For real estate investors, finding the right tenant is paramount to a successful venture. A thorough and legally compliant tenant screening process is your first line of defense against potential headaches. In Ontario, this process is governed by specific rules, making it essential to understand what you can and cannot ask.
This guide will walk you through the rental application Ontario process, with a focus on best practices and legal compliance, including insights into the popular Ontario rental application Form 410.
The Ontario Rental Application: More Than Just a Form
While there isn’t a single, mandatory government Ontario rental application form, a standard industry practice has emerged. The most widely recognized and utilized application is the OREA Rental Application (Form 410), published by the Ontario Real Estate Association.
OREA Rental Application (Form 410):
This form serves as a comprehensive tool for landlords and their agents to gather crucial information about prospective tenants. It’s designed to help assess a tenant’s financial reliability and suitability. However, it’s vital to remember that even with a standardized form like Form 410, landlords must still adhere strictly to the Residential Tenancies Act (RTA) and the Ontario Human Rights Code.
Permitted Information Landlords Can Ask For
When processing a rental application Ontario, landlords are legally allowed to request information that helps them make a sound business decision. This includes details that confirm an applicant’s ability to pay rent, care for the property, and be a responsible tenant.
Here’s what you can generally request:
- Income Verification: Proof of stable employment and sufficient income (e.g., employment letters, recent pay stubs, bank statements, or Notice of Assessments for self-employed individuals).
- Credit History: Consent to perform a credit check. This gives insight into an applicant’s financial responsibility and payment history.
- Rental History & References: Contact information for previous landlords to verify past tenancy, promptness of rent payment, and property maintenance. Personal or employer references can also be helpful.
- Occupancy Details: The number of people who will be living in the unit.
- Pet Ownership: While a “no pets” clause in a lease is generally unenforceable in Ontario, you can ask if an applicant has pets.
- Smoking Habits: You can ask if an applicant smokes, and you can enforce a non-smoking policy in your rental unit.
Rules for Using Income Information
While collecting income information is permissible, how you use it is regulated. Landlords cannot solely rely on income to make a decision, nor can they use arbitrary “rent-to-income” ratios (e.g., rejecting anyone whose rent exceeds 30% of their income) unless the unit is subsidized housing.
Instead, income information should be used as part of a holistic assessment that also considers:
- Credit history (e.g., a good credit score might offset slightly lower income).
- Positive references from previous landlords.
- Other relevant financial information.
The goal is to confirm the applicant has the financial capacity to meet the rental obligations without causing undue hardship.
Prohibited Information (Human Rights Code)
This is a critical area for compliance. The Ontario Human Rights Code strictly prohibits landlords from requesting information that could lead to discrimination based on protected grounds. Asking these questions, even innocently, can expose you to legal action.
You cannot ask about:
- Age: While you can verify identity, you cannot reject someone based on being too young or too old.
- Family Status: Questions about marital status, pregnancy, or whether an applicant has or plans to have children are prohibited.
- Receipt of Public Assistance: You cannot ask if an applicant receives social assistance, ODSP, or any other form of public aid. (Remember: you can ask for income, but not its source if it’s public assistance).
- Race, Colour, Place of Origin, Ethnic Origin, Citizenship, Creed: These are all protected grounds.
- Disability: You cannot ask about an applicant’s health conditions or disabilities (unless they are requesting accommodation voluntarily).
- Sexual Orientation, Gender Identity, Gender Expression.
Prohibited Grounds for Refusal (Human Rights)
Just as you cannot ask for prohibited information, you cannot refuse to rent to a tenant based on any of the protected grounds under the Human Rights Code. This includes refusing an application because:
- The applicant has children.
- They receive income from social assistance.
- They are a member of a particular racial or ethnic group.
- They have a disability.
If a prospective tenant believes they have been discriminated against, they can file a complaint with the Human Rights Tribunal of Ontario, which can lead to significant penalties.
The Bottom Line for Investors
Navigating the rental application Ontario landscape requires diligence and a clear understanding of your legal obligations. Utilizing a structured approach, like that offered by the Ontario rental application Form 410, in conjunction with a strong awareness of the Human Rights Code, will help you screen tenants effectively and legally.
Remember, the goal is to find a responsible tenant while upholding their rights. When in doubt, always seek legal advice from a paralegal or lawyer specializing in Ontario’s landlord-tenant law.
