Thursday, 10 December 2015

Landlord's Own Use: Delaying the takeover.

Tenants in Ontario are fairly secure in their tenancy during the course of a fixed term.  The only legal grounds to terminate a tenancy during a fixed term (the typical fixed term is the one year lease that people sign at the beginning of the tenancy), is for cause.  "Cause" includes termination for non-payment of rent, willful or negligent damage, illegal act, impaired safety, and a few other specified grounds in the Residential Tenancies Act (RTA).  The security of a tenancy is almost as strong after a fixed term ends.  Unless a renewed fixed term is entered into, after the expiry of a fixed term a tenancy continues on a month to month basis.  This is automatic, there is nothing that either party needs to do.  A landlord can not object or refuse the continuation of a tenancy on a month to month basis.

As in fixed term tenancy, a month to month tenant can be evicted for "cause".  The cause grounds are largely the same in the month to month context as they are during the fixed term of a tenancy.   What is a bit different is that in a month to month context the landlord has the ability to terminate a tenancy at random times and unexpected times so long as notice is given under the RTA.   The type of notice I'm talking about in this article is termination for landlord's own use and for the purpose of this article I'm assuming that the N12 Notice of Termination is given in good faith and that the landlord is entitled to termination. 

A notice of termination for landlord's own use requires that a landlord give a tenant 60 days notice with the final day of the notice ending on the last day of the term (usually the day before rent is paid).   In a fixed term tenancy the Notice of Termination can not specify a termination date that is sooner than the end of the fixed term.  Hence, if a tenant has a one year or multiple year lease the tenant is protected from being evicted for landlord's own use before the expiry of the fixed term.  The end date of a fixed term tenancy is known and hence the tenant has the comfort of knowing that their tenancy is "safe" from termination until at least the end of the fixed term for landlord's own use.

In the case of a month to month tenancy, a landlord can serve a Notice of Termination any time; and so long as 60 days notice is provided the tenancy can be terminated at any time of the year.  For some tenant's this can be quite unsettling.

Consider for a moment the impact of receiving a Notice of Termination for Landlord's Own Use (Form N12) and only having 60 days to find a new place to live.  Certainly, if a tenant is young, footloose and fancy free, healthy, with minimal responsibilities, a termination in 60 days may indeed be reasonable.  However, imagine a tenant who has lived in the same unit for a great number of years, may be suffering from health problems, may have a lot of stuff in their unit, may be going on a trip, may have kids in a local school, may be financially unstable and may have dependents or responsibilities that make finding a new place in 60 days an impossibility.  What happens to the tenant who can't move or can't find a place within 60 days?  Does that tenant become homeless?

The fact is that 60 days notice in the Form N12 is only a minimum notice period.  One would hope that a landlord would take into account the circumstances of a tenant when serving the N12.  Unfortunately, it is my experience that many landlords read the 60 day notice provision as creating an inviolable right to evict without regard to a tenant's personal circumstances.  Thankfully, we have section 83 of the Residential Tenancies Act that allows the Landlord and Tenant Board to consider an appropriate termination date based on all of the circumstances.  The Landlord and Tenant Board can indeed recognize the hardship that 60 days notice causes and the adjudicator can delay the termination for longer or even deny it.

Here is an example of an actual case.  In the case of Tarsitano v. Duff, the landlord of a small apartment building established that he (age 66) did indeed require the apartment of the tenants (age 78).  The landlord was living in a 3 bedroom apartment with his wife, and three other people.  The pictures of the unit showed that the landlord's living space was very cramped and that he clearly needed more room. Hence, taking over the apartment of the tenants was considered to be something that the landlord needed to do. 

The tenants on the other hand had been in possession of their apartment, on a month to month basis, for over 15 years.  The tenants were elderly, on a fixed income, and the husband was undergoing cancer treatment and was terminally ill.   There was a recognized shortage of affordable housing (this case was in Toronto) and there was no doubt that finding a new place to move to would impose hardship on the tenants.

The Judge in this case considered the landlord's need (recognized as legitimate) and considered the circumstances of the tenants (very sympathetic).   In considering the respective positions of the parties the Judge was free to disregard the 60 day notice of termination.  He had the authority under the law of that time to exercise his discretion and do what would be considered fair.

