Canada’s national vacancy rate hit 3.1% in 2025, the highest in four years, according to the liv.rent 2026 Rental Market Trend Report. That single number tells you the rental market has shifted. Landlords who once had dozens of applicants per unit now face more competition to fill their properties. Asking rents are dropping in Toronto, Vancouver, Calgary, and Ottawa. And the way landlords choose who gets the apartment has changed along with it.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The gap between what tenants believe and what landlords report matters because it shapes how each side approaches the rental process. Renters assume landlords are making money, so they often accept higher rents or stricter terms without pushback. Meanwhile, nearly half of landlords say the numbers don’t add up — and that pressure affects who they approve and how quickly. The result is a screening process that’s more cautious in some ways and more flexible in others. Here’s what you actually need to know.
Key Takeaways About Tenant Screening in Canada
What I tend to notice is that most people — both landlords and renters — overestimate how standardised the screening process is. There’s no single formula. Each landlord weighs things differently based on their property type, local market, and how much risk they can absorb. The term tenant screening covers everything from credit checks and employment verification to rental history and reference calls, but the order of importance shifts depending on who’s doing the asking.
What Landlords Look For First
The basics haven’t changed much. Landlords still want to know you can pay the rent and that you won’t damage the property. But the current market — with rising vacancy, falling rents, and more concessions — has shifted how strictly landlords apply those standards. In cities where demand has softened, some landlords are loosening income requirements or accepting shorter rental histories. In tighter segments, especially for lower-rent units, competition remains high and screening stays strict.
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| Screening Factor | Why Landlords Care | Where It Gets Tricky |
|---|---|---|
| Income-to-rent ratio | Shows the applicant can afford the rent month to month | Self-employed income, gig work, and tips are harder to verify |
| Credit score | Indicates past payment behaviour and debt load | Doesn’t capture rent payment history; newcomers often have no score |
| Rental references | Past behaviour is the best predictor of future behaviour | Previous landlords may be biased or hard to reach |
| Employment verification | Confirms stable income and job security | Doesn’t guarantee future income; job changes happen |
What’s worth weighing here is the mismatch between what landlords check and what actually predicts tenant behaviour. A credit score tells you about debt, not about whether someone pays rent on time. A landlord reference can be unreliable if the previous owner wants the tenant gone. I’d put more weight on consistent income documentation and a conversation with the applicant than on a single number from a credit bureau.
The CMHC reports that vacancy rates rose across all rent quartiles in 2025, but the lowest-cost units remain extremely tight. That means the screening process for a $1,200 basement apartment in Toronto is still highly competitive, while a $2,800 two-bedroom in a new building may come with more flexibility and even move-in incentives.
Where Tenant Screening Goes Wrong
Relying on Credit Scores Alone
Credit scores are designed for lenders, not landlords. They don’t include rent payment history, utility bills, or any other recurring housing cost. The CMHC notes that tenant turnover is highest in more expensive units, meaning tenants in higher-rent brackets move more often — and their credit scores may not reflect that they’ve always paid rent on time. A newcomer with a strong income but no Canadian credit history can look like a risk on paper, even if they’re a reliable tenant. Landlords who skip a manual income review and rental history check often miss good applicants.
Not Verifying Income Properly
Pay stubs are easy to fake. Bank statements show deposits but not their source. The IBISWorld apartment rental industry report notes that the market is becoming bifurcated: well-located, professionally managed properties maintain stable occupancy, while secondary assets face more leasing pressure. Landlords in the second group are more likely to cut corners on verification to fill units faster. That’s where problems start. Best practice is to call the employer directly, request three months of bank statements, and cross-check the name on the account with the applicant’s ID.
Skipping the Lease Walkthrough and Written Rules
Ontario’s new rules under Bill 60 and Bill 97, effective July 1, 2026, allow tenants to install their own air conditioning units as long as they give written notice with details on energy efficiency and expected usage. Landlords who never set clear written expectations about A/C installation, pet policies, or maintenance responsibilities end up in disputes. A written set of property rules, signed by the tenant before move-in, prevents most of these conflicts. That’s a simple step many landlords skip when they’re in a hurry to fill a unit.
