Posted July 25, 2022 | by Portsmouth Residential
What Happens When A Tenant Doesn’t Pay Their Rent in Ontario?
Your Tenant Hasn’t Paid Their Rent?
After taking the time to seek out and screen a suitable tenant for your rental property, you might think the most challenging part is over. But what happens if your tenant doesn’t pay their rent when it’s due?
Late payments will likely come up in your career as a landlord, but don’t panic. The process of collecting payment will vary, depending on the circumstance, but there can be a simple solution. Before jumping ahead to consider eviction, there may be some more appropriate options to start with.
Talk to Your Tenant
We’re all human, so before you start to assume the worst, consider having a friendly conversation with your tenant to ask why you didn’t receive payment. Start with a written reminder through text or email. Depending on your relationship with the tenant, a phone call or in-person visit might be better suited. You might come to realize they simply forgot, or the payment didn’t go through due to a processing error.
Sometimes though, their reason might be due to something more significant, such as a job loss or illness. In that case, you can decide if you’re willing to discuss a payment plan or another compromise that works for you both.
If your tenant has a good record of paying their rent on time and is someone you would like to keep around, you might be more willing to make a deal. However, if this tenant gives you trouble with payment every month, and you don’t mind the possibility of losing them, then you should get some professional help.
Apply for an Order to Pay Without Eviction
A simple conversation with the tenant may not be enough to solve the issue, and that’s why resources like the Landlord Tenant Board (LTB) exist. Regardless of your relationship with the tenant, failure to pay rent is a breach of the rental agreement and should be addressed.
Suppose you feel the need for a little extra support in getting payment from your tenant without evicting them. In that case, you can contact the LTB to apply for an order of payment by filling out an L9 form. This form only applies if the tenant is still living in the unit and will tell them to pay you the money they owe. A formal notice like this should create a sense of urgency for your tenant without threatening the relationship.
You can provide a ‘due date’ for the payment based on the tenant’s current rental policy. This is called a ‘Termination Date’. A minimum of 7 days notice is required for those on daily or weekly terms, and 14 days for any term one month or longer. If, after providing this document from the LTB, you still have not received payment, you can choose to give the tenant the option to leave the property.
Apply for an Order to Pay or Move Out
Giving your tenant a nudge to move out might be a smart move if you don’t think payment is coming any time soon. The N4 form from the LTB will notify your tenant that they need to either pay the rent or move out. If the tenant chooses to move out, this will open up the unit for someone who may be more suited for your property and the expenses involved.
Of course, if the tenant does choose to move out, you may not receive your rent payment. Weigh out potential wins and losses with this option after communicating with your tenant. Assuming they have another suitable housing option, they might be grateful for the opportunity to leave without digging a deeper hole.
If the tenant chooses to pay, they must pay everything they owe, including any amounts due after receiving the notice. For example, if the rent payment for December 1st is late, and the termination date is January 5th. In that case, the tenant will owe the full rent payment for December and January to void the notice.
Apply for an Order to Pay and Move Out
At this point, if any rent payments have not been received and the termination date has passed from form N4, it’s time to take the next step. You can apply to the LTB for an order that evicts the tenant and requires them to pay all of the money that is owed.
Filling out form L1 is essentially the final step and should be considered only after exhausting all the above options. Most people don’t enjoy evicting a tenant because it’s messy, and you inevitably feel like the bad guy. However, after a reasonable effort to work with your tenant to find a solution, it might be your best option.
Trusting the legal process is very valuable as these situations heighten to reduce your losses while maintaining professionalism. Taking matters into your own hands can get you into trouble and prolong the stress that’s associated with it. Ultimately, the goal is to reach an agreement that works for both you and your tenant without disrupting the relationship. Following these steps will give you the best chance of walking away with both.
If Your Tenant Has Moved Out – Apply for an Order to Collect
Unfortunately, there are times when a former tenant may still owe you money for rent or other compensation. The LTB can still support you, even after your tenant has moved out, when you fill out form L10 to apply to order your former tenant to pay you what they owe.
You can only file this application within a year of the tenant moving out.
Attend The Hearing
After filing any of these applications, you will receive notice for a hearing date with the LTB to present your case on why they should help you move forward with the order. We recommend attending the hearing and following all directions given by the LTB to increase your chances of successfully receiving payment or moving through the eviction process.
Your tenant will also receive notice of the hearing and will have an opportunity to attend and argue their case if they feel the order is not appropriate. Again, this is where adequate communication with your tenant prior to taking legal action can be helpful. Let them know you are eager to work with them to resolve the issue, and they may be more willing to work with you too.
Reducing Your Chances of Late Rent Payments
There’s no way to guarantee your tenant will make every payment on time. Still, you can fine-tune your process early on to minimize the risk by implementing practices such as:
- Thorough tenant screening
- Electronic rent collection
- Straightforward lease agreement
Overcoming obstacles as a landlord, like late payments, can be overwhelming. Taking the appropriate steps and seeking professional help can make the process a lot more worthwhile. If you are looking for more support with property management, Portsmouth Residential is here to help, www.portsmouth.ca.