In this case the Judge decided that the tenants should be given more time to find a new place to live.  He delayed the eviction of the tenants by 5 months thereby giving the tenants more time to make reasonable arrangements to move.  Whether 5 months is enough, not enough, or too much, is not the point.  The point is that the Judge has discretion to decide based on the circumstances of the parties.

If you are facing eviction for landlord's own use, or if you are a landlord planning to evict for own use, it is important to recognize that the Landlord and Tenant Board has the authority and jurisdiction to delay or deny eviction for landlord's own use.   It is not automatic nor guaranteed.  Hence, if you are a landlord I recommend that you meet with the tenants, deliver an N12 based on 60 days of Notice, but at the same time discuss with the tenants or invite the tenants to propose a satisfactory timeline that works.  If you can agree to a termination date sign off on a Form N11 that is available from the Landlord and Tenant Board website.

If you are a tenant and your landlord is being entirely inflexible with respect to the termination date go ahead and prepare for a hearing.  Be ready to show the Board why moving within 60 days is simply not possible.  Have copies of medical records, school reports, travel documents, pictures, and whatever else you have the establishes the reasonableness of the delay of eviction that you are asking for.  If a child is in a school district with a special program and termination and moving would deny the child continued access to the program collect that evidence and be prepared to present it.  Don't assume that simply saying it will be enough.   Be prepared to tell the Board what your plan is, the timing, and the reasons.  If your reasons are compelling the adjudicator certainly has the power to grant you the time you need to leave.

[Note that this article was in relation to landlord's who served an N12 in good faith and there are no issues respecting a substantial breach of obligations under the RTA.  If there is reason to challenge the landlord's desire to occupy the premises then there are a whole other set of considerations and defences.]

Michael K. E. Thiele
www.ottawalawyers.com


 

Tuesday, 29 September 2015

RENT RECEIPTS: WHAT IS REQUIRED FROM A LANDLORD

In Ontario, tenants are entitled to receive a receipt for rent that they pay.  This is true even if their rent is paid by cheque, electronic transfer, or other instrument that would appear to be its own receipt.    The landlord's obligation to provide a receipt is set out in section 109 of the Ontario Residential Tenancies Act.  That section provides:


109. RECEIPT FOR PAYMENT ---(1)  A landlord shall provide free of charge to a tenant or former tenant, on request, a receipt for the payment of any rent, rent deposit, arrears of rent or any other amount paid to the landlord.

(2)  FORMER TENANT--Subsection (1) applies to a request by a former tenant only if the request is made within 12 months after the tenancy terminated.


The obvious use of a rent receipt is that it allows a tenant to prove that the rent has been paid.  However, that is not the only reason that a tenant may request a rent receipt.  There are certain tax credits available to some tenants that may only be claimed with a proper rent receipt.  Further, a tenant may need the receipt to prove payment of rent to other agencies or in other court proceedings.   It is for this reason that the law very clearly requires a landlord to provide a receipt when requested to provide one.



While the obligation to provide a receipt is clear it is not always clear what a receipt needs to contain.  Many landlords buy a generic receipt book at Staples and simply fill in the spaces provided in that book.  For the most part, receipts like this do not meet the legal requirements imposed by the Residential Tenancies Act.


Aside from the section 109 requirements, the Regulations to the Residential Tenancies Act spell out the details of what a valid rent receipt must contain.  Section 9 of Ontario regulation 516/06 states that a document constitutes a receipt for the purposes of section 109 of the Residential Tenancies Act if it includes, at a minimum, a) the address of the rental unit to which the receipt applies; b) the name of the tenants to whom the receipt applies; c) the amount and date for each payment received for any rent, rent deposit, arrears of rent, or any other amount paid to the landlord and shall specify what the payment was for; d) the name of the landlord of the rental unit; and e) the signature of the landlord or the landlord's authorized agent.

As you can see from this section of the regulation the standard receipt from a generic blank receipt book will not constitute a receipt.  By the wording of the regulation any document that a landlord provides to a tenant that does not include the mandatory information will not legally be considered to be a receipt.  Accordingly, a landlord who provides such a document is contravening the law when the tenant makes a request for a rent receipt.

