In Ontario, a landlord cannot unilaterally raise the rent or charge excessive sublet fees when a tenant temporarily sublets their unit. Under the Residential Tenancies Act, landlords are only permitted to charge reasonable “out-of-pocket” administrative expenses, such as a $25 to $50 CAD credit check fee.
When a tenant needs to leave town for a few months-perhaps for a co-op term, a temporary job posting, or extended travel-they often choose to sublet their apartment to avoid breaking their lease. 🏠 For landlords in cities with high turnover, like Waterloo, London, and Kingston, receiving a sublet request can feel stressful. Many property owners mistakenly believe this is an opportunity to raise the rent to current market rates or charge the tenant a “subletting tax.”
However, the Residential Tenancies Act (RTA) heavily protects a tenant’s right to sublet. Attempting to raise the rent or charging arbitrary fees is considered an illegal act. In this guide, we will clarify exactly what you can and cannot charge when your tenant decides to sublet their unit in Ontario as of May 2026, ensuring you stay compliant and avoid massive LTB fines.
Step-by-Step Process for Handling a Sublet Request
As a landlord, you cannot unreasonably refuse a sublet, nor can you alter the terms of the original lease. 📋 Here is the legally compliant process for evaluating and approving a subtenant in Ontario.
Step 1: Receive the Formal Sublet Request
The process begins when your original tenant asks for permission to sublet. A true sublet means the original tenant intends to return before the lease expires. If they are leaving forever, that is an “assignment,” which has different rules.
You have the right to ask for the prospective subtenant’s name, income details, and references. 🔍 You must respond to the tenant’s request within 7 days. Ignoring the request or refusing it without a valid, objective financial reason is considered “unreasonable withholding of consent.”
Step 2: Calculate Reasonable Administrative Expenses
You cannot charge a flat $500 “sublet fee” or raise the monthly rent by $200. Section 134 of the RTA explicitly states that landlords can only charge for actual, reasonable out-of-pocket expenses incurred during the subletting process.
If you use a third-party service to run a credit check or background check on the subtenant, you can pass that exact cost (usually $25 to $50 CAD) back to your original tenant. 💰 You must provide a receipt proving the expense. Charging for your own “time and labour” to review an application is generally not permitted.
Step 3: Communicate the Allowed Fees
Inform your original tenant in writing about the screening costs before you run the checks. Say: “I consent to reviewing the subtenant’s application. Please note there is a $35 credit check fee, which is a permitted out-of-pocket expense under the RTA.”
Never threaten to raise the base rent. 🚨 The subtenant steps into the shoes of the original tenant for the duration of the sublet, meaning the rent amount, parking fees, and utility inclusions remain exactly the same.
Step 4: Draft a Sublet Agreement
While the subtenant pays rent to the original tenant (who then pays you), it is wise to have a written acknowledgement of the sublet. This document should clearly state the start and end dates of the sublet period.
Remember, your legal contract remains with your original tenant. ⚔ If the subtenant burns the kitchen down or stops paying rent, you will file an LTB application against your original tenant, who is strictly liable for their subtenant’s behaviour.
How Much Does Subletting Cost in Ontario?
Subletting should not be a profit centre for the landlord, nor should it cost the landlord money. 💵 Here is what the financial breakdown looks like:
- Credit and Background Checks: Usually costs between $20 and $55 CAD. This is the most common fee legally passed on to the tenant.
- Condo Administrative Fees: If your unit is in a Toronto condo, the building’s property management may charge a move-in/move-out fee or a fob programming fee (often $100 to $250 CAD). This is a hard expense that can also be passed to the tenant.
- Illegal Charges: Key deposits exceeding the actual cost of a key, flat “convenience fees,” or forced rent increases are strictly illegal and can result in the tenant filing a T1 application for a rebate.
| Action | Legal for Landlord? | Potential LTB Penalty |
|---|---|---|
| Charging a $35 Credit Check Fee | Yes (with receipt) | None. |
| Raising Rent by $100 for the Sublet | No (Strictly illegal) | Rebate of illegal rent + Administrative fines. |
| Refusing Sublet because of “Hassle” | No (Unreasonable refusal) | Tenant can file Form A2 at the LTB to obtain an order authorizing the sublet. |
How Long Does the Process Take?
Time is of the essence when dealing with sublet requests. ⏱ Once the tenant provides you with the prospective subtenant’s application, you are expected to review it and respond within 7 days.
If you delay or ignore the request, the LTB may deem your silence as an unreasonable refusal. A standard sublet period can last anywhere from one month to the remainder of the lease term, provided it ends before the original tenant’s lease officially terminates.
Frequently Asked Questions (FAQ)
Can the original tenant charge the subtenant more rent than they pay me?
No. Under the Residential Tenancies Act, a tenant is strictly forbidden from charging a subtenant more rent than the tenant currently pays the landlord. Subletting cannot be a profit-making enterprise for the tenant.
Who is responsible if the subtenant stops paying rent?
The original tenant is 100% responsible. Your contract is with the original tenant. If rent is missed, you serve an N4 Notice of Eviction to the original tenant. It is their responsibility to manage and collect funds from their subtenant.
Can I meet the subtenant before approving them?
Yes, you have the right to request a meeting, view their references, and perform a credit check. However, your criteria for accepting them must be exactly the same as your standard criteria for any normal tenant. You cannot hold them to an unreasonably higher standard.
What happens if the original tenant doesn’t come back?
If the sublet agreement expires and the subtenant refuses to leave while the original tenant abandons the property, the subtenant becomes an “unauthorized occupant.” You must file an A2 Application with the LTB within 60 days to have them legally evicted.
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