You just finished getting all your taxes completed on your latest property acquisition, when an email comes in from your tenants who just started renting from you the month before.  They are asking you for a rent receipt.  You think about it for a minute, do a quick online search, and find something that looks like an official rent receipt.  You quickly complete the receipt and send it back to the tenants.  But did you actually satisfy your obligations under the Residential Tenancies Act?

Each province is governed by some set of laws and rules that govern landlords and tenants.  In Ontario, it is the Residential Tenancies Act.  There are laws that stipulate the rights and obligations of both landlords and tenants. There are peculiarities and differences in these laws, depending on the province.

As a landlord in Ontario, you are obliged to issue a receipt for rent to your tenant upon request, once it can be established that payment has been made, regardless of the medium of payment: cash, cheque, electronic transfer, or other methods of payment. It is also important to note that a rent receipt should be free.  So if your tenant requests one, you cannot charge them a special fee.

Your obligation as a landlord to issue a receipt for rent is clearly stated in section 109 of the Ontario Residential Tenancies Act, this includes former tenants as well.  The section reads:

109. RECEIPT FOR PAYMENT —(1)  A landlord shall provide free of charge to a tenant or former tenant, on request, a receipt for the payment of any rent, rent deposit, arrears of rent or any other amount paid to the landlord.

(2)  FORMER TENANT–Subsection (1) applies to a request by a former tenant only if the request is made within 12 months after the tenancy terminated.

What Constitutes a Valid Rent Receipt?

Many landlords simply walk into a store and purchase receipt books or search online for something that seems fitting. Often receipts like this don’t meet the legal standards and requirements set out by the Residential Tenancies Act.  But you might be asking yourself – what does?

Section 9 of Ontario regulation 516/06 states that a document constitutes a receipt for the purposes of section 109 of Residential Tenancies Act if it includes, at a minimum:

(a) The address of the rental unit to which the receipt applies;

(b) The name of the tenants to whom the receipt applies;

(c) The amount and date for each payment received for any rent, rent deposit, arrears of rent, or any other amount paid to the landlord and shall specify what the payment was for;

(d) The name of the landlord of the rental unit; and

(e) The signature of the landlord or the landlord’s authorized agent. 

So if you are missing any of the above information on your rent receipt that you provide to a tenant then it would not be considered as a valid receipt.  In common practice, you often see erroneous receipts issued electronically, because the signature of the landlord or landlord’s authorized agent is not present.

Are There Times When I Don’t Have To Provide A Receipt?

It is a responsibility and obligation of the landlord under the Residential Tenancies Act to provide rent receipts.  Refusing to do so could mean fines paid to the Landlord-Tenant Board or labeled as interference with the tenants reasonable enjoyment of the unit and a rent abatement for your tenants.  This could also include an order from the board forcing the landlord to provide those receipts by a specific date.  There may be instances where you were asked to provide a receipt but the payment defaults or you have not actually received payment from the tenant.

First of all, never provide a tenant with a receipt without having received payment.  This avoids creating confusion around whether a payment was actually made or not.  Along the same lines, don’t create an automated procedure for issuing receipts unless you can ensure that payments have actually been made.

It is also a good idea to note the payment type on the receipt, just in case a cheque you received bounces.  You should checkout the attached receipt as a starting point.  I would prefer to delay issuing a receipt until a payment had cleared the bank.  Once it had cleared, I would provide the receipt if requested by the tenant.

Just remember the process for issuing the receipt is based on a tenants request for them.  Many tenants only ask for receipts at the end of the year for tax purposes.  This gives you an opportunity to group your rent receipts together to make the process easier and quick.