I've pasted into this article a blank rent receipt that I have prepared which, if you compare it to the section 109 requirements and the section 9 requirements of the regulation, meets the mandatory requirements of the law. 


Michael K. E. Thiele
www.ottawalawyers.com









Monday, 28 September 2015

Dog Poop and the tenant who won't scoop.

I've given up thinking that there are some things in life that are so obvious that everyone inherently understands and knows the right and the wrong way to think about the thing.   As it turns out, dog poop is one of those things that not everyone agrees about.  There are some pet owners who for some reason or no reason at all think that they don't have to pick up after their pet.  These pet owners are quite content to let their dog do its business wherever and whenever the mood strikes and simply abandon the pile wherever it lies.  Fortunately, from the perspective of many, the law does not support these pet owners.

I think that people know that in most cities and towns that the municipal government has passed by-laws requiring pet owners to stoop and scoop.  What is interesting is that the stoop and scoop bylaws are a little broader and slightly more complicated than simply requiring a dog owner to pick up a dog's waste.  For example, let's take a look at the City of Ottawa by-law provisions respecting stooping and scooping.  Starting at section 37 of the Animal Care and Control By-Law No. 2003-77


STOOP AND SCOOP
37Every owner of a dog shall immediately remove any feces left by the dog in the City:
  (a)on a highway or roadway,
  (b)in a public park,
  (c)on any public property other than a public park, or
  (d)on any private property other than the property of,
   (i)the owner of the dog, or
   (ii)the person having care, custody or control of the dog.
38Every owner of a dog shall dispose of any feces removed pursuant to Section 37 on his or her premises.
39Every owner of a dog shall remove from his or her premises, in a timely manner, feces left by such dog, so as not to disturb the enjoyment, comfort, convenience of any person in the vicinity of the premises.

You can see that the by-law provides more direction than simply stoop and scoop.  A dog owner is required not only to stoop and scoop on a highway, roadway, public park, public property, but ALSO on the private property of any person other than the owner of the dog.    

Also interesting is that the by-law requires dog owners to dispose of dog waste that is stooped and scooped on their own premises.  This means not putting the waste in a regular garbage can but instead taking the poop home and disposing of it.  Furthermore, the owners of dogs even on their own property are required to remove dog fees so as to ensure that the enjoyment, comfort, convenience of any person in the vicinity of the premises is not disturbed.  On this point, the By-law has other sections dealing with keeping animals in sanitary conditions.

TENANT'S AND DOG WASTE

The question I get from time to time is what can be done about tenants who do not pick up after their dog.   A recent inquiry was about a tenant who thought picking up after his dog "every time" was overkill.  The fact is that the by-law leaves no room for not picking up dog waste (disabilities and service dogs excepted).   Tenants must pick up their dog's poop or risk being in violation of the By-Law.

Aside from a By-Law violation, a Landlord may also find authority in the Residential Tenancies Act to force a tenant to pick up their dog's poop.  A Landlord may serve a Form N5 Notice of Termination.  The details section on that form should include the details about the failure to stoop and scoop and it may make reference to the violation of the applicable local by-law.  Further, the N5 can, and should, make reference to the impact that the failure to stoop and scoop has on other tenants and the landlord.    The presence of feces around the yard and on the property presumably is unpleasant, smells, and makes it difficult to enjoy a yard or other common areas if the area is covered in Dog waste.  How this impacts on the landlord or tenants is important to explain as the Board will consider how serious the violation is and whether eviction is necessary.  Dog waste that smells to the extent of preventing windows from being opened, abandoned waste that is near walkways and is stepped in regularly, or the voluminous presence of dog waste making the use of a backyard, garden or sitting area impossible certainly qualifies as a substantial interference with the reasonable enjoyment of the property by the landlord or other tenants.  For this a tenant can be evicted.   The N5 is all about substantial interference so it is important to highlight how the offending conduct is a "substantial interference".

The Landlord and Tenant Board may give a tenant who hasn't scooped a second chance.  However, as a landlord it is reasonable to expect that the Board will also impose a condition on the tenant that he/she always clean up after their dog failing which the tenant can be evicted under section 78 of the Residential Tenancies Act.

