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Guide to renting your first home as a newcomer in Canada

Looking to rent?

Here is what you need to know before you sign your rental agreement

Have you just moved to Canada and are looking to rent an apartment or house? The process could be different here than in your home country so you might be wondering what you'll need to do to secure your perfect rental.

Claude Boiron, broker at Boiron Group, is an expert at helping new immigrants find their dream rental.

“To secure housing, you'll want to make sure that you come across as appealing and trustworthy tenants," he says. “That means coming ready with proof of income, financial resources, or a guarantor, someone who promises to cover the cost of your rent if you cannot when applying for a property to rent."

We will walk you through everything you need to know in order to search for, find, and secure a place to live in Canada.

Types of rentals in Canada

There are three primary types of rentals in Canada, says Boiron. A house or townhouse, an apartment complex owned by one person or company, or a condo building.

“A condominium unit or a condo unit can look the same as an apartment building from the outside, but inside each unit is owned by an individual owner and that individual owner could be renting out their unit," says Boiron.

Condos and apartment buildings sometimes have amenities as part of the buildings such as a gym, meeting room, pool, or party room, says Boiron. Some buildings also have laundry in the apartment units while others have shared laundry rooms. What will work best for you will depend on your needs and budget.

Where to search?

Searching for rental housing can be done in a number of ways, but most people either search online, ask friends and family for leads, or hire a real estate agent, says Boiron.

If you chose to hire one, a real estate agent can help you find your future home by bringing you to places to rent or looking on your behalf if you're not in the country yet. They can also help you avoid rental fraud scams that can be targeted to newcomers, because the agent can confirm that the rentals are legitimate.

What is in a lease?

What's in a lease depends on the province or territory's laws and the landlord's lease agreement, says Boiron, who recommends that you read through your provincial or territorial government's guidelines on landlord and tenant rights and obligations before signing one. However, generally you sign a year-long lease that might specify you will pay a penalty if you leave early and that you're required to give one- or two-months' notice if you plan to move.

Some leases have to be renewed after the initial term is over, while others specify that the lease agreement transfers to a monthly basis after the first year. You can also find rentals that have shorter leases or negotiate with the landlord for a shorter lease if you need it. You may also be able to get out of the obligations of a lease and some or all of the penalties if you find a tenant to replace you if you plan on moving before your lease is up if your lease permits sub-leasing. Make sure to read the fine print of your lease agreement to understand your rights and obligations.

What are the financial aspects of signing a lease?

“In Ontario, security deposits aren't allowed on rental properties," says Boiron. “Instead, what's required is that you pay the first and last month's rent."

However, other provinces allow landlords to charge you a security deposit of half your rent that they keep and return when you move out if you have caused no damage to the suite. If you have caused damage or wear, they can keep some or all of that deposit to cover the costs of repair or things like shampooing carpets or painting.

What do you need to apply?

Applying for a rental can be a complicated process in a tight rental market, says Boiron. You want to come across as a good candidate and trustworthy and you also don't want to miss out on a rental. Bringing your documents with you when you're looking at potential new rental homes can allow you to quickly fill out an application form when you find a place you like.

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“You need to have information about yourself ready, so usually photo ID would be required, your full name, your current mailing address and other contact information, and then anything regarding your financial situation," says Boiron. “If you're employed, you'll need an employment letter from your employer confirming your employment, what your remuneration is, how long you've been working there, and whether you're full-time, salaried, contract, or part-time."

If you don't have regular income, Boison suggests bringing a bank statement or the financial information for your guarantor, who is a person who pledges to pay your rent if you're unable to.

Finally, you'll likely need a credit report. “If you have Canadian credit, a credit report is very appreciated by landlords," says Boiron.

What's included in rent?

What's included in your rent will depend on the lease agreement.

“Some rental lease payments cover things like hydro, electricity, and other utilities," Boiron says. “While others require you to set up accounts for all utilities and pay for them yourself."

