Residential Lease Clauses in Ontario and What the RTA Overrides

Last updated 11 September 2026. Written by Jatin Dua, Broker of Record at RE/MAX Quantum Realty, 799 The Queensway, Etobicoke · For Ontario registrants · 10 min read

The clause that does nothing, signed by two people who think it does something

A landlord client calls in November. The tenant has a dog, the lease says no pets, and the landlord wants to know how fast the tenant can be out. Or the tenant has been smoking on the balcony and the lease calls that a material breach. Or the rent was supposed to go up in year two by the percentage written into the schedule, and the tenant has just told the landlord the number is wrong.

In each of those calls the landlord is holding a document somebody drafted for them, and the document is not going to produce the outcome they were promised. Sometimes the agent promised it explicitly. More often the agent said nothing and let the clause imply it, which from a liability perspective is not much better.

Two documents, and the one that governs

On a residential file you are usually producing an agreement to lease, and then a tenancy is created under the standardized lease Ontario requires for most private residential tenancies. Those are different documents doing different work, and the clause library you are drawing from has to be read with that in mind.

The guidance attached to the maintenance clause in this category is explicit about exactly this point: for residential leasing, obligations you want the tenant to perform belong in a separate agreement rather than inside the standardized lease. That is not a stylistic preference. It reflects that the standard form is the standard form, and material you bolt onto it is treated differently from material inside it.

Underneath both documents is the Residential Tenancies Act. You cannot contract out of it, and a term inconsistent with the Act does not become effective because both parties signed. The temptation in a competitive rental market is to draft a schedule giving the landlord everything they asked for. That schedule does not make the landlord safer — it makes their position at a hearing worse, and it puts your name on the drafting.

What the clauses in this category actually do

Read as a group, the residential lease clauses do three honest jobs. They record what is included and in what condition. They allocate who pays for what. And they set out a small number of mechanical processes — a credit condition, a renewal notice, a right of first refusal — with dates and notice requirements attached. Everything else in the category is either a conduct term whose enforcement runs through the Board, or a statement of an obligation the Act already governs.

Pull the current clauses from your own OREA member copy before you use any of them. I am describing what they do, which is not the same as reproducing what they say, and the wording moves between revisions.

The credit check condition and the obligation nobody mentions

LEASE/RES-1 (Condition – Credit Check) works the same way the purchase conditions do. It is for the landlord’s benefit, it runs to a stated time on a stated day, it requires positive written notice that the condition is fulfilled, and if that notice does not arrive the offer to lease ends and the deposit goes back to the tenant. It also records the tenant’s consent to the investigation being carried out.

The part that surprises agents sits in the consumer reporting rules rather than in real estate regulation. Where a landlord declines to grant a lease because of information in a consumer report, the landlord has obligations: to tell the applicant that the refusal was based on information received from a consumer reporting agency or another person, and on the applicant’s written request within the window the legislation allows, to disclose the nature and source of that information.

You are not the landlord and those obligations are not yours. But you are the person the landlord will ask, and “I don’t know, ask your lawyer” is a better answer than the confident wrong one. Do not compose the refusal letter for them.

Rent increases: the number you write is not the number they get

LEASE/RES-8 (Increase in Rent) records an agreed percentage taking effect in the second year of the lease. The guidance attached to it makes the limit plain — the figure inserted must not carry the rent above what is legally permitted.

Whether a particular unit is subject to the annual guideline, when an increase may take effect, and what notice has to be given are not questions an agent should be answering for a client. They depend on the unit and on the rules in force, and getting them wrong produces an increase that is not collectible and a landlord who believes you told them otherwise.

What I want my agents to do is narrow. Write the number the parties agreed on. Say in writing to the landlord that whether it is collectible depends on rules you do not administer, and point them at the Board’s published material and their own lawyer. Then stop talking.

Conduct clauses, entry, and what “material breach” is worth

LEASE/RES-12 (Pets) is the clause I use to teach this, because of what it leaves out. It puts the cost of pet damage and end-of-term carpet cleaning on the tenant. It does not prohibit pets. Whoever drafted it knew exactly what they were doing, and the agent who adds “no pets permitted” underneath is drafting into one of the most litigated areas in Ontario tenancy law. If a landlord wants a prohibition, that goes to their lawyer.

LEASE/RES-19 (Tenant Shall Not Smoke) and LEASE/RES-18 (Tenant Cannabis Restriction) both characterise contravention as a material breach and grounds for termination. Those words describe the landlord’s position, not a remedy. A residential tenancy in Ontario is ended through the process the Act sets out, and where the tenant does not agree, at the Landlord and Tenant Board. A landlord who reads “grounds for termination” as “I can change the locks” is about to create a much larger problem, and you should say so before they sign.

LEASE/RES-14 (Showing of Rental Property) records the tenant’s agreement to entry for showings to prospective buyers, tenants, mortgagees and insurers on the notice the Act requires, and to a sign on the property. Note what it does: it points at the statutory notice requirement rather than replacing it. If you are listing an occupied unit for sale, that clause is not your entry plan — the tenanted property clauses and the notice rules are.