Requiring a tenant to clean up after their dog, every single time, and in the winter, is not unreasonable.  In fact, failing to clean up after one's dog is illegal and it can get a tenant evicted.

Michael K. E. Thiele
www.ottawalawyers.com

Thursday, 13 August 2015

GURANTORS & CO-SIGNERS OF RESIDENTIAL LEASES

If you are looking for information respecting the nature of a guarantee or the obligation of a co-signer with respect to residential leases governed by Ontario's Residential Tenancies Act then I am pleased to offer these comments.


A guarantor in the residential leasing context is understood to be a person who agrees to pay the rent for a tenant should the tenant fail to pay the rent owing to the landlord.  Sometimes, it is also assumed that a guarantor is responsible for damage to the rental unit or complex and any other expenses arising out of the leasing arrangement.    In the rental housing context, the word guarantor is often used interchangeably with the concept of a co-signer.   Often enough, a residential lease contains a line at the end of the lease for the guarantor or co-signer to sign with the notation of "guarantor" or "co-signer" beside the line on which that person is expected to sign.


Some leases contain a line or paragraph about the co-signer or guarantor.  I have seen a great many versions of so called "standard" clauses and generally find that these clauses are vague and often enough don't spell out the expectations of the guarantor or what the guarantee actually guarantees.  As well, the lease clauses sometimes direct that the guarantor or co-signer who is being asked to sign the lease will also sign a separate document that is the guarantee and then, when you look for that document, you discover that no such document was ever signed or prepared.


The law of guarantee is quite complex and there are many aspects to the law that go well beyond the scope of a typical residential landlord and tenant law guarantee.   That being said, there are certain basic requirements for any guarantee to be enforceable against a guarantor.  The most important thing, I think, is the requirement for certainty of terms so that it is clear that there was indeed an agreement between the parties and that the nature of that agreement is clear.  Where this is missing there is a willingness, with exceptions, in the Courts to find that a guarantee is void for vagueness.


As indicated, the technical side of guarantees are many.  This article concerns itself with guarantees and the Residential Tenancies Act and what you need to know about the Landlord and Tenant Board's authority to deal with a guarantor, make findings respecting the guarantee, and make orders based on it.


It seems settled that a guarantor is not a tenant. The case of Kar v. Chung [2001] O.J. O.J. No 3817 (Ont. C.A.) speaks to this proposition and the same proposition is reflected in the Landlord and Tenant Board interpretation Guidelines on Eviction for Failure to Pay Rent.  Guideline 11 states in part that the Landlord and Tenant Board will not make an order against a Guarantor even where the granting of the tenancy to the tenant was conditional on the tenant having a guarantor.  As a result, a landlord may not expect to receive an order against a guarantor for unpaid rent even if the lease is drafted in such a way as to make it appear that the guarantor is a tenant.  While a lease may provide for a right of occupancy on the part of a guarantor and hence they are arguably tenants no one actually expects the guarantor to occupy the premises as a tenant.  Not being in occupation further limits the Board's jurisdiction to make an order even if the guarantor were considered to be a tenant.


The Kar decision referred to above provided an interesting explanation of the effect of a guarantee clause contained in a written lease.  The decision is very short so the endorsement is reproduced below in its entirety:


E N D O R S E M E N T

Released Orally: September 25, 2001
[1]               We disagree with the reasoning of both Mr. Justice Murphy and the Divisional Court. 
[2]               The lease was entered into on May 4, 1997 and it was to expire on May 4, 1998, subject to the tenant’s right to renew for another year on giving 60 days notice.  The tenant did not give notice.  The Landlord and Tenant Act R.S.O. 1990, C. L.7 was then in force.  Section 104(1) of that act provided as follows:
Subject to subsection (2), upon the expiration of a tenancy agreement for a fixed term, the landlord and the tenant shall be deemed to have renewed the tenancy agreement as a monthly tenancy agreement upon the same terms and conditions as are provided for in the expired tenancy agreement.
[3]               The legislation does not purport to affect or apply to guarantors.  The guarantor in this case is not deemed to have done anything.  There was no language in the guarantee itself dealing with renewals.  In those circumstances it seems to us that the guarantee expired at the end of the first year.
[4]               Part of the award of the Divisional Court was for damage to the premises.  There was no evidence whether it occurred during the first year or after the guarantor’s liability had ceased. 
[5]               In these circumstances the order of the Divisional Court is set aside and the judgment of the trial judge restored.  The tenant is entitled to her costs here and below.  Those costs are fixed, on consent, at $5000.


