By A.J. Keilty, President, KEILTY Realty Management
A property management agreement decides who does what, who gets paid, and how the relationship ends. It does not decide who the law holds responsible. Several of the things owners try hardest to negotiate into that document are already settled by the Residential Tenancies Act, 2006, by a regulation under it, or by the Law Society's licensing by-law, and they stay settled whatever the agreement says. The questions below are the ones worth asking before you sign, because each of them has an answer in a statute rather than in a negotiation.
The short version.
It decides the commercial relationship, and almost nothing about your obligations to your tenant. That distinction is worth getting straight before the first question, because a lot of management agreements are drafted as though they allocate legal responsibility, and they cannot.
Two provisions set the boundary. Section 3 (1) provides that the Act, "except Part V.1", "applies with respect to rental units in residential complexes, despite any other Act and despite any agreement or waiver to the contrary". So nothing you and a manager agree between yourselves stops the Act applying to the unit. There is one carve-out and it matters here. Section 194 (2) provides that "Despite subsection 3 (1) and subject to subsection (3), a settlement agreed to under this section may contain provisions that contravene any provision under this Act", and section 194 (3) caps any rent increase agreed that way at the guideline plus 3 per cent. A settlement at the Board can lawfully go where the Act otherwise will not, which is worth holding on to when you read the next section on who is allowed to settle on your behalf. Section 4 (1) then provides that, "Subject to subsection 12.1 (11) and section 194, a provision in a tenancy agreement that is inconsistent with this Act or the regulations is void."
Read the second one carefully, because it is narrower than it looks. It voids a provision in a tenancy agreement. A management agreement between an owner and a manager is not a tenancy agreement, so section 4 (1) has nothing to say about it. Our reading is that the practical effect is this: your management agreement is a contract like any other and is governed by contract law, while the Act's duties attach to the unit and to whoever answers to the definition of landlord, regardless of how the two of you divided the work. An indemnity clause can decide who ultimately pays. It cannot decide who the Board names.
There is one place where the Act does reach into an owner and manager agreement, and it is worth knowing because it is the exception that proves the rule. Section 214 (1) prohibits an agent who represents a landlord in a proceeding under the Act from charging a fee based on a proportion of what is recovered or saved, above the prescribed amount. Section 214 (2) then provides that "An agreement that provides for a fee prohibited by subsection (1) is void." So a contingency fee clause in your management agreement is void by statute rather than by contract law. That is the only provision of the Act we found that voids a term of the agreement itself.
That is also why the definition of "landlord" in section 2 (1) matters less than owners expect. It includes "the owner of a rental unit or any other person who permits occupancy of a rental unit", and separately "a person, other than a tenant occupying a rental unit in a residential complex, who is entitled to possession of the residential complex and who attempts to enforce any of the rights of a landlord under a tenancy agreement or this Act, including the right to collect rent". The words manager and agent appear nowhere in it, and clause (c) has two requirements joined by "and", so it catches a manager only where both are met. The manager's real exposure comes from elsewhere, and we get to it below. If you want the clause-by-clause reading of the document itself, we set that out in what is in a property management agreement in Ontario.
Ask this first, and ask for a name and a licence number. It is the question with the widest gap between what owners assume and what the rules allow.
The Board's Practice Direction on Representation before the LTB, effective as of March 3, 2022, is direct about it: "A person who is not licensed by the Law Society of Ontario as a lawyer or paralegal may not represent a party at an LTB proceeding unless that person falls within the specific licensing exemptions established by the LSO." It then names several exemptions and says the list includes "the following unlicensed persons, among others", closing with the note that "A complete list of approved exemptions is on the LSO's website". It is not a closed list, so do not run an argument off what is missing from it.
On property managers specifically, the Practice Direction says that an unlicensed person seeking to represent a landlord "on the basis that they are a property manager may not be allowed to represent the landlord if they are in fact engaged in the business of providing legal services to multiple third parties and do not fall within one of the LSO exemptions." Two things about that sentence. The test has two limbs joined by "and". And the verb is "may not be allowed", not "will not be allowed", so this is a question the adjudicator decides on the day.
