What are Rental Tenancy Agreements?
A rental tenancy agreement is essentially a contract between a landlord and a tenant that outlines their mutual obligations in a rental situation. While it may seem like just another piece of paper, the rental tenancy agreement is one of the most important documents involved in Alberta’s landlord/tenant law. It is what sets the relationship between the parties and is the basis of the rights and obligations owed by the landlord to the tenant and by the tenant to the landlord.
These agreements come in a variety of forms. Informal , unwritten agreements can come into play when a person moves in to live with a friend or significant other without actually signing anything formal (although a verbal agreement between the two of you is still legally binding). Other agreements can be informal written ones, such as a text messages or an email agreement. Most current agreements are more formal and official. The standard form for rental tenancy agreements in Alberta is the Residential Tenancy Tenancy Agreement provided by the Residential Tenancy Dispute Resolution Service. This government-maintained program also provides a separate form of agreement for landlords and tenants of subsidized housing, and a rooming and boarding house lease agreement.
Essential Components of a Tenancy Agreement
Tenancy agreements, commonly called tenancy or rental contracts, are what govern the landowner/tenant relationship. The process for creating a tenancy agreement is set out in the Residential Tenancies Act (Act).
The most critical point is that landlords and tenants must draft tenancy agreements to be written form, including every term that is agreed upon by both parties. There is a limited exception to this rule, which is where the tenant has possession of the residential premises and pays the rent on time, but the tenancy agreement covers some or all of those items by "custom or practice." The landlord then is not entitled to enforce those provisions of the tenancy agreement if they are not in written form.
Residential tenancy agreements can contain terms that are stricter than the Act, but those terms cannot be less strict than the Act. The Act will not enforce a term that is in violation of Alberta legislation.
What terms should be included in a tenancy agreement?
- Names of the parties. The tenancy agreements should list the landlord’s full name and current contact information. If there are multiple owners of the residential property, the owners should include a statement regarding whether the tenancy is to apply to all owners or only one owner.
- The residential premises. The full address or legal description should be included, as well as the type of property, whether a basement suite, secondary suite, standard home.
- Rent. The amount of the rent should be listed, including whether utilities are included. If the utilities are included, the landlord should have a statement of what is included. For example, there are some landlords who include cable TV in the rent and those details should be outlined in the agreement so the tenant has actual notice of that provision.
- Security Deposit. The Act allows a maximum security deposit of one month of rent. The agreement should designate the date that the deposit is to be paid, and if it is a post-dated cheque, the date that the post-dated cheque was given.
- Length of Tenancy. The residential tenancy only has to be for 30 days, running from the first day of the following month to the last day of the following month. A longer tenancy is completed by mutual agreement between the parties, and the longer term should be included.
- Occupants of residential premises. The agreement should specify the number of guests, if any, who are permitted to reside on the premises. The landlord may also have to make an exception to the number of allowable guests as this is a bona fide of tenancy which cannot be waived by the agreement.
- Insurance. While this is highly recommended, it is also a necessity. If your residential premises have a fire, it is the tenant’s responsibility to insure their personal property including clothes and furniture.
- Move out provisions. The Act recognizes the landlord’s interest in limiting the liabilities that arise out of a move out. The provisions involving the move out should include information about how notice can be provided to the landlord, what procedures need to be followed before moving out, and what condition the residential premises needs to be in before moving out.
Legal Foundation for Tenancy Agreements in Alberta
Standards and procedures related to tenancy agreements in Alberta are chiefly governed by the Residential Tenancies Act, R.S.A. 2000, c. R-17 (the "RTA"). The RTA was recently updated and is now officially known as the Residential Tenancies Act, Revised Statutes of Alberta 2000, Chapter R-17 and hereinafter referred to as the "Revised RTA". The Revised RTA sets out the rights of and obligations of both landlords and tenants, including those relating to tenancy agreements. Currently under the Revised RTA, residential tenancy agreements are not required to be in writing. However, under the revised RTA, if a residential tenancy agreement is not in writing and a dispute arises, then the applicant under the tenancy agreement must prove their case on the balance of probabilities.
The typical commercially leased premises are exempt from the operation of the Revised RTA (s.3). Cooperatives and non-residential rental units are also typically excluded. There are specific exclusions for public housing units if the regulations enumerate the units as such. This means that if your tenancy is governed by the RTA, the terms of your tenancy agreement may be affected by the RTA – regardless of whether it is written. Further, if you are going to have or currently have a tenancy agreement, it is important that you understand how it should be worded or amended to affect or avoid the operation of the RTA, where it has been updated.
The RTA imposes certain requirements on landlords of all residential premises. The landlord must provide written notice of its landlord disclosure information. It must also accept and keep all rental payments by an approved method, unless its regulations permit otherwise. The amount of rent increases is also regulated by the RTA.