What should be learned from this endorsement (which remains as the law today under the Residential Tenancies Act even though the case was decided under the Landlord and Tenant Act), is that the nature of the guarantee and the extent of it must be clearly expressed.  The automatic renewal of a fixed term lease to a month to month lease does not renew a guarantee.


Another consideration in relation to guarantees is the circumstances under which a landlord may require a tenant to provide a guarantor.   In my view, the circumstances under which a guarantee is required may indeed lead to arguments that the guarantee was illegally required and hence is not enforceable.  A context in which this argument may arise is when a landlord automatically requires a guarantor for particular types of tenants. In a policy on Human Rights and Rental Housing, the Ontario Human Rights Commission discusses discrimination against young people by landlords.  Discrimination against young people can take many forms but one of those ways is to require all young people to provide a guarantor as a matter of policy.   People as young as 16 are entitled to rent and can not be refused because of their age.  If a landlord responds to a young person's rental application with an automatic requirement for a guarantor I think a clear case of discrimination is made out as it is quite likely that a 16 year old is looking for an apartment of their own (and one their own) because they do not have people in their lives who are prepared to act as guarantors. 


For people considering whether they are prepared to become a guarantor they should understand that a landlord may not act quickly in evicting for non-payment of rent or that a landlord may not take steps that seem reasonable to minimize the accumulation of rent arrears.  The landlord may also not tell the guarantor about problems in the tenancy and the guarantor may feel that the lack of involvement in the tenancy and problems in the tenancy should disentitle the landlord to claim against the guarantor.  For the most part, these concerns and arguments will carry little weight--unless of course there are negotiated terms respecting what the landlord will do vis a vis the guarantor.


SUMMARY


Guarantees have many technical aspects and the fundamental principles of contract law are important in determining respective rights and interests.  However, technical arguments tend not to be effective when landlords sue guarantors if the circumstances of the guarantee are such that it is fairly and reasonably understood from the documentation what the guarantor was agreeing to do. Signing a guarantee is a serious matter and the liability for that signature can very quickly represent thousands of dollars in unpaid rent and/or damages.


Michael K. E. Thiele
www.ottawalawyers.com


Monday, 22 June 2015

My Tenant hasn't paid rent--what do I do?

This article is for landlords who are renting apartments to residential tenants in Ontario. The goal of this article is to provide a guide to the steps to take to protect one's interest while at the same time recognizing the difficulties that tenants might face and the impact of those difficulties on running the business of being a landlord.


Generally speaking, first time landlords and landlords with few rental properties are the people who are most likely to lose the most when it comes to tenants not paying their rent.  In the case of first time landlords the losses from tenants not paying their rent mount steeply because of a natural inclination to give the tenants a chance and a desire to help the tenants.  That inclination leads to a significant delay in taking the mandatory legal steps that must be taken to get an Order for rent arrears and eviction for non-payment of rent.  The inclination to be kind, understanding, and patient with a tenant in arrears of rent may result in time creeping by and before you know it the tenant is several months in arrears of rent.  It is only then, that the kind, understanding and patient landlord begins to suspect that they have been taken advantage of, or worse, realizes that the tenant's personal circumstances are such that they will never be able to recover from the debt hole of rent arrears that they are in.  With the dawning of this reality, the new landlord then learns that the actual legal process required under the Residential Tenancies Act will take several more months before anything concrete can be done to stem the losses and regain vacant possession of the rental unit.


The other kind of landlord who is more likely to suffer rental losses is the landlord with very few rental units.  Why is this?  In my experience this tends to happen because this kind of landlord is easily distracted from the business of being a landlord.  With only a few rental units this kind of landlord is often employed elsewhere or runs another business elsewhere which work provides the actual income on which the landlord lives.  The cash-flow of only a few rental units is nice for building equity in the properties but the fact is that after expenses the net profit from the rental income on a few rental units (say 10 or less) is not anywhere near enough to live on.