We went to the by-law the Practice Direction points at. Law Society By-Law 4, whose amendment history ends on May 28, 2026, lists at section 30 the categories who may provide paralegal-class legal services without a licence, and representation at the Landlord and Tenant Board is a paralegal-class service, because section 6 (1) of the by-law defines a proceeding to include one "before a tribunal established under an Act of the Legislature of Ontario" and section 6 (2) authorises a Class P1 licensee to represent a party in a proceeding. There are seven categories: an in-house provider employed by a single employer who acts only for that employer, legal clinic staff, not-for-profit staff, a friend or neighbour acting free of charge in no more than three matters a year, a family member acting free of charge, a Member of Provincial Parliament or their staff acting for a constituent, and a narrow human resources category. Searched across the whole by-law on 2026-09-16, the words "property manager" appear zero times. There is no property manager exemption.
So the honest position, and it is ours as much as anyone's: a manager who is genuinely the employee of one owner and acts only for that owner can fit the first category. A management company appearing for many separate owner-clients fits none of the seven, and that is exactly why the Practice Direction's test is phrased around "multiple third parties". Ask your prospective manager which of those two they are, and what they do when a hearing is contested.
Two more lines from the same document are worth having in front of you. On authority, once an agent is accepted: "Unless the LTB is provided with evidence of any express limitation placed upon an Agent's authority, the Agent is permitted to act in lieu of the party for all purposes, including conducting examinations and making submissions, giving evidence and entering into consent orders and mediated agreements that are legally binding upon the party." Your manager can settle your case. If you want a limit on that, it has to be in writing and the Board has to be told. And on your absence: "An unlicensed person seeking to represent a party who is not present for the proceeding must provide the LTB with written authorization from the party."
One thing that is not restricted, and it is worth knowing so the question stays proportionate. The Practice Direction records that in Rivera v. Eleveld, 2022 ONSC 446, the Divisional Court confirmed that an agent signing a notice of termination on behalf of a party does not need to be licensed. Serving your notices is not the problem. Arguing your case is.
You stop being entitled to rent, and the two provisions that do it work differently. Ask who is responsible for issuing the lease and for putting your legal name and address on it.
Section 12 (1) requires every written tenancy agreement entered into on or after June 17, 1998 to set out "the legal name and address of the landlord to be used for the purpose of giving notices or other documents under this Act". Section 12 (2) requires a signed copy to reach the tenant within 21 days of the tenant signing and returning it. Section 12 (3) covers an oral agreement. Then section 12 (4) is the sanction: until the landlord has complied, "(a) the tenant's obligation to pay rent is suspended; and (b) the landlord shall not require the tenant to pay rent." There is no ceiling on that. Section 12 (5) is the relief, and it is complete: once you comply, you "may require the tenant to pay any rent withheld". So section 12 costs you cash flow rather than money, and it costs it for exactly as long as the breach lasts.
Section 12.1 is the standard lease provision, and it is the one that can cost money outright. It does not name the standard lease or a date. It requires a tenancy agreement of a "prescribed class" to be in "the form prescribed", and the date and the form come from O. Reg. 9/18, which prescribes April 30, 2018 and the Residential Tenancy Agreement (Standard Form of Lease). The sequence then runs like this, and the clocks do not start where owners expect.
Take an Ottawa duplex. The tenant demands a compliant lease in writing on Monday 2026-10-05. That right exists "once during the tenancy", under section 12.1 (5). Section 12.1 (6) lets the tenant withhold rent payments becoming due after 21 days have elapsed since the demand, so the 21 days run out on Monday 2026-10-26 and the rent the tenant may withhold is the payment due on Sunday 2026-11-01. Section 12.1 (7) caps the total at one month's rent, and section 12.1 (8) stops the withholding on the day you comply, so complying late still limits the damage. Then section 12.1 (9) is the one to diarize: you may require that money back only if you comply "no later than 30 days after the date of the first rent payment withheld", which here is Tuesday 2026-12-01. Miss that date and the month is gone for good, because subsection (9) says "only if". Subsection (10) settles the separate question, and it runs your way: you may require the money back even if the tenant never signs the proposed lease.
Section 12.1 (11) adds that the tenancy is not void or unenforceable just because the lease was wrong, and section 12.1 (12) confirms section 12 keeps running alongside. So the two can bite at once. Ask who holds the lease templates, who checks the name and address, and what happens on the day a demand letter arrives while your manager is on holiday.
You do, on both counts, and the second one is an annual liability that owners forget exists. Ask how it is calculated and when it is paid.
Section 106 (2) caps a rent deposit at the lesser of one rent period and one month. Section 106 (3) says that if the lawful rent increases, the landlord "may require the tenant to pay an additional amount to increase the rent deposit up to the amount permitted". That is permissive and it is the part that gets remembered. Section 106 (6) is mandatory and it runs the other way: a landlord "shall pay interest to the tenant annually on the amount of the rent deposit at a rate equal to the guideline determined under section 120 that is in effect at the time payment becomes due."
