Condo Rental Rules Ontario: A Complete Guide for Condo Landlords

Owning a condo as an investment property in Ontario comes with a unique set of challenges that do not apply to freehold landlords. You are not just a landlord; you are also a unit owner bound by your condominium corporation's governing documents. Your tenant must follow the condo's rules, and you are on the hook if they do not.

This guide covers everything you need to know about renting out a condo in Ontario, from legal requirements to practical management tips.

The Legal Framework: Two Sets of Rules

The Residential Tenancies Act (RTA)

Your relationship with your tenant is governed by the RTA, just like any other residential tenancy in Ontario. The Ontario Standard Lease is required, rent deposit rules apply, and eviction must follow the proper process through the Landlord and Tenant Board.

The Condominium Act, 1998

Your relationship with the condo corporation is governed by the Condominium Act and your specific corporation's declaration, bylaws, and rules. These documents can impose additional requirements and restrictions on rental activity.

When these two sets of rules conflict, the situation can get complicated. Generally, the RTA governs the landlord-tenant relationship, while the Condo Act governs the owner-corporation relationship. But in practice, you need to comply with both.

Can Your Condo Corporation Restrict Rentals?

This is the most common question condo investors ask. The answer depends on what type of restriction it is and where it appears in the condo's governing documents.

Restrictions in the Declaration

The condo declaration is the most powerful governing document. It is registered on title and is essentially the condo's constitution. If the declaration includes rental restrictions (such as a minimum lease term, a cap on the percentage of rented units, or a prohibition on short-term rentals), these are generally enforceable.

Common declaration-based restrictions include:

• Minimum lease terms (often 6 or 12 months)
• Prohibition on short-term rentals (Airbnb-style)
• Caps on the total number or percentage of rented units in the building
• Requirement to use the condo corporation's standard lease addendum

Restrictions in the Rules

Condo rules are easier to pass than declaration amendments and can address reasonable concerns about rental activity. Rules might include requirements like providing the condo corporation with tenant contact information, ensuring tenants receive a copy of the rules, or requiring a security deposit key fob.

Rules cannot be unreasonable or inconsistent with the declaration or the Condo Act.

The 2017 Condo Act Amendments

Amendments to the Condominium Act that came into effect in 2017 and subsequent years strengthened condo corporations' ability to deal with problem tenants and non-compliant owners. Key provisions include:

• Condo corporations can require owners to provide tenant information
• Corporations can seek compliance orders directly
• Enhanced powers to deal with dangerous or disruptive behaviour

Your Obligations as a Condo Landlord

Notify the Condo Corporation

Most condo corporations require you to notify them when you rent out your unit. This typically involves:

• Providing the tenant's name and contact information
• Providing a copy of the lease (some corporations require this)
• Paying any applicable registration fee (typically $100 to $200)

Provide Condo Rules to Your Tenant

You are required under the Condo Act to give your tenant a copy of the condo's declaration, bylaws, and rules. In practice, most landlords provide the rules and a summary of key declaration provisions. Ensure your tenant understands and agrees to follow them.

Ensure Tenant Compliance

This is the big one. You are responsible for your tenant's compliance with the condo's governing documents. If your tenant violates the rules (noise complaints, improper garbage disposal, unauthorized use of common areas), the condo corporation comes after you, not the tenant.

If you cannot get your tenant to comply, you may face:

• Fines from the condo corporation
• Legal costs charged back to your unit
• Compliance orders from the Condominium Authority Tribunal (CAT)
• In extreme cases, a court order requiring you to sell your unit

Pay Condo Fees

Condo fees (common expenses) are your responsibility as the unit owner, not the tenant's, unless your lease specifically passes them through (which is unusual for residential tenancies). Ensure you budget for condo fee increases when calculating your rental property's financial performance.

Common Condo Rule Issues with Tenants

Move-In and Move-Out

Most condos have specific procedures for moving in and out, including booking elevators, paying refundable move-in deposits, and using designated loading areas. Communicate these to your tenant well in advance.

Noise

Condo living means shared walls, floors, and ceilings. Most condos have quiet hours (typically 10 PM to 8 AM) and rules about hard flooring (some require 70% to 80% carpet or rug coverage to reduce noise transmission). Make sure your tenant knows these rules.

Parking and Storage

Parking spots and storage lockers are often separate from the unit on the condo's property register. Ensure your lease clearly identifies which parking and storage is included and communicates any rules about vehicle types, sizes, or storage of prohibited items.

Renovations and Modifications

Tenants cannot make modifications to a condo unit without both your permission as the landlord and the condo corporation's approval (if the modification affects common elements or the building structure). Make this clear in your lease.

Pets

As discussed earlier, the RTA voids no-pet clauses in residential leases. However, a pet restriction in a condo declaration (registered before the unit was first occupied) is enforceable. If your condo has a no-pet rule in its declaration, inform your tenant before they sign the lease. This is one situation where you can legitimately restrict pets.

Insurance for Condo Landlords

Condo landlord insurance differs from standard landlord insurance because the condo corporation's master insurance covers the building structure. Your insurance needs to cover:

• Unit improvements: Any upgrades beyond the standard unit finishes (countertops, flooring, fixtures)
• Liability: Protection against claims arising from incidents in your unit
• Loss of rental income: If the unit becomes uninhabitable due to an insured event
• Deductible gap coverage: If a claim triggers the condo corporation's master policy, you may be responsible for the corporation's deductible, which can range from $10,000 to $100,000

The deductible gap is a significant and often overlooked risk for condo owners. A tenant who causes a water leak that affects multiple units could result in you being charged the corporation's entire insurance deductible.

Financial Considerations Specific to Condos

Condo Fee Increases

Condo fees can increase annually, and special assessments can be levied for major repairs. Unlike freehold properties where you control the maintenance budget, condo expenses are partly outside your control. Budget for annual increases of 3% to 5% and maintain a reserve for special assessments.

Reserve Fund

Review the condo corporation's reserve fund study before purchasing. An underfunded reserve means future special assessments are likely. The reserve fund study is a public document that unit owners can request.

Status Certificate

Before buying a condo as an investment, always review the status certificate. It reveals the corporation's financial health, pending lawsuits, rule violations, and planned special assessments. Have your lawyer review it carefully.

Tips for Successful Condo Rental Management

• Build a relationship with the property manager: The condo's property manager is your first point of contact for issues. A good relationship makes everything smoother
• Attend AGMs: Annual general meetings give you a voice in how the corporation is run and advance notice of upcoming changes
• Screen tenants carefully: A problematic tenant in a condo creates more issues than in a freehold because of the shared living environment
• Include condo rules as a lease schedule: Attach the condo rules to your lease and have the tenant sign acknowledging receipt
• Respond to compliance notices immediately: If the condo corporation contacts you about a tenant issue, address it promptly. Ignoring it escalates quickly

Final Thoughts

Renting out a condo in Ontario can be profitable, but it requires more attention to rules and compliance than freehold rental properties. Read your condo's declaration and rules thoroughly before purchasing, factor all condo-specific costs into your financial analysis, and communicate clearly with your tenant about what is expected. The landlords who succeed in the condo rental space are the ones who treat the condo corporation as a partner, not an adversary.