Additional Fees and Charges - November 1, 2004
| 1(1)(f) | landlord definition |
| 1(1)(k) | rent definition |
| 1(1)(l) | residential premises definition |
| 1(1)(m) | residential tenancy agreement definition |
| 1(1)(n), 43(1), 43(2) | security deposit |
| 1(1)(t) | tenant definition |
| 22(6) | assignment or sublease |
There are no sections in the Regulations relating directly to "additional fees & charges".
GUIDELINES
The RTA allows a landlord to collect a security deposit providing that it does not exceed the sum of the first month's rent.
A security deposit is intended:
- To cover the landlord's costs of repairing or replacing physical damage to premises
- To cover the costs of cleaning because of extraordinary or abnormal use. This does not include cleaning associated with normal wear and tear
- To cover any arrears of rental payments
- To cover other costs agreed to by the tenant that are set out in the residential tenancy agreement, such as legal fees, utilities, late fees, etc.
The RTA does not prohibit the landlord and tenant from agreeing to fees and charges that are in addition to the security deposit and rent. However, a landlord cannot charge an additional "deposit" for a certain privilege, if the total amount exceeds the sum of the first month's rent.
Any refundable fee or charge becomes part of the security deposit.
A non-refundable fee or charge that is agreed to in the residential tenancy agreement is not subject to the security deposit restrictions. Non-refundable fees cannot be deposited into the security deposit trust account.
A landlord should give a tenant a receipt for any payments that are received from the tenant.
A residential tenancy agreement is a contract between the landlord and tenant. (See the Residential Tenancy Agreement section.) Like all contracts, the residential tenancy agreement can specify the terms of any additional fees or charges and the circumstances that would give rise to them.
The tenant has the option of refusing to enter into a residential tenancy agreement that contains additional fees or charges. The tenant may negotiate changes to their specific tenancy agreement or may choose to rent elsewhere.
The law relating to contracts is clear that once both parties enter into an agreement, it cannot be amended without the agreement of both parties. So, if the tenancy agreement is written, and any additional fees or charges are clearly specified and agreed to by the tenant and are not contrary to the RTA, then the tenant is obligated to pay those fees or charges when the circumstances giving rise to them occur. If the tenancy agreement is not written, it becomes a matter for the courts to determine, based on the evidence presented to them, whether there was agreement on the additional fees or charges payable by the tenant.
Any fee or charge that a landlord imposes may be subject to review by the court. The court has the power under the Judicature Act to grant equitable relief or relief from forfeiture to the tenant if it concludes that the fee or additional charge is unreasonable under the circumstances (referenced court case: #12).
PRACTICAL APPLICATIONS
Fees or additional charges should reasonably reflect the actual costs that the landlord is seeking to cover. If the fee or charge does not reflect an actual cost recovery, or is far in excess of the cost recovery, it may well be held by a court to be unenforceable, and could even, in some circumstances, be an offence under the Criminal Code of Canada.Tenancy agreements should state any additional fees or charges, the circumstances that will give rise to them, and whether they are refundable or non-refundable. All fees should be disclosed to tenants when an application and security deposit are taken.
A landlord may charge an "application fee" and should let the tenant know about it before taking the application. It is the landlord's choice whether or not to refund the fee if the application is denied or approved. The prospective tenant who does not want to pay such a fee does not have to apply to rent the residential premises.
A landlord may charge a key fee or deposit if both parties agree to the fee.
A landlord may charge a pet fee or deposit if both parties agree to the fee. However if a tenant acquires a pet after the tenancy has begun, the landlord cannot demand that the tenant pay an additional fee or charge unless the residential tenancy agreement speaks to the issue or both parties agree (referenced court case: #22).
If the cost of utilities is included in the tenancy agreement, the landlord cannot impose an additional charge by changing who pays for the utilities without the consent of the tenant.
A landlord may charge a fee for late payment of rent or an NSF fee only if the fee is clearly stated in the tenancy agreement. If the tenancy agreement allows for either of these fees to be charged, the fees must be reasonable, as landlords cannot impose penalties (referenced court case: #9).
A landlord may charge a re-rental fee if it has been agreed to by the tenant in the residential tenancy agreement. If the agreement specifies a re-rental fee and the tenant wishes to terminate their tenancy prior to the termination date and, if the landlord is willing to allow the tenant to terminate at that earlier date, the tenant will be required to pay the landlord the re-rental fee agreed to in the residential tenancy agreement.
The RTA prohibits a landlord from charging a fee for giving consent to an assignment or sublease of a residential tenancy agreement.
