constraint. Know it before you take the deal, not during.
Burying disclosure in the schedule. Disclosures must be distinct and separate from the representation agreement and from the agreement facilitating the transaction. A long commercial schedule is not a hiding place.
Handling tenant data casually. See above. That exposure does not end on closing.

How I want this handled

Short list, done in order, before the offer rather than during the condition period.

Establish at the listing or buyer-intake stage whether any rent review application is filed, pending or under appeal, and get the file number and the stage in writing.
Decide with your client, deliberately, who should pay and who should control — they are separate questions and the answers do not have to match.
Send the clause selection to your client’s lawyer with the facts, and let them draft the amounts, the triggers and the release mechanics.
Ask the lawyer directly whether the seller’s document obligation survives closing on the wording being used, and get the answer before signing.
Put a confidentiality provision around tenant-level financial information and follow it yourself.
Confirm your representation position and any multiple representation disclosures separately from the agreement, before any offer is accepted.

If you are working through the rest of an income property file, the tenanted property clauses and the representations and warranties post cover the adjacent ground.

Questions agents actually ask

Why does a rent review application stay in the seller’s name after closing?

Because that is who filed it. The clauses in this category are built around that fact: the seller permits the application and any appeal to continue in their name while the buyer, who now owns the building, takes over the running of it. That leaves the seller as the named party exposed to costs orders, which is why the security mechanism in RENT/REV-1 exists.

What is the difference between RENT/REV-1 and RENT/REV-2?

Who funds it. Both leave control of the pending application and any appeal with the buyer. RENT/REV-1 has the buyer pay, including costs liability at the Divisional Court or higher, and requires the buyer to post trust security with the seller’s solicitor at each level up to an aggregate cap. RENT/REV-2 has the seller bear the expense up to a stated maximum instead, with no security mechanism.

Should an agent fill in the trust security amount?

No. That figure allocates money against a litigation exposure neither client can quantify without advice, and the guidance attached to these clauses directs the parties to legal advice on the amounts. Your job is to identify that the issue exists, raise it early, and get the clients’ lawyers drafting. Filling in the blank yourself is a judgement about litigation risk you cannot defend.

Does the seller have to hand over rent rolls and financial records after closing?

RENT/REV-3 obliges the seller to provide the financial information and documents in their possession and control that the buyer needs to pursue or defend an application, on demand. Whether that obligation survives completion without express survival wording is a merger question for the lawyers. Raise it before signing — it is a one-sentence answer then and a motion later.

Can I email a rent roll to the other agent?

Carefully, and under a confidentiality provision. Rent rolls and tenant ledgers contain personal financial information about people who are not parties to your transaction. The clause library cross-references RENT-2, the confidentiality clause, for exactly this reason. Treat tenant-level detail the way you would treat the substance of a competing offer: it moves only where it has to, and never casually.

Is the cap on the seller’s contribution enforceable?

Caps and limitations of liability are generally enforced as written in Ontario, and Shiralian v. Wyldewood Creek Inc., 2026 ONCA 163 is a recent reported example of a limitation clause being upheld. Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282 sets a narrow test for relief from forfeiture. Assume your client gets the bargain written down, and have the lawyers calibrate the number.

The clause checklist I make my own agents use

A one-page pre-submission check for conditions and schedules — the dates, the notice route, and the eight things that get missed. Built for Ontario agents. Free, and there is no drip campaign behind it.

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Handling income property files without support?

Multi-residential deals allocate risk that outlives closing, and the schedules deserve more than a quick read. Every agreement my agents write is reviewed before it goes out, and on files like these I want the lawyers drafting and my agent asking the right questions. Worth a conversation if you are doing this alone.

Book a 15-minute call or call or text 833-330-1925.

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Rent Review Clauses in Ontario: Who Pays and Who Controls