What Happens to Tenants When a Landlord Dies in Ontario?

If your landlord has died, you may be unsure who to pay rent to, who to call about a broken furnace, and whether you will be asked to move. If you are the estate trustee, you have inherited a rental property along with the tenants in it.

The short version is that the tenancy is a legal arrangement, and the law is written so it can carry on when the landlord changes. This article explains the main ideas and where the answers depend on the details.

Does the lease continue?

Under s. 2(1) of the Residential Tenancies Act, the word 'landlord' includes the landlord's heirs, assigns, personal representatives and successors in title. In practical terms, the landlord's side of the tenancy is not wiped out by death. Someone steps into the role, whether that is the estate trustee or later the person who inherits or buys the property.

How this applies to your tenancy depends on your situation, so it is worth confirming with a lawyer. The rules are amended from time to time, so confirm the current Act if a specific issue comes up.

Who handles rent, repairs and deposits

An estate trustee winds up the deceased's affairs, pays taxes and debts, collects the assets and distributes the residue to those entitled. How a rental property is managed while the estate is open depends on the facts, so it is worth confirming with a lawyer.

There can be a gap between the death and the moment someone is formally appointed. If you are a tenant, ask in writing who is now handling the property and where to send rent, and keep proof of every payment.

Deposits deserve particular attention. Landlords must pay tenants interest each year on the last month's rent deposit at the rent increase guideline rate. A rent deposit cannot be more than one month's rent or one rental period's rent, whichever is less, and it must be applied to the last rental period. Because the landlord's role passes to the estate and others who step in, tenants and trustees should confirm who is holding the deposit and keep records of it.

• Tenants: keep paying rent in a traceable way and keep your receipts.
• Tenants: put repair requests in writing, addressed to whoever is handling the property.
• Estate trustees: find the leases, deposit records and any rent owed before distributing anything.

What the estate trustee has to sort out

Probate is normally required if the deceased owned real property that does not pass to another person by right of survivorship. If the landlord owned the building as a joint tenant, the surviving co-owners inherit the share. If it was owned as a tenant in common, the share becomes part of the estate.

Estates valued at up to $150,000 can use a Small Estate Certificate, and larger estates use a Certificate of Appointment of Estate Trustee. Estate Administration Tax for certificates applied for on or after January 1, 2020 is $0 per $1,000 on the first $50,000 and $15 per $1,000 on the rest, with Ontario real estate counted at appraised date-of-death value minus encumbrances.

Money and tax issues behind the scenes

Tenants usually do not see this side, but it can affect timing. On death, the deceased is treated as having sold their property just before death, and any gain or loss is reported on Schedule 3 of the final return. The final return is due April 30 of the following year if death occurs from January 1 to October 31, or six months after the date of death if death occurs from November 1 to December 31. Any balance owing is not due later just because the filing date is later.

Unpaid property taxes or other debts can also push an estate toward selling. Under the municipal tax sale process, a tax arrears certificate may be registered, and the sale can be cancelled by paying the cancellation price within one year after registration. A sale can be a reason tenants hear about changes, so ask early if you are told the property may be sold. What a buyer can do about your tenancy is a question to confirm with a lawyer or the Landlord and Tenant Board.

What to do next

• Tenants: ask in writing who is now responsible for the property and how to pay rent.
• Tenants: keep your lease, rent receipts and any deposit paperwork together.
• Estate trustees: gather the leases, rent roll, deposit records and insurance details.
• Estate trustees: confirm whether probate is needed before any sale is signed.
• Either side: if there is a dispute or a notice, get legal advice before responding.

Frequently asked questions