The landlord with only a few rental units often relies on the integrity of the tenants to pay the rent.  When a tenant is in arrears, these landlords often don't notice right away that a cheque has bounced or that they didn't receive a cheque that month.  These landlords are often distracted from the problem of non-payment by tenants who say the cheque was mailed, dropped in the drop-box or by some other plausible excuse that buys the tenant more time.  These landlords tend not to get around to the paperwork because of the distractions of their other jobs and as a result their losses from non-payment of rent tend to be higher than for landlords who are focused on their business of being landlords.


The solution for both types of landlords (kind, new, & patient and the small landlord), is the same.  You have to use the tools that the law provides and you must use them immediately upon being entitled to use these tools.  Using the tools that the law provides does not in fact prevent a landlord from being kind, patient or understanding.  It is still possible to give a tenant a chance to pay even if the full force of the law is used.  It needs to be understood that using the law as it is intended to be used does not make a landlord a bad person.


I recommend to all of my landlord clients that there should not, as a matter of practice be any grace period for non-payment of rent.  If rent is due on the first of the month then it is important to require consistent payment of rent on the first.    Requiring delivery of rent on or before the first of the month allows for greater efficiency and tracking of how the "landlord business" is going.  By getting all of the rent on or before the first a landlord can sit down on the second of every month and do the deposit, update the rent ledgers, and get a good picture of where the business is at.  If a landlord allows rent to be paid in dribs and drabs over the first couple of days of every month by numerous tenants then along with the reduced cash-flow the landlord has increased administrative burdens in receiving, recording, and crediting rent payments that are made late.


The administrative efficiencies that come with rent that is paid in a timely manner are so great that a few of my larger landlord clients provide tenants with an on-time rent discount if rent is paid in full and on time on or before the first of every month for a period of one year.


THE STEPS THAT SHOULD BE TAKEN


A tenant has the right to pay rent all the way up to midnight of the day that rent is due.  This is regardless of office hours or other preferences of the landlord. 


On the second day of the month or the day after that rent is due if the rent term runs on anything other than the calendar month; landlords should immediately determine who has paid rent and who hasn't.  For the tenants who have not paid rent the landlord should immediately issue an N4 Form (Notice of Termination for Non-Payment of Rent).  That form is available here  . 


The N4 Form is the form that a landlord completes to advise a tenant that their rent is late and that the landlord is seeking to terminate the lease for non-payment of rent.  The form requires the tenant to pay the rent by a specified date that is called the termination date.  That termination date must always be a minimum of 14 days after the N4 Form is properly served on the tenant.  This means the service of the Form N4 will give the tenant 2 weeks to pay the rent.  If they do pay the rent within that time then the N4 form is void and the tenancy continues without any interruption.


If the tenant does not pay the rent within the 14 days provided in the N4 form then, and only then, may a landlord proceed to the next step which is filing an application to the landlord and tenant board to terminate and evict the tenant and get an Order for the rent arrears and ongoing rent that may accrue with the passage of time.


It should be apparent to the new landlord from looking at the requirements of the N4 that the law already builds in a grace period for delinquent tenants.  Providing the tenant with a grace period before serving the N4 (Notice of Termination for Non-Payment of Rent), extends a two week grace/notice period to an even longer period of time.  If a landlord chooses to give the tenant a few more days, a week or two, or whatever other time period, this does not shorten the legally required notice in the N4 of 14 days.  Regardless of the kindness extended to the tenant, the RTA requires that the minimum notice periods be provided to the tenant in the proper Forms.  In my view, an N4 that is served immediately upon the rent being late starts a clock ticking that protects a landlord's interests.   While nothing technically stops a landlord from granting the tenant more time, or delaying eviction, that "kindness" in my view should not come at the expense of having the legal right to terminate and evict the tenant should the kindness extended to the tenant be abused or the rent not ultimately be forthcoming.