The RTA imposes certain restrictions on landlords starting on page 16. Specifically, they are prohibited from entering the dwelling unit in the absence of the tenant outside of emergencies or for otherwise unrecognized reasons under the RTA. Also, the landlord is required to give the tenant at least 24 hours written notice of a proposed entry. The landlord is also responsible for the repair and maintenance of the residential complex itself. These responsibilities are further enumerated on pages 23-27.
If you are engaging in a commercial tenancy agreement, there are separate statutory measures including the Landlord and Tenant Act, RSSA 2000, c. L-4. That legislation is scheduled to be repealed and replaced by the Commercial Tenancies Act, RSA 2000, c. C-5. As at the date of this blog, no new statutes have been enacted.
These standards must be adhered to during the term. In the event that something goes awry for whatever reason, remedies are provided in the Revised RTA, starting on page 47. The tenant may make an application under s.71 for a landlord to remedy a non-compliance with the terms of the RTA. The tenant may apply for an order of possession under s.3. The tenant may also be entitled to a refund of prepaid rent, damages or any other relief under s.72 depending on the situation.
This is a high-level overview of the legal framework governing tenancy agreements in Alberta, with a specific focus on the Revised RTA. Ultimately, this a high-level overview of the topic to which we would specifically recommend further research into the legal framework and enactment of tenancy in Alberta if you are entering or have entered into a tenancy agreement.
Duties and Obligations of Tenants and Landlords
The Alberta Residential Tenancies Act provides the rights of tenants and landlords under a rental tenancy agreement. The rights and responsibilities of both the tenant and landlord are detailed in the Residential Tenancies Act (the Act) and go a long way to ensuring that the obligations of both parties are clear.
The land lord is entitled to receive payment of rent when due, a quiet enjoyment of the premises and the right to enter into the property, where appropriate. The tenant is required to pay rent on the date it becomes due, not damage the premises and comply with all building, health, safety, fire and other regulations. The Act also sets out the duties of a landlord to provide habitable conditions such as a heating system, potable water supply, privacy, common areas in good repair and no pests or insects. The landlord has the right to enter the premises to show them to prospective tenants, to make repairs or for purposes of a public health emergency. The tenants have the right to peaceful possession of the property and to receive all notices in writing and in their preferred language. The tenant also has a duty to the following: A landlord may not remove a tenant except pursuant to an order from the Director, so long as the tenant has not been an unreasonable tenant or broken the lease. A landlord has the right to issue notices to end the tenancy. A tenant can end a tenancy upon giving one months notice to the end of the term and must vacate by the last day of the term. Any renewal, extension or continuation of the term requires a new written tenancy agreement within 12 days of the expiry of the original term. Even though the status of the tenancy agreement may be unclear after it expires, they may become periodic lease agreements if they are not terminated and rent continues to be paid and received by the landlord. It is important to keep in mind that the onus to prove the conditions of premises lies with the landlord. An inspection report of a unit may be required to establish a standard of damages. Any reasonable damage which occurred during the rental period will be treated as fair wear and tear, and the tenant would not be responsible for the costs to repair such damages. While a landlord has the right to enter the premises, there are limitations on entry requiring at least 24 hours notice and between 8:00 a.m. and 8:00 p.m. permitting the tenant to remain on the property while the work is being done. The Act also requires the consent of the tenant before someone may enter the premises.
Disputes Related to Tenancy Agreements
Disputes that arise from a tenancy agreement can be caused by a number of reasons. They can arise because a landlord can never collect a tenant’s rent; a landlord does not return a landlord’s security deposit when a tenant leaves; the tenant refuses to move out of a rental unit; a tenant breaks a rental agreement; a tenant causes damage to a rental unit; etc. If a tenant violates any of these terms, there are avenues to seek to have the violation rectified. This section sets out the process in Alberta.
There are two methods to dispute a violation of a tenancy agreement or to terminate a tenancy agreement: a Court Action or via the Residential Tenancy Dispute Resolution Service (RTDRS). If the property in dispute is located in Calgary, Edmonton, Lethbridge or Red Deer, the RTDRS process may be utilized. However, if the property is located elsewhere in the Province of Alberta, a Court Action should be commenced . As stated by Service Alberta, because RTDRS has been adopted as a means of "alternative dispute resolution" in certain municipalities, it is "cheaper and faster than going through the courts". You must file a claim within 2 years of the actual date on which the violation of the tenancy agreement occurred, which is similar to the limitation period for a Court Action between private parties.
Both the RTDRS process and a Court Action require you to file specific applications and to appear at a hearing regarding the violation of the tenancy agreement. The hearing will determine whether a breach of the agreement occurred and what damages may be awarded.
Both the RTDRS process and a Court Action are subject to strict procedural rules, limitation periods, and evidentiary requirements, therefore it is recommended that you seek the assistance of a lawyer or a paralegal.
