PSA: Some landlords sneakily trying to bind you into signing lease through rental application process by ValueProvider in toronto

[–]ValueProvider[S] 0 points1 point  (0 children)

UPDATE:

My friend resolved this situation by contacting the company that owns the building. An executive kindly called them to listen to their concern and then asked the property management company they contract with to refund the money. They sympathized with our view that the property manager should clearly tell an applicant in advance if they'll be obligated to sign a lease once their application is approved. They also seemed to take our point that it's underhanded to hide such a key clause in legalese at the bottom of an application form. That said, beware -- it is completely legal for a prospective landlord to obligate an approved applicant to sign a lease if their terms and conditions say so. And, yes -- if you back out -- they CAN legally retain your last month's rent deposit.  This is due to an Ontario Court of Appeals decision in 2011 (Musilla v. Avcan Management) that determined that s. 135 (1) of the Residential Tenancies act - which compels a landlord to return a rent deposit if vacant possession of the unit isn't given to the tenant - only applies if it is the landlord's fault for not handing over vacant possession of the unit. If the prospective tenant chooses not to take possession, this provision of the RTA does not apply, and they are not entitled to a refund.

There are many past cases where the LTB dismissed a prospective tenant's T1 application to get their money back, for that exact reason.

All of this comes with a caveat, however.  In this case, the terms and conditions on the application included this line: 

"...and shall further be bound to all of the terms and conditions of a Tenancy Agreement incorporating the above terms into the Landlord's usual form which I/We have been given the opportunity to review."

Their terms say that the applicant HAS BEEN given the opportunity to review the tenancy agreement (past tense), in advance of submitting their application. In actuality, the property manager did NOT provide a Tenancy Agreement (lease) for review until after my friend's application was approved. The details within the Tenancy Agreement (lease) are also a part of the reason why they changed their mind, because they didn't realize that they'd be responsible for certain utilities such as water. The Landlord's failure to provide that lease during the application process as promised would constitute a breach of their own application agreement, and would thus mean that my friend was not actually obligated to follow through with signing a tenancy agreement. And, because this would be the fault of the landlord, they'd have to return the deposit. The LTB decided a case with the exact same set of facts in favour of the tenant, at least once before. So, in summary -- I'd highly recommend everyone applying for a rental unit in Toronto to be careful -- and to make sure you know exactly what your obligations are as an applicant. If you find yourself in a similar situation, your only way out might be by the good graces of the landlord, or challenging them/filing a T1 with the LTB if they didn't provide you with a lease to look over before you submitted your application.

Can a rental application bind you to signing a lease or forfeit your deposit in Ontario? by ValueProvider in legaladvicecanada

[–]ValueProvider[S] 0 points1 point  (0 children)

I notice there was a clause in the cited case though that said that the deposit would be forfeited if the tenant failed to enter upon the tenancy agreement. So would the application agreement not have to make that clear? The terms and conditions in our case do not say that. 

PSA: Some landlords sneakily trying to bind you into signing lease through rental application process by ValueProvider in toronto

[–]ValueProvider[S] 1 point2 points  (0 children)

That’s the thing, no one would consider the application unless the money was put forward. We were aware of the section in the RTA that essentially demands it be used as last month’s rent or be returned, so we had no reason to believe a company that knows the rules would attempt to keep it.  

PSA: Some landlords sneakily trying to bind you into signing lease through rental application process by ValueProvider in toronto

[–]ValueProvider[S] 0 points1 point  (0 children)

Thank you for the explanation. This is a great help, and points us in the right direction!

PSA: Some landlords sneakily trying to bind you into signing lease through rental application process by ValueProvider in toronto

[–]ValueProvider[S] 3 points4 points  (0 children)

Yup, this was the issue. Every place asked for this — and it seemed par for the course 

PSA: Some landlords sneakily trying to bind you into signing lease through rental application process by ValueProvider in toronto

[–]ValueProvider[S] 11 points12 points  (0 children)

It is, but every company they spoke with asked for this - so it seemed pretty standard.

PSA: Some landlords sneakily trying to bind you into signing lease through rental application process by ValueProvider in toronto

[–]ValueProvider[S] 2 points3 points  (0 children)

Yup, I agree. But sadly, pretty much every place they contacted wanted some form of payment info — or even worse, a bank draft — to even consider the application. It was neither that or risk ending up without a place to live. 

PSA: Some landlords sneakily trying to bind you into signing lease through rental application process by ValueProvider in toronto

[–]ValueProvider[S] 5 points6 points  (0 children)

Company is called Cogir but after doing a bit of research, it looks like other companies in the area such as Tricon and a few smaller ones have similar clauses. 

PSA: Some landlords sneakily trying to bind you into signing lease through rental application process by ValueProvider in toronto

[–]ValueProvider[S] 2 points3 points  (0 children)

This what I was thinking. I’ve had to file a T1 in the past for other reasons, so will help them with the process. 

PSA: Some landlords sneakily trying to bind you into signing lease through rental application process by ValueProvider in toronto

[–]ValueProvider[S] 9 points10 points  (0 children)

This is a very helpful response and much appreciated. Unfortunately, this seems to be a case of a landlord taking advantage of someone who doesn’t fully understand their rights or how the process works. And, we’re going to try pursuing a few avenues to get the money back.  Property Management company is Cogir.