Section 106 (7) is how the two meet, and it is a one-way mechanism rather than a mutual set-off. It lets the landlord deduct, from the interest owing, the amount by which the permitted deposit exceeds the deposit actually paid, and the deducted amount "shall be deemed to form part of the rent deposit paid by the tenant". Where the deposit already equals a month's rent and the increase is exactly the guideline, the interest and the top-up are the same figure and the deposit is corrected without cash moving. Where the deposit is short of a month, or the increase is an above-guideline one under section 126, they are not the same figure and cash has to move. Either way it only happens if somebody runs the calculation every year. Section 106 (9) says what happens if it is not run: the tenant "may deduct the amount of the payment from a subsequent rent payment", without asking anyone. Section 106 (10) requires the deposit to be applied to the last rent period.
The question to ask is not whether the manager tracks deposits. It is whether they run the section 106 (6) interest annually, whether they apply section 106 (7) at the same time, and whether the deposit register transfers to you in a usable form if you leave.
The answer is different in the next municipality over, which is what makes this one worth asking before you sign rather than after an inspector calls. Section 224 (1) of the Act gates the provincial maintenance standards in O. Reg. 517/06 to a complex in a local municipality where "there is no municipal property standards by-law that applies to the residential complex", or where there is one and prescribed circumstances apply. Nothing has ever been prescribed for that second limb.
So where your municipality has a full property standards by-law, the by-law is the instrument an inspector enforces and O. Reg. 517/06 largely is not. Where it has none, the province's standards fill the gap. And where the by-law is exterior-only, section 4 of O. Reg. 517/06 splits the building, with the by-law outside and the regulation inside. We set the whole fork out in what to do if you get a work order on an Ontario rental.
Here is the practical trap, and it is a good test of a manager. Ask them the minimum temperature you have to maintain. If the answer is twenty degrees Celsius under section 15 (1) of O. Reg. 517/06 and nothing else, they have given you the rule that may not bind your building at all. The same twenty degrees sits in section 4 (2) of O. Reg. 516/06, in near-identical words, and that one is not gated by section 224 (1) at all, because it comes through the definition of "vital service" in section 2 (1) of the Act. Two limits on it, and both bite on a duplex. Section 4 (2) operates "For the purposes of subsection (1)", so it runs inside the September 1 to June 15 window that subsection (1) prescribes. And section 4 (3) disapplies it "to a rental unit in which the tenant can regulate the temperature and a minimum temperature of 20 degrees Celsius can be maintained by the primary source of heat", which covers a separately heated unit with its own thermostat. Section 15 (2) of O. Reg. 517/06 carries the identical carve-out. O. Reg. 517/06 itself carries no date range at all.
A manager who can tell you which kind of by-law your municipality has, and can name both provisions, is telling you something about how they will handle an inspection. One who cannot is going to find out at the same time you do.
Possibly your manager, and that is not obvious from the agreement. The Building Code Act, 1992 defines "owner" for its property standards sections to include "the person for the time being managing or receiving the rent of the land or premises in connection with which the word is used, whether on the person's own account or as agent or trustee of any other person, or who would receive the rent if the land and premises were let", and also a lessee required by the lease to repair and maintain. Note the word "or": a manager who never touches rent still qualifies by managing.
The appeal follows service. Section 15.3 (1) gives it to "An owner or occupant who has been served with an order", within 14 days after being served, by registered mail to the secretary of the property standards committee. Section 15.2 (3) provides that the order "shall be served on the owner of the property and such other persons affected by it as the officer determines". Service on the owner is mandatory and everything beyond that is the officer's discretion, so because the section 15.1 (1) definition of owner takes in the person managing or receiving the rent, a manager who answers that definition sits inside the mandatory limb rather than the discretionary one. Section 15.3 (2) then deems an unappealed order confirmed.
Two further limbs are worth knowing. Section 15.3 (3.1) lets the committee, among other things, "Extend the time for complying with the order", subject to the committee's opinion that doing so maintains the general intent of the by-law and the official plan. And section 15.3 (4) gives a further appeal to the Superior Court of Justice, from the committee's decision, within 14 days after a copy of that decision is sent, and it takes two steps: notifying the clerk of the municipality in writing and applying to the court.
Compare that with the Act's own route, which applies where there is no by-law. Section 226 (1) gives the landlord 20 days after the day the order is issued to apply to the Board, on an L6 at $201, and section 226 (2) lets the Board "(a) confirm or vary the inspector's work order; (b) rescind the work order, if it finds that the landlord has complied with it; or (c) quash the work order." Different forum, different clock, different verbs.
