What Exactly is a Residential Lease Agreement?
A residential lease agreement, commonly referred to as a rental contract or simply a lease, is a binding agreement between a landlord and a tenant that outlines the terms and conditions for renting residential property. The Alberta Residential Tenancies Act (the "Act"), which governs residential tenancies in Alberta, helps regulate the rights and responsibilities of landlords and tenants to support harmonious residential communities throughout the province.
The Act delineates the types of leases that are covered in the semantically titled Regulations Respecting Residential Tenancies. In short, the Regulations clarify that any written agreement to lease between a landlord and a tenant is, in most cases, a residential lease agreement under the Act. Any written residential lease agreement must meet the requirements of the Act and the Regulations to be enforceable.
Essentially, residential lease agreements regulate the relationship between a tenant and a landlord by specifying each party’s obligations while living in or after leaving the premises . A residential lease agreement under the Act is a contract that contains numerous implied terms. By virtue of the Act, a landlord and a tenant must follow the implied terms regardless of whether they are explicitly mentioned in the residential lease agreement itself. For example, the Act codifies what constitutes "reasonable" notice for the following: The day-to-day activities of tenants and landlords are also covered by the Act; for example, it states that a reasonable timeline for minor repairs, such as changing a light bulb, is no more than seven (7) days from when the tenant requests the repairs be made. Some basic requirements of a residential lease agreement under the Act include the legal names of the parties, the possession date, rent amount and payment frequency, and the length of the tenancy if it’s defined. The Regulations also require a residential lease agreement to contain provisions for the following:
Important Elements of an Alberta Lease
When entering into a residential lease in Alberta, it is imperative that all essential elements are addressed and included. Such items are required to be in written leases and failure to include such elements could result in negative consequences for the landlord.
The following are some of the key components that must be included in a residential lease agreement.
Tenant and Landlord
The tenant and landlord must be identified. This means the full name of the tenant(s) and landlord (business name or full name) must be included in the agreement.
Measurement of the Rental Unit
The rental unit must be identified. The current address of the rental unit must be included in the lease with either:
The entire house/package w/land is rented; or
The suite is on the 2nd floor of xxx St NW, Calgary.
Federal Goods and Services Tax
The lease must address whether the tenant will be required to pay GST in addition to the rent. Generally, the tenants do not pay GST, except if the housing is primarily for supplies or most commercial housing.
Rent Amount
The rental amount must be identified in the lease. If the rent can change, it must be described in detail in the lease. For example: "You will pay $1,400 on the 1st of every month. The rent will increase by $50 on the 1st of June 2019."
Security Deposit
The security deposit amount must be included in the lease. If the security deposit is paid in installments, the payment amounts and time periods must be included in the lease.
Water, Heat, Sewage, Electricity, and Natural Gas
If the water, heat, sewage, electricity, and natural gas are included in the rental price, the lease must reflect that. If the landlord is not providing these utilities, the lease must either include the current cost or state that the tenants will pay the actual costs.
Commercial Car Plug
If there is a plug-in available for a vehicle in the winter the lease must identify the monthly/seasonal fee for the car plug-in.
Lease Duration
The lease must identify the duration of the tenancy. This includes whether the lease is month-to-month or fixed-term. If the tenancy is a fixed-term, the start and end date must be included in the lease. You should also make sure to include the duration of grace periods (if any), if the rent will be reviewed after the grace period and if yes: review the rent amount are there any increase caps.
Form 1: Residential Tenancy Agreement
The lease must either be the Form 1: Residential Tenancy Agreement or resemble the Form 1: Residential Tenancy Agreement. The Residential Tenancy Act Form 1 is a fill in the blank template for residential lease agreements. It outlines the information/formats the essential parts of a residential lease must include.
Legally Required Information in Lease Agreements in Alberta
The legal framework for residential lease agreements in Alberta is established under the Alberta Residential Tenancies Act, RSA 2000, c 32 ("ARTA"). The ARTA governs relationships between landlords and tenants from the creation of the residential lease to its termination. Failure to meet such obligations can give rise to disputes and potential legal action before the Residential Tenancy Dispute Resolution Service (the "RTDRS"), the court or both.
Section 5 of the ARTA explicitly states that the ARTA applies to all residential tenancy agreements, apart from the exceptions detailed under section 6 of the ARTA. These exceptions include mobile home spaces, cooperative housing, and social housing. Upon entering into a residential tenancy agreement, a tenant or landlord is deemed to have read the ARTA and to have agreed to abide by its provisions.
Under the ARTA, a residential tenancy agreement is a written or oral contract, regardless of whether it is for a fixed term or for an indefinite period of time. However, as explained below, written contracts are preferred and, in some cases, required.
