Under the Ontario RTA, a landlord cannot arbitrarily or unreasonably deny a tenant’s right to sublet their unit. However, a landlord retains the absolute legal right to reject a specific applicant if they have reasonable, objective grounds, such as a terrible credit score, insufficient income, or a history of evictions.
Subletting is a massive part of the rental market in Ontario, particularly in vibrant university towns like Waterloo, Kingston, and major economic hubs like Toronto. Tenants frequently need to leave their apartments temporarily-perhaps for a summer internship, a long vacation, or a brief work relocation-and they want someone else to cover their rent while they are away. As a landlord, this can be incredibly stressful, as you are suddenly forced to trust a complete stranger with your valuable property.
Many landlords mistakenly believe they can simply say “No sublets allowed” and put that clause into their lease. In Ontario, any lease clause banning subletting is legally void and completely unenforceable. However, this does not mean you must accept just anyone. The Residential Tenancies Act (RTA) provides landlords with specific legal mechanisms to protect their investments by thoroughly vetting the incoming subtenant. In this guide, we will outline exactly how you can legally refuse a problematic sublet applicant without violating provincial law. 📍
Step-by-Step Process in Ontario
When a tenant approaches you with a request to sublet, you must act reasonably and follow a standardized screening process. Arbitrary refusals can lead to LTB fines or the tenant breaking the lease entirely without penalty. Generally, consulting a property management paralegal is wise if you intend to reject an applicant.
Step 1: Receive the Formal Sublet Request
First, verify that the request is actually a sublet. A true sublet means the original tenant is leaving temporarily but absolutely intends to return before the end of their lease. If the tenant is leaving permanently and wants to transfer the lease to someone else forever, that is an “assignment,” which has slightly different legal rules. 📄
The tenant must formally request your permission to sublet the unit to a specific individual. You cannot refuse the general concept of subletting, but you can insist that the tenant provides the prospective subtenant’s application details for your review.
Step 2: Screen the Applicant Thoroughly
You have the legal right to screen the proposed subtenant exactly as rigorously as you would screen a brand-new tenant off the street. You can ask the original tenant to provide the applicant’s credit report, employment letters, pay stubs, and references from previous landlords.
It is vital that your screening process complies with the Ontario Human Rights Code. You cannot reject an applicant based on race, religion, gender, or family status (e.g., having children). Your assessment must be entirely based on their objective financial ability to pay the rent and their history as a reliable renter.
Step 3: Provide a “Reasonable” Refusal
If the applicant’s credit score is 500, they have no verifiable income, or their previous landlord reports that they destroyed an apartment, you have incredibly strong, reasonable grounds to refuse them. 🚫
You must inform your original tenant in writing of your refusal and explicitly state your objective reasons. For example, write: “I am refusing this specific applicant because their income-to-rent ratio is insufficient, and they have a documented history of LTB evictions.” Do not simply say “I don’t like them,” as that is strictly considered an arbitrary refusal.
Step 4: Handle LTB Disputes if Necessary
If you refuse an applicant and the tenant believes your refusal was unreasonable or arbitrary, the tenant can file an A2 Application with the Landlord and Tenant Board (LTB).
At the LTB hearing, the adjudicator will review your reasons. If the LTB decides you were unreasonable, they can legally force you to accept the subtenant, or they can allow the original tenant to terminate the lease completely without any financial penalty.
How Much Does it Cost in Ontario?
Managing a sublet request is mostly an administrative task, but you have the right to recover specific expenses related to the vetting process. 💰
- Subletting Fees: Under the RTA, it is strictly illegal to charge a tenant a flat “sublet fee” or a penalty. However, you are legally permitted to charge the tenant for your actual, out-of-pocket expenses (usually $20 to $50 CAD) incurred while running credit checks or processing the paperwork.
- Paralegal Defence: If the tenant takes you to the LTB for an arbitrary refusal, hiring a paralegal to defend your decision will cost roughly $1,000 to $1,500 CAD.
| Reason for Refusal | Is it Legal in Ontario? | LTB Vulnerability |
|---|---|---|
| Applicant has terrible credit/no income | Yes (Reasonable) | Very Low |
| Applicant has poor landlord references | Yes (Reasonable) | Low |
| Landlord “doesn’t want students” | No (Arbitrary/Discriminatory) | Extremely High |
| Landlord wants to raise the rent instead | No (Illegal Motivation) | Extremely High |
How Long Does the Process Take?
The RTA requires landlords to act promptly. Once a tenant presents a specific sublet applicant, you must generally provide your decision within 7 to 14 days.
If you simply ignore the request or fail to answer within a reasonable timeframe, the LTB may view your silence as an arbitrary refusal, which grants the tenant the legal right to submit a Notice of Termination (Form N9) to break their lease with only 30 days’ notice.
Frequently Asked Questions (FAQ)
Who is responsible for the rent during a sublet?
The original tenant remains 100% legally and financially responsible to you. If the subtenant stops paying rent or smashes a window, you do not pursue the subtenant. You serve the eviction notices directly to the original tenant and hold them completely liable for the damages.
Can the tenant charge the subtenant more rent than they pay me?
Absolutely not. Under the Ontario RTA, it is strictly illegal for a tenant to sublet a unit for an amount greater than the lawful monthly rent they are currently paying to the landlord. Subletting cannot be used to run a profit-making business.
What if the tenant sublets the unit without asking me?
If a tenant moves out and moves someone else in without seeking your permission, it is an illegal, unauthorized sublet. You can immediately file an A2 Application with the LTB to evict the unauthorized occupant. You have strictly 60 days to file this from the moment you discover the unauthorized person.
Can I just tell the tenant “No” before they even find an applicant?
No. You cannot issue a blanket refusal for subletting. You must allow the tenant to seek out an applicant. You only have the legal right to refuse the specific person they present to you, based on reasonable and objective financial grounds.
Leave a Reply