And the cost of ignoring a by-law order is larger than the appeal. Section 15.4 of the Building Code Act, 1992 lets the municipality carry out the repair or demolition itself where an order is not complied with, provides that it is not liable to compensate the owner for doing so, and gives it a lien on the land for what it spent, with priority lien status as described in the Municipal Act, 2001. Clause 15.2 (2) (c) requires the order itself to warn you of that. This is the largest number on the whole topic and it is not a fine. The question for a manager is simple: when an order lands, who reads the top of it to work out which statute it came from, and on what day?
Nine categories of payment and nothing else, and the answer to the second half is that your manager can answer for it personally. This is where the manager's real exposure lives, and the larger part of it does not turn on the definition of landlord at all.
On charges, section 134 prohibits collecting amounts other than lawful rent, and section 17 of O. Reg. 516/06 sets out the nine exemptions from it. Read as a practical list for an ordinary rental, the useful ones are additional and replacement keys or entry devices at direct cost, a refundable key deposit, the bank's own NSF charge, an administration charge for an NSF cheque of not more than $20, and a payment in settlement of a court action or a Board application. Three of the nine are confined to mobile home parks, land lease communities or transfers between exempt units. Anything outside those nine is an illegal charge.
Now the exposure. Section 234 opens "A person is guilty of an offence if the person," not "a landlord", and its clauses include charging or collecting in contravention of section 134 and charging rent greater than the Act permits. One qualification on that, because it cuts against the point: clause 234 (l) works through section 134, and section 134 (1) opens "Unless otherwise prescribed, no landlord shall", so that route does run back through the definition. The three that follow do not. Section 235 (1) is more direct still: "Any landlord or superintendent, agent or employee of the landlord who knowingly harasses a tenant or interferes with a tenant's reasonable enjoyment of a rental unit or the residential complex in which it is located is guilty of an offence." Section 235 (2) carves out the carrying out of repairs, maintenance and capital improvements, unless the timing or manner of doing them is intended to harass. Since 2026-07-01 the maximum fine under section 238 is $100,000 for a person other than a corporation and $500,000 for a corporation. Those are maximums rather than tariffs, and they are bounded: section 239 (2) bars a proceeding for an offence more than two years after the date it was committed, and section 29 (2) gives a tenant one year to apply under paragraphs 2 to 6.
The Board can reach a manager too. Paragraphs 2 to 6 of section 29 (1) let a tenant apply for an order about what "the landlord, superintendent or agent of the landlord" has done, covering withheld vital services, substantial interference, harassment, altering the locks and illegal entry. Section 31 then lets the Board order that the landlord, superintendent or agent stop, and order that they pay a specified sum to the tenant for repairing or replacing property of the tenant that was damaged and for other reasonable out-of-pocket expenses. Section 135 lets a tenant apply for an order that the landlord, superintendent or agent repay money collected unlawfully. And section 214 (1) bars an agent representing a landlord in a proceeding from charging a contingency fee above the prescribed proportion.
Read the rest of section 31 before you take too much comfort from any of that, because it runs the other way. The abatement of rent, the administrative fine of "not exceeding the greater of $10,000 and the monetary jurisdiction of the Small Claims Court", the termination of the tenancy and the further award where a tenant was induced to vacate are directed at the landlord, not at the agent. Your manager's exposure is real, and it is narrower than yours.
So an indemnity clause is still worth having, because it decides who ultimately pays. It does not decide who gets named. Ask your prospective manager what their own insurance covers and whether they have ever been named in a section 29 application.
It moves it by five days, and that is a real number on an arrears file. Section 191 (1) lists the ways a notice is sufficiently given: by hand, to an employee of the landlord exercising authority over the complex, to an apparently adult person in the unit, "by leaving it in the mail box where mail is ordinarily delivered to the person", by leaving it at the place where mail is ordinarily delivered if there is no mail box, by mail to the last known address, or by any other means allowed in the Rules. Section 191 (1.0.1) sets out a shorter list for a tenant no longer in possession.
Section 191 (3) is the deeming rule for mail: "A notice or document given by mail shall be deemed to have been given on the fifth day after mailing." Section 191 (2) is the other deeming rule in the section, and it is a cure rather than a trap, providing that a notice not given in accordance with the section is deemed validly given "if it is proven that its contents actually came to the attention of the person for whom it was intended within the required time period." Our reading is that because the mail box method in clause (1) (d) carries no deeming rule, a notice left in the mail box is given the day you leave it, while the same notice posted is given five days later. That is a reading of the section rather than something it states outright, and it is worth asking a manager whether they act on it, because it is five days on every notice for a manager who visits the property.
