What Should a Landlord Do When a Tenant Is Late With the Rent?
In Most Circumstances, Immediately Issuing An N4 - Notice to End a Tenancy Early for Non-payment of Rent Is the Appropriate Reaction When a Tenant Is Late With the Rent. In Some Circumstances a Little Patience May Be Warranted. Regardless, Understanding What to Do and How Is Highly Important.
A Helpful Guide to Getting Paid Rent When Rent Payment Is Properly Due
As a Landlord of one unit or fifty units, the perils of the profession are the same; how to select the best and most dependable tenants for your rental premises. While you can ask for references, credit reports, and employment information, it may be irrelevant insofar as what may appeared as the perfect tenant may change and that formerly perfect tenant may become deliquent in paying the agreed rent. It is at these times that most Landlords face the difficult decision of proceeding to the Landlord Tenant Board to either collect the delinquent rent and/or terminate the tenancy or trust in the assurances of the tenant that the rent will be paid up shortly.
As a Landlord considering what to do about a tenant whose rent is in arrears, it is suggested that there are two issues to consider. The first is that if you let the arrears accumulate you must face the fact that if your tenant cannot pay one month’s rent, then it is unlikely that the tenant will be unable to catch up two, three, or four, months rent arrears. The second issue is that in order to proceed quickly and efficiently before the Landlord Tenant Board it is imperative that the forms submitted properly conform directly to the standards and requirements of the Landlord Tenant Board. Failing to properly use the required forms and failing to conform to the requirements of the Landlord Tenant Board, places your matter at risk of being dismissed and thereby forcing you to start again, freshly, and while incurring further months of unpaid rent pending the eventual Hearing of your application by the Landlord Tenant Board. This position is illustrated by the case of CC (Landlord) v. JA (Tenant), SWL-00749-17 (Re), 2017 CanLII 39479 (ON LTB) which states:
The Landlord intended to seek an order for arrears and termination of the tenancy (and ‘L1’ application). However, the Landlord provided insufficient notice to the Tenant. The Notice to End a Tenancy Early for Non-payment of Rent (N4) was served on the Tenant February 28, 2017 and ought to have provided a termination date at least fourteen (14) days later. The N4 notice, however, included a termination date of March 8, 2017. As insufficient notice was provided to the Tenant, the Board is not able to consider termination of the tenancy. The Landlord was given the option to withdraw the application for termination of the tenancy on the basis of outstanding arrears. However, the Landlord chose to proceed with the application and requested and Order for the arrears only. Therefore, the only part of the application that proceeded was the claim for rent arrears. The order will be limited to rent arrears and costs only, not eviction. Pursuant to s. 87(2), I also proceeded to hear the issues raised by the Tenant.
Thus, as illustrated by the case outlined above, any action for termination of a tenancy for non-payment of rent is subject to strict rules in respect to the calculation of rent, the service of Notices, the dates of termination, and the calculation of alleged arrears, and if there is an inconsistency or error in such calculations the matter will be dismissed forcing a Landlord, regardless of how prejudicial, to start the process again.
A tenant that is late with the rent presents a landlord with the concern of how promptly to react. Additionally, when a landlord reacts, the landlord is faced with the challenge of how to react. Should the landlord discuss a payment plan with the tenant? Should the landlord issue a formal N4 - Notice to End a Tenancy Early for Non-payment of Rent? What are the requirements to properly preparing an N4? Are there rights that may be lost for failing to issue an N4? What should be expected if leniency is provided? What should be expected if an N4 is issued? Many of these questions are without an absolute 'always or never' answer that is black or white. Individual circumstances will often influence what should be done in a particular situation.
So, if you are a landlord that finds yourself in this type of stressful situation, contact Shemesh Paralegal Services to discuss your specific circumstances and to review ways to resolve, or avoid, further problems with same.