A few weeks ago, I realized that we are soon approaching the end of our tenant's 1-year lease agreement.
So I investigated what our options are when a lease expires.
The tenant and the landlord can negotiate a new contract with a fixed term. But the landlord cannot force the tenant into a new contract. So if no agreement is reached by the last day of the existing lease, then the lease automatically converts to a month-to-month agreement. The only thing I'm a little unclear about, is what happens if the existing tenant wants to stay, but the landlord wants them to leave. Is that considered a lack of agreement, and therefore conversion to month-to-month? Or does the landlord have the right to force the tenant out? Ontario law generally favours the tenant, so I'm not sure about those circumstances.
Anyway, I presented the option to my tenant as:
- We could start a brand new fresh 1-year lease agreement, in which case we would not increase the rent over that period.
- We can switch to a month-to-month lease, but we do have the right to raise the rent at any point now.
- He can leave, but we would require 60 days notice. Even if he's leaving at the end of our agreed 1-year lease term, he would still have to state his intent to not stay.
The tenant's response is that he thinks he'll stay 6 months to a year, so the best option for him is to switch to month-to-month.
So far, we've been very happy with this tenant, and we'd be happy to have him stay. Since he's thinking he might stay up to a year, I'm debating offering him $10 or $20/month off his current rent if he does sign another 1-year lease? This way, I'm not stuck finding a new tenant in the middle of next winter, and he saves a little off his rent. The way rents are increasing in that neighbourhood, I imagine that the discounted rent would be one of the best prices he can find in the area.
I haven't presented this offer to him yet, but I'll let you know if I do!