A Canadian Lease Guarantee Agreement is a legally binding contract in which a third party (the Guarantor) agrees to assume secondary liability for a tenant’s obligations under a residential lease. The guarantee provides the landlord with financial security if the tenant fails to pay rent, causes damage beyond normal wear and tear, or otherwise breaches the lease agreement. Unlike a co-signer arrangement where the person signs the lease itself, a guarantor signs a separate guarantee document and does not become a party to the tenancy.

The distinction between guarantors and co-signers is legally significant in Canadian rental law. A co-signer is considered a tenant under the lease and assumes primary, joint-and-several liability alongside the named tenant. The co-signer typically has the right to occupy the rental unit. A guarantor, by contrast, assumes only secondary liability. The landlord must first exhaust reasonable efforts to collect from the tenant before making a demand on the guarantor, and the guarantor has no occupancy rights.

In Ontario, the Landlord and Tenant Board (LTB) does not have jurisdiction over guarantors, as a guarantor is not a tenant within the meaning of the Residential Tenancies Act, 2006. This means that if a tenant defaults and the landlord wishes to pursue the guarantor, the landlord must bring a civil action in the Ontario Superior Court of Justice or Small Claims Court, not before the LTB.

Alberta imposes a unique procedural requirement through the Guarantees Acknowledgment Act (R.S.A. 2000, c. G-11). A personal guarantee in Alberta must be accompanied by a certificate of acknowledgment signed before a lawyer, notary public, or commissioner of oaths who has examined the guarantor apart from the other parties and confirmed that the guarantor understands the contents and effect of the guarantee. Without this acknowledgment, the guarantee may be unenforceable.

In British Columbia, the Law and Equity Act does not require a guarantee to be in writing for it to be enforceable, though a written agreement provides far greater certainty. In Manitoba, the repeal of the Statute of Frauds in 1988 similarly permits oral guarantees, though they are extremely difficult to prove.

Canadian courts interpret guarantees strictly against the party seeking to enforce them (the landlord). If the guarantee is ambiguous, the ambiguity is resolved in favor of the guarantor. This makes precise drafting essential, particularly regarding the scope of liability, duration, and conditions for release.

When a prospective tenant has insufficient credit history, limited employment history, or is a recent immigrant to Canada and the landlord requires additional financial assurance before agreeing to the tenancy.

When a young adult or student is renting their first apartment and a parent or family member is willing to guarantee the lease obligations to help the tenant qualify for the unit.

When a landlord is renting to a new business owner or self-employed individual whose income documentation may not meet traditional screening criteria, and a third party is willing to backstop the rent obligation.

When a tenant has been evicted or has a history of late payments, and the landlord is willing to extend a new tenancy only with a guarantee from a creditworthy third party.

When a corporate employer sponsors an employee’s housing and agrees to guarantee the lease as part of a relocation package.

Without a properly drafted guarantee agreement, landlords face the risk of an unenforceable guarantee if they need to pursue the guarantor in court. In Alberta, the absence of the required acknowledgment certificate renders the guarantee void. In Ontario, pursuing a guarantor requires a separate civil court action outside the LTB, making clear documentation essential.

Guarantor Identification — The guarantor’s full legal name, date of birth, address, and contact information. The date of birth confirms that the guarantor has reached the age of majority in their province of residence (18 in Alberta, Manitoba, Ontario, PEI, Quebec, and Saskatchewan; 19 in BC, New Brunswick, Newfoundland and Labrador, Nova Scotia, Northwest Territories, Nunavut, and Yukon).

Scope of Guarantee — Whether the guarantee covers rent payments only or all obligations under the lease, including damages, legal costs, and other amounts. Canadian courts interpret guarantees strictly, so the scope must be clearly defined to be enforceable.

Maximum Liability Cap — The maximum aggregate amount for which the guarantor is liable. Setting a cap protects the guarantor from unlimited financial exposure and provides certainty for all parties.

Duration — Whether the guarantee covers only the initial fixed term of the lease or extends through renewals and month-to-month conversions. If the guarantee is open-ended, the guarantor’s exposure increases significantly.

Notice and Demand Requirements — The landlord’s obligation to notify the guarantor of the tenant’s default before making a demand for payment, including the notice period and method of delivery. This gives the guarantor an opportunity to cure the default before being held financially responsible.

Release Conditions — The circumstances under which the guarantor is released from the guarantee, including expiration of the guarantee period, mutual agreement, material lease modifications without consent, or the landlord’s fundamental breach.

Alberta Guarantees Acknowledgment — If the guarantee involves an Alberta guarantor or Alberta property, the formal acknowledgment certificate required by the Guarantees Acknowledgment Act must be included. Without it, the guarantee is unenforceable in Alberta.

Enforcement Jurisdiction — A clear statement that provincial tenancy tribunals (such as the Ontario LTB) do not have jurisdiction over guarantors, and that the landlord’s remedy against the guarantor is through civil court.

Independent Legal Advice — An acknowledgment that the guarantor was advised to seek independent legal advice before signing, which strengthens the enforceability of the guarantee if challenged.