You might also be asked to pay a percentage of certain utilities, he says. This often happens if you have roommates or are in a home with multiple suites. “The difficulty with that is that you will have to pay a percentage of all utility costs even if you use less electricity or water than others in the home."

You might also get access through your rental to different amenities in apartments or condos, parking spaces, storage lockers or other features. In houses, you might be able to access backyards, garages, or other outdoor spaces.

Rental discrimination

In Canada, it's illegal for landlords to discriminate against immigrants when renting.

“It's also illegal to discriminate based on race, creed, sexual orientation, sex, and many other fronts," says Boiron. “A landlord is also not allowed to discriminate on the basis of the quality of your revenue – such as if you receive money from full-time employment, from part-time employment, as a student employee, if you receive some sort of subsidy, or social assistance from the government."

If you are a single parent or have children, they also can't discriminate against you by refusing to rent to you based on those factors alone. For more information about rental discrimination, your rights, and how to report an issue if you experience it, it's important to look at the legislation or guidelines on landlord and tenant rights and obligations in your province, says Boiron.

Rights as a tenant

Tenant rights differ depending on the province you live in, but generally, says Boiron, you're entitled to the quiet enjoyment of your rented space.

“Before you start renting," says Boiron, “Do an Internet search to find out about residential tenancy rights in your province or territory so that you can better understand what your rights are."

Some fairly universal rights include the right to have things that are broken in your unit fixed within a reasonable amount of time and that your landlord must give you at least 24 hours notice before they enter the unit.

Understanding the specific tenancy rights of your province is important because it will help you know what's allowed and not allowed and suggest avenues for what to do when your rights are violated, like going to tenancy boards or tenant rights organizations for support.

Rental scams

Scams can be targeted towards newcomers who don't know enough about how renting in Canada works. There are a few common rental scams to look out for, says Boiron.

“One common scam is that someone shows you or sends you pictures of a unit and accepts money as a deposit, but they are not the landlord or the owner of that property," says Boiron. “Another common scam involves renting out a place to multiple people."

Boiron suggests avoiding scams by using trusted rental websites to search for places or working with a real estate agent who will verify that the landlord is the owner of the property.

Rent increases

“Rental increases are often legislated provincially," says Boiron. If the province where you reside has rent control, the landlord can decide to increase your rent by an allowed percentage – usually between 1% and 3%. These amounts can be found out online in advance so that you can plan for them financially. You need to get a letter from your landlord several months before an increase goes into effect.

That said, some landlords don't decide to increase rent at all, but keep your rent at the same amount for the length of time you stay in your rental.

Renter's insurance

While you don't own your home, it's important to consider getting rental insurance to cover your possessions, says Boiron.

Your landlord will have homeowner's insurance, but that will only cover the home itself. If your possessions are stolen or destroyed, it won't cover your losses. Also, getting rental insurance is important to protect against liability if your actions cause harm to your landlord's unit, the condo structure, or another unit. For example, if you leave the bath running and the water wrecks the ceiling of the unit below, you might have to pay to repair it, but renter's insurance will cover that cost if you have it.

Getting a renter's insurance policy could also help you prepare for the unexpected.

Choosing your place

Whether you're moving to Toronto, Montreal, Vancouver, Edmonton, Ottawa or a small town in the Prairies, one thing that can be difficult is deciding where to move after you've looked at all the options, says Boiron. He suggests that you take into account things like how close it is to your work, how close it is to public transportation and what schools, restaurants, banks, parks, and trails you'll be able to access locally.

“Spend some time familiarizing yourself with the neighbourhood before moving," Boiron says. “Make sure you choose a place in a location that you'll enjoy the lifestyle and the convenience."

Next step: ownership

While it's not always a simple process, finding yourself the perfect rental in Canada is exciting. Once you're settled, living in that rental should be a fun, great experience, so much so that you may eventually begin to think about purchasing your own home. If that's you and you're ready to trade rent payments for mortgage payments, book an appointment with your Scotiabank advisor today to learn more about the many mortgage options available for newcomers to Canada.

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Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific investment and or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.