The process of extending a tenancy beyond its original term. In Ontario, residential leases automatically convert to a month-to-month tenancy after the initial fixed term expires -- the tenant is not required to sign a new lease, and the landlord cannot force them to. Both parties can agree to a new fixed-term lease, but the tenant cannot be penalized for choosing to stay month-to-month. All other terms of the original lease continue to apply.
Why It Matters
Ontario's automatic month-to-month conversion surprises many new landlords. You cannot refuse to renew a lease or require a tenant to sign a new one with different terms. The tenant has the right to stay indefinitely under the same terms, with rent increases limited to the annual guideline (for rent-controlled units). This is a fundamental feature of Ontario tenancy law that shapes the landlord-tenant relationship.
Real-World Example
Your tenant signed a one-year lease for a condo near Eglinton and Laird starting September 1, 2024. The lease expires August 31, 2025. You send the tenant a message asking them to sign a new two-year lease at a higher rent. Under Ontario law, the tenant is not required to sign a new lease. The tenancy automatically converts to month-to-month on September 1, 2025, under the exact same terms. You can only increase the rent by serving an N1 notice with 90 days notice, and the increase is limited to the provincial guideline if the unit is rent-controlled.
Ontario & GTA Context
Section 38 of Ontario's Residential Tenancies Act provides that a tenancy automatically renews on a month-to-month basis after the fixed term expires, unless the tenant gives proper notice to leave. The landlord cannot require the tenant to sign a new lease, agree to new terms, or vacate at the end of the term. The only way for a landlord to increase rent is through the proper N1 notice process with 90 days written notice. For rent-controlled units, the increase cannot exceed the annual guideline. This automatic renewal is one of the strongest tenant protections in Canadian law.
How It Works in Practice
If you are a landlord, do not rely on lease expiry as a mechanism to change terms or raise rent beyond the guideline. Plan your rental income projections assuming the tenant will stay indefinitely at controlled increases. If you are a tenant, know that you do not need to sign a new lease or agree to any changes when your lease expires -- your tenancy continues automatically with the same rights and obligations.
Common Questions
Does a tenant have to sign a new lease when the old one expires in Ontario?▾
Can a landlord change the terms of a lease at renewal in Ontario?▾
Related Guides
Related Tools
Need Guidance?
Get a second opinion on your real estate situation. No pressure, no obligation.
The RAZZ Report
Market insights and practical advice delivered to your inbox.