As an Ontario landlord, you may be tempted to include a clause in your lease that attempts to make the tenant pays first $100 of repairs in Ontario. This is a common practice intended to filter out minor, frivolous maintenance requests and reduce your out-of-pocket expenses.
However, you must be aware that under the Residential Tenancies Act, 2006 (RTA), this clause is entirely void and unenforceable. Understanding why this is the case is crucial to protecting yourself from unnecessary disputes at the Landlord and Tenant Board (LTB) and ensuring you remain compliant with the law.
The Landlord’s Non-Negotiable Obligation
The RTA places an explicit, overarching duty on all landlords to “provide and maintain a residential complex… in a good state of repair and fit for habitation.”
This means that you are financially responsible for 100% of the cost of any maintenance or repair caused by:
- Normal Wear and Tear: This includes minor paint scuffs, worn-out carpets in high-traffic areas, loose door handles, or a refrigerator that simply stops working due to age.
- Malfunction or Accidental Damage Not Caused by the Tenant: This covers issues like a leaky roof, a clogged drain due to old pipes, or a furnace breakdown.
Because the RTA makes the landlord responsible for these items, any provision in a lease that attempts to transfer a portion of that cost to the tenant—such as the clause that the tenant pays first $100 of repairs in Ontario—is automatically void. The LTB will simply disregard it in any hearing.
The Cost of Using an Illegal Clause
While the intention behind the deductible clause is understandable, its inclusion can lead to greater problems than it solves:
- It Deteriorates Your Property: If tenants know they will be charged $100 for every repair request, they are likely to ignore small problems like a dripping faucet or a running toilet. These minor issues will inevitably escalate into major, costly repairs (e.g., water damage, high utility bills) that you will ultimately have to pay for in full.
- It Creates Legal Vulnerability: Including unenforceable clauses is a red flag to a well-informed tenant or the LTB. It can immediately undermine your credibility and may be used as evidence of an attempt to interfere with a tenant’s lawful rights.
Where the Tenant IS Responsible (The Full Cost)
It is important to clearly distinguish between routine maintenance (your responsibility) and tenant damage. The RTA only requires a tenant to pay for or repair “undue damage” that they, their guests, or other occupants cause, either willfully or negligently.
If a tenant is responsible for damage, they are liable for the **full and reasonable cost** of repair, not just the first $100.
Examples of Tenant Liability (Undue Damage):
- Smashing a window.
- Puncturing the drywall.
- Damage caused by gross negligence (e.g., overflowing a bathtub).
For these situations, the correct legal approach is to give the tenant a formal notice (such as an N5 notice) and demand the full cost of the repair. If the tenant refuses, you must then apply to the LTB (using forms like an L2 or L10 application) to receive an order for compensation. You cannot simply deduct this cost from a Last Month’s Rent deposit.
Focus on Best Practices, Not Illegal Clauses
To effectively manage your rental property and minimize frivolous requests without relying on the unenforceable tenant pays first $100 of repairs in Ontario clause, focus on these legal best practices:
- Thorough Tenant Screening: This is your best defense against negligence. Choose reliable tenants who demonstrate respect for property.
- Clear Communication: Educate your tenants on the difference between a necessary repair (your cost) and minor items like changing an accessible lightbulb (often a reasonable expectation of the tenant).
- Proactive Documentation: Conduct lawful inspections (with 24 hours’ written notice) and use detailed move-in/move-out reports with photo evidence. This documentation is your key to proving “undue damage” at the LTB and recovering the full repair cost.
Compliance with the RTA is non-negotiable. By removing the unenforceable “deductible” clause and adopting these proactive management strategies, you protect your investment legally and prevent small maintenance issues from becoming financial disasters.