Ignoring the Legal Side of Rejection
Landlord-tenant law in Canada varies by province, and rejecting an applicant on the wrong grounds can lead to a human rights complaint. You cannot reject someone based on family status, disability, race, religion, or source of income (including social assistance or child support) in most provinces. Landlords who don’t know these rules and screen based on gut feeling rather than documented criteria open themselves up to liability. For complex situations, a JustAnswer Canada lawyer can clarify whether a specific screening decision is legal in your province.
How to Screen Tenants Step by Step
Application and Documentation
The first step is a standardised rental application form. Every applicant fills out the same form so you can compare them fairly. Request photo ID, proof of income (pay stubs, tax returns, or bank statements), and permission to run a credit check. The key here is consistency — if you ask one applicant for three months of bank statements, ask everyone for the same thing. Keep copies of all applications and your notes on why you accepted or rejected each one, in case you need to defend your decision later.
Verification and Background Checks
Call the employer using the number on the company website, not the one the applicant provides. Contact previous landlords and ask specific questions: Did they pay on time? Did they give proper notice? Were there any damages beyond normal wear and tear? Run a credit check through a service like Equifax or TransUnion. For added security, landlords with multi-unit properties sometimes install a Ring Alarm Kit to monitor common areas and deter theft, though this doesn’t replace proper tenant screening.
Lease Signing and Move-In
Once you approve an applicant, draw up a lease that complies with your province’s standard lease requirements. Ontario’s standard lease is mandatory. Include any rules about A/C installation, pets, guests, and maintenance responsibilities. Schedule a walkthrough with the tenant before move-in, photograph the unit’s condition, and have both parties sign the inspection report. This protects both sides when the security deposit comes up at move-out.
What Ontario’s New Rules Mean for Landlords
Bill 60 and Bill 97, effective July 1, 2026, made several changes that affect how landlords manage tenants. The non-payment eviction notice period dropped from 14 days to 7 days, which speeds up the process for landlords dealing with late rent. Landlords evicting for their own use with an N12 notice can avoid paying one month’s compensation if they give at least 120 days’ notice and the termination date falls on the last day of a rental period. Tenants can now install their own A/C units with written notice, and landlords can charge a seasonal rent increase for electricity costs if utilities are included in rent.
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| Change | Previous Rule | New Rule (Effective July 1, 2026) |
|---|---|---|
| Non-payment eviction notice | 14 days to pay or vacate | 7 days to pay or vacate |
| Tenant A/C installation | Landlord could deny or restrict | Tenant can install with written notice about energy efficiency |
| N12 own-use compensation | 1 month’s rent required | Waived if 120+ days’ notice and termination on last day of rental period |
| LTB decision challenge window | 30 days | 15 days |
These changes apply to Ontario only. Other provinces have their own rules. The faster eviction timeline and the A/C installation right are the two changes that will affect day-to-day landlord-tenant relationships the most. Landlords in Ontario should update their lease templates and property rules to reflect these new requirements before July 2026.
Frequently Asked Questions
Can a landlord reject me for having no Canadian credit history? ▾
What income do landlords typically require to approve an application? ▾
Can a landlord charge a higher rent deposit or application fee? ▾
What happens if a tenant lies on their application? ▾
Can a landlord reject a tenant who uses rental assistance or housing benefits? ▾
How long does a typical tenant screening take? ▾
The Rental Market Has Shifted — Screening Should Too
The days of landlords having all the leverage are not gone, but they’re more localised than they used to be. In expensive, newly built units in Toronto and Vancouver, tenants have more choices and more negotiating power. In the lowest-rent segments, competition remains fierce and screening stays strict. The landlords who adapt their screening criteria to match the market — using income verification over credit scores alone, offering incentives to reliable tenants, and staying current with provincial law changes — are the ones who will keep their units filled. The ones who rely on old habits risk longer vacancies and more tenant problems.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read The Impact of Immigration on the Canadian Housing Market.
Sources and Further Reading
The Future of Canadian Housing: Predictions from Top Experts — Expert forecasts on where Canadian housing and rental markets are headed next.
Is the Condo Market in Canada a Safe Investment or a Risky Bet? — A closer look at condos as rental properties and what investors should watch for.
liv.rent (2026). 2026 Canada Rental Market Trend Report. 🔗
CMHC (2026). 2026 Mid-Year Rental Market Update. 🔗
IBISWorld (2026). Apartment Rental Industry in Canada. 🔗
Ontario Legislative Assembly (2026). Bill 60 and Bill 97. 🔗