During the two week period after the service of the Form N4 there is nothing that the landlord can do (no legal action to regain possession of the rental unit is possible during this time).  It is fine to speak with the tenant and make whatever arrangements you wish with respect to getting payment of the rent.  However, I strongly urge landlords to not make deals that include waiving or delaying the legal rights you have to get an Order terminating the tenancy for non-payment of rent.  While the tenant's promises to pay may be very sincere and the plans to raise the money entirely plausible, the risk that the rent arrears are not paid should not be compounded with an extended period of non-payment of rent for subsequent months.  What I mean by this is that you can make a payment plan with a tenant and agree on terms that are satisfactory to you.  However, any deal that you reach should include the fact that you will apply to the Landlord and Tenant Board for an order terminating the tenancy and evicting the tenant.  If the tenant has paid the rent arrears (and $170 filing fee) by the time of the hearing then no harm has come.  If the payment plan extends past the time of the hearing then you can make the payment plan a condition of the Eviction Order--meaning the eviction will not be enforced unless the tenant fails to meet the terms of the payment plan agreed to.   The effect is that you are still being flexible, patient, and understanding with a tenant who may be facing a tough time for a myriad of reasons, but you are protecting yourself with an eviction Order in case the non-payment of the rent arrears and future rents gets out of hand.


After you have served the N4 and have waited the required 14 days, you may apply to the Ontario Landlord and Tenant Board for a Hearing.  You use the Form L1 to apply to the Board.  You will need a copy of the N4 that you served on the tenant along with a Certificate of Service proving that you delivered a copy of the N4 to the tenant.  The L1 application when filed with the Landlord and Tenant Board will result in a Notice of Hearing being issued.  That hearing will in most cases be scheduled within a few weeks of filing the application.  You will receive instructions with the issued application for serving the tenant and filing a Certificate of Service with the Board.


You should take note again of how the tenant is afforded opportunities to pay the rent arrears.  The N4 provided 14 days notice and now the filing of the L1 results in a few weeks of delay again before a hearing is scheduled.  While waiting for the hearing date nothing can be legally done to regain possession of the rental unit without the tenant's consent.  During this entire time the tenant has the right to pay off the full rent and maintain the tenancy or alternatively the tenant can use this time to find a new apartment and get ready to move.  Granting the tenant indulgences and not enforcing your legal rights as a landlord when those rights accrue gives the tenant a whole lot more time to not pay future months of rent (as it becomes due), to the detriment of the landlord who thought that it was harmless to grant a few more days, weeks, month, etc..


When the Hearing date finally arrives a Landlord needs to be prepared to attend the hearing to prove the case against the tenant.  It is imperative that a landlord attend the hearing with an up to date rent ledger that clearly shows the rent being charged, the rents received, and the amounts owing.  On the day of the Hearing the Landlord and Tenant Board will request the Landlord to provide an update as to the status of the rent arrears on an L1/L9 update sheet.  This form, available at the Landlord and Tenant Board, is designed to show the adjudicator exactly how much the tenant owes, what the legal rents are, whether any rent has been paid (full or partial payments) since the filing of the application, whether rent has increased, and whether there are any NSF charges.  The Form also queries whether there are any extenuating circumstances that the Landlord and Tenant Board should be aware of.


The extenuating circumstances are essentially things that may be considered legitimate excuses or explanations for the rent arrears.  Sometimes, the rent arrears arise from things beyond the tenant's control.  Where there is a job loss, injury, illness, delay of payments, family emergency, theft, and any other unfortunate occurrence that the Board accepts, an adjudicator may grant the tenant more time to pay the rent arrears while still maintaining the tenancy.  The authority to grant the tenant a further opportunity is found in section 83 of the RTA. This discretion section can be quite maddening to landlords who have delayed pursuing their tenants because they felt badly and wanted to give the tenants a chance.  The rent arrears by the time the tardy landlord gets to the Landlord and Tenant Board can be many many months.  Then, in defence of the application, the tenant can ask the Board to grant a payment plan or in some circumstances delay eviction because of the tenant's circumstances.  Landlords who are relying the rent to meet mortgage obligations or other financial commitments can become quite upset at this "discretion" being exercise under section 83 in favour of tenants who they feel have abused the kindnesses already extended to them.