One thing to check against any agreement that promises electronic service. Searched across the whole Act on 2026-09-16, the words courier, email, e-mail, fax and facsimile each appear zero times. Electronic service rides on clause 191 (1) (g), the Rules, and section 213, rather than on a provision of its own.
One saving provision runs across both this section and the last one, and it is the first thing to reach for when a document turns out to be imperfect. Section 212 (1) provides that "Substantial compliance with this Act respecting the contents of forms, notices or documents is sufficient." Read the limit in it, though. It goes to what a document says, not to whether the section 12 or section 12.1 duties were performed at all, so it will not rescue a lease that was never issued.
Keep it if you have one unit, in one municipality, with a lease you issued correctly and a tenant who pays. The obligations above are all manageable by one attentive person with a calendar, and none of them needs a company behind it.
Hand it over when the number of clocks exceeds the number of times you are willing to think about them. The ones in this post alone are a 21 day lease delivery duty, a 21 day demand period, a 30 day claw-back window, an annual deposit interest calculation, a 20 day Board review, a 14 day committee appeal and a second 14 day court appeal, a five day service deeming rule, and a maintenance standard that changes at a municipal boundary. Missing any one of them costs something specific, and only the two property standards routes arrive with a piece of paper that tells you the deadline.
What the agreement should say, then, is less about the list of services and more about who owns the diary. Ask who runs the deposit interest each year, who checks which maintenance standard applies before an inspector does, who reads a property standards order on the day it lands, and who stands up at the hearing. And ask what leaves with you: the leases, the deposit register with interest paid to date, the rent increase history, the maintenance record, and the tenant contact details. That last list is contractual rather than statutory, which means it is the one part of this post the agreement really does decide, so it is worth getting on paper.
KEILTY manages residential rentals across Eastern Ontario for a flat monthly rate per unit, including in Ottawa, and the answers above are the ones we would expect any manager to give you. If your property is a duplex, triplex or small building, our small multi-family page sets out how we run one.
Can a property management agreement change my obligations to my tenant? No. Section 3 (1) of the Residential Tenancies Act, 2006 provides that the Act applies despite any agreement or waiver to the contrary. An agreement can decide who does the work and who pays if something goes wrong, but the statutory duties still attach to the rental unit and to whoever is a landlord under the Act.
Can my property manager represent me at the Landlord and Tenant Board? Only if they are a licensed lawyer or paralegal, or fall inside a Law Society exemption. The Board's Practice Direction on Representation, effective as of March 3, 2022, warns that a property manager may not be allowed to represent a landlord where they are in the business of providing legal services to multiple third parties and fall outside those exemptions. Law Society By-Law 4 contains no property manager exemption.
What happens if my tenant never gets the standard lease? The tenant may demand one in writing once during the tenancy, and if 21 days pass without compliance may withhold rent becoming due after that, up to one month's rent. You can require that money back only if you comply within 30 days after the date of the first withheld payment. Separately, section 12 (4) suspends the obligation to pay rent until your legal name and address and a signed copy of the agreement have been provided.
Who pays interest on a rent deposit in Ontario? The landlord. Section 106 (6) requires interest to be paid to the tenant annually at the guideline rate in effect when payment becomes due. Section 106 (7) lets the landlord deduct the deposit top-up from that interest, and section 106 (9) lets a tenant who is not paid deduct the amount from a later rent payment.
Which maintenance standard applies to my rental property? It depends on your municipality. Section 224 (1) applies O. Reg. 517/06 where there is no applicable municipal property standards by-law. Where there is a full by-law, the by-law governs and an order comes under the Building Code Act, 1992 instead. The twenty degree minimum in section 4 (2) of O. Reg. 516/06 is not gated that way at all, because it runs through the definition of a vital service, but it applies only in the September 1 to June 15 window and not where the tenant can regulate the temperature and the primary heat source can hold 20 degrees.
Weighing up a management agreement and want a second read on what it does and does not cover? Tell us about the property and A.J. Keilty will call you within 20 minutes in business hours.
This post is general information about Ontario residential tenancy law as of 2026-09-16, not legal advice. Legislation, regulations, by-laws and tribunal practice change. For advice on a specific property or situation, speak with a lawyer or licensed paralegal.
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