As a landlord or tenant in Ontario, one of the most common questions near the end of a lease term is:
Do we need to sign a new lease?
The answer is often simpler than many people think.
What Happens When a Fixed-Term Lease Ends?
In Ontario, when a fixed-term lease expires, the tenancy does not automatically end.
Under the Residential Tenancies Act (RTA), the lease automatically converts to a month-to-month tenancy under the same terms and conditions, unless both parties agree otherwise.
This means:
- The tenant can continue living in the property.
- The landlord cannot require the tenant to move out simply because the lease term has ended.
- All existing lease terms remain in effect.
- Rent can only be increased according to Ontario’s rent increase rules and required notice periods.
For many tenants and landlords, no additional paperwork is required.
Option 1: Continue Month-to-Month
This is the most common scenario.
Once the initial lease term expires, the tenancy automatically becomes month-to-month.
Benefits include:
- Greater flexibility for both parties.
- No need to sign additional documents.
- Existing lease terms remain unchanged.
The tenant can terminate the tenancy by providing at least 60 days’ written notice, while landlords must still follow Ontario’s legal procedures if they wish to terminate the tenancy.
Option 2: Sign a New Fixed-Term Lease
In some situations, both parties may prefer additional certainty.
A landlord and tenant can mutually agree to sign a new fixed-term lease, such as another 12-month term.
Potential advantages include:
- Greater stability for the landlord.
- Reduced turnover risk.
- Added security for tenants who plan to remain in the property long-term.
However, tenants are not required to sign a renewal simply because the landlord requests one.
The decision must be agreed upon by both parties.
Can the Rent Be Increased at Renewal?
Possibly.
Rent increases in Ontario are governed by provincial regulations and generally require:
- Proper written notice using the approved form.
- At least 90 days’ notice.
- Compliance with applicable rent increase guidelines, unless the unit is exempt from rent control.
A lease renewal does not automatically allow a landlord to increase rent beyond what is legally permitted.
Best Practices for Landlords
If your tenant is performing well and you would like them to stay:
- Start the conversation 2–3 months before the lease expires.
- Discuss whether both parties prefer a new fixed-term lease or month-to-month tenancy.
- Confirm any agreed-upon rent adjustments in writing.
- Keep records of all communications and signed documents.
Final Thoughts
Many Ontario landlords are surprised to learn that a lease does not need to be renewed for a tenant to remain in the property.
In most cases, the tenancy simply continues on a month-to-month basis under the same terms and conditions.
Whether you choose to remain month-to-month or sign a new fixed-term agreement depends on your goals, flexibility needs, and long-term plans. Understanding your rights and obligations can help ensure a smooth transition for both landlords and tenants.
If you are a landlord with questions about lease renewals, rent increases, or managing rental properties in Ontario, consulting a knowledgeable real estate professional can help you make informed decisions.