My point in this article is not to complain about the RTA or to suggest that the statute is in any way unfair.  In fact, I find that the RTA is fairly balanced given the competing interests of landlords and tenants.  The trick to maintaining the "balance" in non payment of rent cases is for landlords to make use of the rights that are granted to them under the RTA as soon as possible.  By delaying the exercise of these rights it does ultimately appear that the RTA is unfair to landlords especially when the rent arrears have extended over a great many months.  The landlords that I have heard complaining the loudest are generally the ones who do not know their rights under the RTA (and have never read the RTA) and they are generally the ones who just assumed because they own the property that the tenants have to do what they say and that the Landlord and Tenant Board will back them up.  It is these landlords that complain the loudest when they realize that their delay in issuing the proper paperwork, added to the minimum statutory notice periods and the delay that comes with the hearing process, will result not only in present rent arrears not being paid but that future rent arrears will accrue and there will be nothing that can be done to regain vacant possession of the rental unit quickly.


In an application to the Landlord and Tenant Board, where there are no extenuating circumstances or any reason to extend time to pay, a tenant can still use procedural methods to delay the ultimate hearing of their case--which will delay the termination and eviction.  After any procedural delays, and assuming that the tenant has not filed a counter application (usually for maintenance problems and rent abatements), the case will eventually be heard on its merits.


In a typical case, where there is no exercise of discretion under section 83, the Landlord and Tenant Board will issue an Order terminating the tenancy and evicting the tenant 11 days after the date that the Order is written.  During this 11 day period the tenant is permitted to pay off the rent arrears to void the eviction Order and remain in the rental unit.  It is only on the 12th day (as set out in the Order) that the landlord is permitted to file the Order with the Court Enforcement Office to get the Sheriff to attend at the rental unit to evict the tenant.  Note that after filing the Order with the Court Enforcement Office that the Sheriff will attend at the tenant's rental unit to post a Notice to Vacate on the door.  That Notice to Vacate will give the tenant warning that the Sheriff will be coming on a specified date to enforce the eviction--that date rarely less than 7 days after the service of the Notice to Vacate.  In very busy jurisdictions the enforcement date can be much longer than 7 days.


Once during a tenancy, a tenant is permitted even after the expiry of the 11 day period in the Order to pay the rent in full and bring a motion to void the eviction Order.  So long as the tenant is still in possession the motion may be brought.  If the landlord has already paid the Sheriff fees the tenant does not have to pay the fees, only the rent, to bring the motion to void the eviction Order.  Dealing with payment of the Sheriff fees is a matter for the motion to the Board where the landlord can argue that the Sheriff's fees also need to be paid to void the eviction Order.


SUMMARY


The point of this article is to suggest a balanced approach to dealing with tenants who are having rent payment problems.  The reasons for late rent or non payment of rent are beyond enumeration as there are simply too many of them.  Some of the reasons are legitimate, some are foolish, some arise from hardship and others from human frailty.  My suggestion to landlords is that being a good businessperson landlord does not require you to turn a blind eye to these problems.  Heartlessness is not a prerequisite to being landlord.  However, it needs to be recognized that the processes under the RTA already build in an awful lot of chances, delays, and opportunities to ask for the exercise of discretion.  It is prudent for all landlords to exercise all of their RTA rights and get the eviction order as quickly as possible for non-payment of rent.  As "quickly as possible" will be a minimum of 5 weeks and likely longer.  If at the end of that process a landlord is convinced that the rent arrears are forthcoming then you can wait to file the eviction order with the Sheriff for a few days. 


In all my years of doing this I have never had a Landlord client who was sorry that they had an eviction Order in hand and that they enforced their rights as soon as they became available.  On the other hand, I have had numerous landlord clients who were very sorry that they let their rent collection processes get out of hand and unstructured.  Getting tenants to pay the rent on time, doing the deposits, rent ledger paperwork and enforcement paperwork on a regular schedule makes the business of being a landlord much less stressful and in fact profitable.


Michael K. E. Thiele
www.ottawalawyers.com    

Wednesday, 18 March 2015

Preparing for a Hearing at the Ontario Landlord and Tenant Board


Preparing for a Hearing at the Landlord and Tenant Board