Regardless of whether the residential tenancy agreement is written or oral, it must contain specific information including:
If a written residential tenancy agreement is entered into, it must contain:
The ARTA requires that a written residential tenancy agreement be provided to the tenant after it has been signed by both the landlord and the tenant. Failure to do so can create uncertainty regarding the parties’ rights and obligations and may allow the tenant to terminate his or her residential tenancy agreement without penalty.
The ARTA also contains provisions for the landlord’s right of entry to the premises during the lease term. These provisions include:
(a) the landlord shall not enter the premises without the consent of the tenant unless
(i) entry is necessary for some reasonable purpose (such as an inspection, maintenance or repair of the premises or the supply of services) and the landlord has given the tenant reasonable notice of his or her intention to do so, or
(ii) entry is necessary because the health, safety or security of a person or the premises may be at risk and the landlord has given the tenant reasonable notice of his or her intention to do so
(b) the landlord shall not enter the premises without the consent of the tenant and shall not change any locks or locking systems without providing the tenant with a key or means of access
(c) the landlord shall not enter the premises without the consent of the tenant in the absence of exigent circumstances
(d) a landlord or any other person authorized by the landlord must, on presenting proper identification, be given access to the premises by the tenant
(e) an entry to the premises under this section must occur between 8:00 a.m. and 8:00 p.m.
While the majority of lease terminations occur by an agreement of the parties, a tenant has the right to terminate a residential tenancy agreement as a result of:
The ARTA mandates how landlords should deal with a tenant’s request for a breakdown of costs. It requires that a landlord provide a tenant with a written statement setting out how costs were calculated and that upon request the landlord provide a breakdown of costs.
Common Terms in Alberta Lease Agreements
While renters want to know about their rights under the law, tenants are also most concerned with how a rental agreement will affect them in day-to-day life. There are several common clauses included in residential lease agreements in Alberta that renters should be aware of:
Pet Policies
The topic of pets creates significant debate between landlords and tenants. As one of the largest concern of tenants when signing a lease, you can bet that residents want to know exactly what is permitted and what is not. For instance, your lease agreement should specify if pets are allowed. If they are permitted, should they be leashed when outside? Only certain types and sizes of pets permitted? Or are pets strictly prohibited from the premises?
Maintenance Duties
Many landlords set out the expectation for maintenance in the lease agreement. Some of the more common duties dictate that:
Lease Renewal/Termination Policies
If a tenant is happy in their rental home, they will want to know if they have the possibility of renewing their rental agreement for another period. In contrast, if they plan to vacate at the end of the term, tenants like to know what the requirements are for giving notice and other necessary details about moving.
Tenants’ and Landlords’ Rights and Obligations
The rights and responsibilities of both tenants and landlords are governed through the Residential Tenancy Act. These reciprocal obligations are binding on both parties to the lease. When your landlord refuses to make a significant repair or retaliates against you for reporting problems, you still have legal rights as a tenant. Likewise, when your tenant is late on paying rent or damaging the property, you have the right to take legal action to address the issue.
The responsibility of maintaining proper conditions and dealing with basic upkeep falls squarely on a landlord. However, "normal wear and tear" is not something a landlord needs to address. Normal wear and tear includes things like faded wallpaper, worn carpets, or scuffed floors. Responsibilities of a tenant, on the other hand, require them to take care of minor damages. If the wallpaper is torn, or the carpet is stained, then it goes to the tenant to fix these problems.
Paying rent in a timely manner is a basic obligation of a tenant in a residential lease agreement. Late rent is considered a material breach of a lease agreement . A landlord has the right to file an application for arbitration in order to collect rent due after giving your tenant fourteen full days to pay what’s owed. If the rent is still not paid, the Residential Tenancy Dispute Officer may issue a payment order in order to collect the outstanding balance from your tenant.
If the tenant is disrupting other tenants, damaging the rental unit, or failing to meet basic requirements, this is also grounds for requiring them to vacate the rental unit. In Alberta, you are also obligated to abide by municipal bylaws. If your tenants, or their guests, violate bylaws, you may be able to evict them on these grounds. Under the RTA, you must give your tenant fourteen (14) full days’ notice for them to leave the commercial premises.
Tenants have the right to a suite that is clean and habitable before they move in. Your tenants have the right to bring an action against you when you fail to fulfill your obligation to provide both a clean and habitable rental unit. The Residential Tenancies Act also applies to lease agreements for commercial properties. In this case, they make a distinction between commercial and residential properties.