The fee hiding in the first right of refusal

LEASE/RES-17 (Tenant’s First Right of Refusal) is the most commercially significant clause in the category and the one most agents scan past. It gives the tenant a window to submit an offer matching a bona fide offer the landlord is willing to accept, requires the landlord to give the tenant written notice and a copy of that offer, and obliges the landlord to accept the tenant’s matching offer if it arrives in time. It also carries a brokerage fee payable if the tenant exercises the right.

That last part is remuneration, and remuneration has rules. Under RECO’s guidance on remuneration clauses in an agreement, effective 17 January 2024, five components have to be addressed: the parties, the purpose, the amount and whether taxes are included, the timing, and who pays and who receives. A number written into a blank without those elements is not a complete remuneration provision.

There is a second rule that bites here. Disclosures must be distinct and separate from the representation agreement and from the agreement that facilitates the transaction. A remuneration disclosure that exists only inside a schedule is not doing what the rule requires. And brokerages must not agree with a self-represented seller to provide assistance or to charge or collect remuneration at all — worth remembering, because a landlord exercising a right of first refusal years later may no longer be represented by anyone.

Your exposure as the registrant who drafted it

Leasing files generate complaints out of proportion to their size, and the reason is that both sides are often unrepresented on one leg of the transaction and the money involved feels small enough that nobody gets a lawyer.

• Telling a landlord what a clause will achieve. “This gets them out” is the sentence to never say. It predicts an outcome at a tribunal you do not appear before.
• Drafting prohibitions on your own initiative. If the clause library does not prohibit something, there is usually a reason. Adding the prohibition yourself is drafting into contested ground without advice.
• Advising an unrepresented tenant or landlord. Under TRESA you confirm the person intends to proceed without representation, deliver and explain the RECO Information Guide and the Information and Disclosure to Self-Represented Party form, state plainly that you act for your client and not for them, and make reasonable efforts to get written acknowledgement. You must not advise them on price, terms or clauses. Explaining to an unrepresented tenant what a smoking clause means for them is advising them on a clause.
• The Information Guide misconception. The RECO Information Guide must be given and explained before you provide services to a client or assistance to a self-represented party, but there is no statutory requirement to obtain an acknowledgement for the Guide itself. The written acknowledgement requirement attaches to the self-represented party form. Agents get this backwards constantly.
• Advertising the restrictions. A misleading statement is one that causes someone to have a wrong idea or impression, and it does not matter that not everyone was misled. Be careful what your listing says about who may live there and under what conditions.
• Losing the notice. Lease conditions run on dates and require delivery in the manner the agreement specifies. In High Tower Homes Corp. v. Stevens, 2014 ONCA 911, as reported, a waiver sent by fax where personal delivery was required was ineffective. The notice provision governs.

How I want residential leases handled

Nothing here is difficult. It is a matter of doing a smaller job properly rather than a larger job badly.

1. Decide what each clause is for — recording what is included, allocating a cost, or running a dated process — and delete anything that is doing none of those three.
2. Keep tenant maintenance obligations out of the standardized lease and in a separate agreement, as the guidance on that clause directs.
3. Write the agreed rent increase figure and nothing more, with a written note to the landlord that collectibility depends on rules you do not administer.
4. Never characterise a conduct clause as an eviction remedy, in writing or in conversation.
5. Treat any brokerage fee inside a lease clause as a remuneration provision — all five components, disclosed separately, and flagged to your brokerage.
6. Serve every notice the way the agreement says notice is served, and keep proof.

If you are moving between residential and commercial leasing, the drafting freedom is genuinely different and the habits do not transfer — the commercial lease clauses post covers where that line sits.

Questions agents actually ask

Related reading

• Buying a Tenanted Property in Ontario: Rent Warranties, Notices and the Shortfall Adjustment
• Well and Septic Conditions in Ontario: Approvals, Warranties and the Inspection Most Agents Skip
• Assuming a Tenancy in Ontario: Single Units, Multiple Units and the Documents You Need
• Changing the Completion Date in Ontario: The Clause, the Consent and the Deadline Risk
• Green Energy Clauses in Ontario: MicroFIT Contracts, Solar and Wind Turbine Warranties
• Every clause and condition guide in one place

This is professional commentary from a Broker of Record on drafting practice for Ontario residential lease clauses. It is not legal advice. The Residential Tenancies Act governs residential tenancies and questions about enforceability, termination and a landlord’s or tenant’s rights belong with a lawyer or the Landlord and Tenant Board. This is general professional commentary from a Broker of Record on drafting practice. It is not legal advice, it is not a substitute for your own brokerage’s policies, and it does not create any professional relationship. Clause codes refer to OREA’s Guidelines for Residential and Commercial Clauses, an OREA member resource — the clause wording itself is OREA’s and is not reproduced here. Always work from your brokerage’s approved forms, and send your client to a lawyer for anything turning on interpretation, enforceability or remedy. Legislation, regulator guidance and case law all change; verify anything you are relying on.