Guide for Drafting an Unambiguous Tenancy Agreement
While the use of a written agreement is required under the Residential Tenancies Tenancies Act, because a tenancy agreement tends to be the governing document between a landlord and a tenant, the terms of that agreement should be drafted as clearly as possible to avoid any potential disputes. Here are some tips on how to draft a clear tenancy agreement:
- Follow the Law: Rental tenancy agreements must comply with the Residential Tenancies Act (Alberta) and the Mobile Home Sites Tenancies Act (Alberta). The Government of Alberta has provided sample agreements for each written tenancy agreement that are compliant with the Residential Tenancies Act, along with guidance notes available on the Alberta Service’s website. Please see the Government of Alberta’s website for the most current forms.
- Clarity is Key: Every term of a tenancy agreement, whether written or not, needs to be clearly communicated so as to not be open to interpretation. If you want a term to be a specific way, then write it that way in the agreement. If you want a term to be of no effect, or limited upon termination, then write it that way in the agreement. Clear terms will help to avoid disputes down the road.
- Prohibitive Conditions: The Residential Tenancies Act (Alberta) contains numerous provisions prohibiting a landlord from inserting certain terms in a written tenancy agreement. The Mobile Home Sites Tenancies Act contains similar terms that cannot be included in a written tenancy agreement. You need to review these provisions to ensure that the written tenancy agreement is compliant with the law.
- Rights and Obligations of the Parties: A written tenancy agreement will set out both the rights and obligations of the parties, including the termination of a tenancy. Be sure to provide that rights and obligations are reasonable, for example a six-month notice for termination instead of a one-year notice. Ensure that the rights and obligations are not overbearing on the tenant so as to discourage them to fulfill their obligations under the tenancy agreement.
- Tenant Information: The Residential Tenancies Act (Alberta) requires that certain information be provided to a tenant both at the time of entering into a written tenancy agreement, and during the course of the tenancy. See sections 10 and 16 of the Residential Tenancies Act (Alberta).
Who Should Sign the Written Tenancy Agreement: While a tenancy agreement does not have to be signed by the parties, in order to be enforceable a tenancy agreement must be signed by the landlord. The tenant is required to sign a tenancy agreement. This requirement does not apply to a tenancy agreement entered into for a rental premises operated by a charitable, religious or public authority. If requested, a tenant is required to provide written confirmation that the tenant received a copy of the tenancy agreement.
Legally Ending a Tenancy Agreement
In Alberta, the Residential Tenancies Act, RSA 2000, Chapter R-17 ("RTA") governs the process by which a tenancy agreement can be terminated. The RTA prescribes the types of notice that are required depending on whether the tenancy is periodic or fixed term and whether the landlord or tenant wishes to terminate the tenancy.
"A periodic tenancy is a tenancy that runs for a specific period of time and automatically renews for another equal period of time unless a party gives notice to the other party to terminate the lease. A fixed term tenancy is a tenancy that runs for a specific period of time and ends on the last day of that period or when both parties agree to have it renewed" (Alberta Landlord and Tenant Advisory Service).
For tenancy agreements that are periodic, the period for notice that is required to terminate the tenancy must be equal to one rental payment period. The landlord or tenant does not have to state a reason for terminating the tenancy. If the tenant gives notice to the landlord to terminate the tenancy, then the tenancy will be terminated on the last day of the full rental period that follows the notice period.
If the landlord gives notice, the RTA provides a list of reasons as to why a landlord may terminate a periodic tenancy. These grounds include failure to pay rent, substantial damage to the rental premises or substantial interference with the landlord, other tenants in the building or the right to reasonable privacy of the vacating tenant. If the landlord provides notice to terminate the tenancy , then the tenancy agreement will terminate at the end of the rental period that falls before the legal notice period that the landlord provides. In most cases, the notice will expire on the last day of the period of notice.
A landlord may also choose to give 24 hours of notice to enter the residential premises if the lease provides that notice. However, a landlord may also enter without notice if there is an emergency or to inspect the premises for damages that could result in injury to persons or damage to property. Additionally, a landlord may terminate a periodic tenancy if the residential premises are uninhabitable.
With regards to fixed term tenancy agreements, the RTA stipulates that a landlord and tenant must comply with the obligations set out in the tenancy agreement. If neither the landlord nor tenant has given notice to terminate the tenancy agreement, the tenancy agreement will terminate on the last day of the term provided for under the agreement, unless both parties have agreed to renew the tenancy agreement.
In the case of short-term fixed term tenancy agreements, a landlord may give the tenant 24 hours’ notice of termination to terminate the agreement at any time prior to the expiry of the agreement.
Under the RTA, any disputes that are not resolved between the landlord and tenant may be decided by a Dispute Resolution Service at Alberta Service. The purpose of the service is to provide alternative dispute resolution services to landlords and tenants in Alberta. A lawyer or representative does not have to be retained to resolve disputes. Disputes only need to be reported to the Dispute Resolution service if the parties are unable to resolve them on their own.