Checklist for Creating a Lease Agreement in Alberta
In Alberta, the residential tenancy agreement is very important for both the landlord and tenant. It lays out the guidelines of the rental arrangement and protects the parties’ respective interests. It can prevent disputes and ensures that each party knows what is expected of them. The process of renting a home or apartment can be broken down in to several steps: Initially, the parties have to sit down and discuss how the rental arrangement will occur. They will talk about things like the length of the lease, the price of rent, whether the utilities are included in the rent and other expectations. Secondly, the landlord will write up a lease agreement that clearly sets forth the legal relationship between the parties. The landlord should be familiar with the Residential Tenancies Act, which governs residential leases in Alberta. It’s a simple document that should be as clear and unambiguous as possible. Thirdly, the parties will review the lease drawn up by the landlord and see if there are any revisions needed. They may choose to make their changes in writing, with both parties signing off on the changes. Finally, the parties both sign the lease, making it a legally binding contract. At that point, they are obligated to comply with the stipulations in the contract. If either party fails to comply with the lease, they could be held responsible for the breach of contract or breaking of the lease. If problems arise, such as a person vacating the premises before the lease expires or refusing to leave at the end of the lease, the Alberta Residential Tenancy Dispute Resolution Service can assist with mediation efforts. In some cases though, court action is required and can be taken through the proper channels. As simple as it might seem, the steps to creating a lease agreement in Alberta can produce a lot of anxiety. Making sure you are both on the same page with your landlord can be a daunting task if you’re not sure what they might be looking for or expect of you. But if you’ve done your research and have carefully reviewed your lease agreement before signing, you’ll have nothing to worry about—and you’ll go into the process with a lot more confidence.
Pitfalls to Avoid in Lease Agreements
A common pitfall when entering into a residential lease agreement in Alberta is the failure to read the lease agreement before signing it. We encourage both landlords and tenants to take the time to read the entire lease agreement and ask any questions that may arise out of the terms of the lease agreement. Where appropriate, landlords may want to consider offering a telephone number or email address to answer questions prior to the signing of the lease agreement. There are no stupid questions to ask. It is much better to know if there is a concern with a term of the lease agreement prior to signing, so that appropriate amendments can be made to the lease agreement. It is even more important for the tenant to read the lease carefully to understand commitments they may be making to the landlord regarding such things as pets, smoking and obtaining landlord approval prior to developing basement suites.
Tenants may find it beneficial to sign a rental agreement prior to moving into a home as it provides certainty to the tenant that the home can be occupied for a specified period of time. Tenants should always ensure that the residential premises meets their requirements prior to signing the agreement and taking possession of the home. In some cases, tenants may sign a rental agreement without having seen the home they will be living in. Not all landlords will agree to this, but to the extent possible, tenants should see the home they will be living in prior to signing the agreement, particularly in a situation where the rental agreement is for less than one year.
It is also important that the information contained in the lease agreement is accurate and not misleading to the tenant. A common practice by landlords is to provide rental incentives to tenants, such as providing the 12th month free, in order to entice tenants to move into a rental unit. While these incentives may be offered verbally, it is important that the correct rate is charged to the tenant. This will reduce the likelihood of disagreements later on regarding what the rental amount is due to a misunderstanding by the tenant as to the monthly rental amount. All amounts owing under the rental agreement should be clearly set out. While this may seem obvious, a disagreement regarding what is included and what is not included in the rent often arises later between landlords and tenants. The lease should clearly spell out what expenses are included in the rate of rent, such as utilities, television and internet costs.
Important Resources and Templates for Lease Agreements
While we always recommended that any legal agreement be created by or drafted under the supervision of a lawyer, there are many reliable resources available for lease agreements. Could these be inexpensive alternatives to getting a professional legal opinion?
In Alberta, the website for The Residential Tenancies Dispute Resolution Service (RTDRS) is an excellent resource. In particular, The Resources & Forms section of their website provides links to essential information for both landlords and tenants and contains links to the Residential Tenancy Dispute Resolution Service, types of tenancy, the Residential Tenancies Act (RTA), and Landlord & Tenant Responsibilities (Residential Tenancies Act 2020).
Many private websites target residential tenants with information specific to Alberta. There are sites available for a cost that provide in-depth information for both landlords and tenants, however, there are others that provide guidance for free.
Finally , Alberta.ca has a Residential Tenancies FAQ answer sheet where they touch on recent amendments to the RTA including information on rent, security deposits and maintenance. They also have an interactive tool that helps you answer the question "Should I Get a Lease?"
Up until September 30, 2020, there were mandatory clauses that had to be included in a lease. There are no more mandatory clauses required – so drawbacks to using online templates that still include those clauses.
FindLaw Canada Articles:
Canadian Legal Information Institute (CanLii)
Forms:
Office of the Alberta Residential Landlord & Tenant Advisor
Canadian Office of Consumer Affairs (Consumer Affairs)
Public Legal Education and Information Service of New Brunswick
Government of Canada
Government of Ontario
Government of Quebec
Government of British Columbia
Law Centre at the University of Alberta
nolo.com