Area of Law: Landlord and Tenant
Answer # 446
How can landlords collect arrears of rent?Region: Ontario Answer # 446
Negotiate a payment plan
Under the law, a tenant who does not pay rent is considered to be in arrears. Sometimes, landlords can avoid the time and expense of legal action by having the tenant sign a written agreement stating that the tenant will pay the arrears according to a set payment schedule. Tenants who are asked to sign an agreement to pay arrears of rent, should make sure that the terms of the agreement are reasonable, so that they will not default on the agreement and give the landlord the right to evict them.
If the tenant defaults on any of the payments as set out in the agreement, however, the landlord will usually have to take further steps.
Give notice to the tenant
The next thing a landlord can do to correct the problem is give the tenant a Notice to End a Tenancy Early for Non-payment of Rent. This Notice gives a tenant who pays rent monthly, 14 days to pay the rent due or move out. This Notice will state:
- how much rent the landlord believes the tenant owes,
- the date that the landlord wants the tenant to pay the overdue rent by (the termination date), and
- that if the tenant does not pay the rent or move by the termination date, the landlord can apply to the Landlord and Tenant Board for an Eviction Order.
If a tenant pays all the rent they owe prior to when the landlord files an application to the LTB, the Notice to End a Tenancy Early for Non-payment of Rent is void and the tenant does not have to move out.
In order to void the notice, the tenant must pay both:
- The amount of arrears (overdue rent) in the N4 notice and
- Any additional rent payments that were due after they received the notice.
File an application with the Board
If the tenant does not pay the rent owing during the time allowed, and does not move, the landlord can file an application with the Board. They have two options:
1. Apply to the Board for an Order to evict the tenant and to collect the rent that is owed; or
2. Apply to the Board only for an Order to collect the rent, but not to evict the tenant.
Once a landlord files an application with the Board, a hearing may be scheduled. If the tenant wants to dispute the landlord’s claims, they should appear at the hearing and be prepared to give evidence.
If a landlord obtains either an Eviction Order, or an Order from the Board confirming the amount of arrears the tenant owes, they can generally enforce the Order through the Court Enforcement Office (Sheriff’s office). The landlord will be entitled to garnish the tenant’s wages, or seize and sell the tenant’s property to pay off the debt, and in the case of an Eviction Order, force the tenant to move out. At any time before the Order is executed by the Sheriff, the tenant can pay the amount in the Order and make a motion to the Board to prevent being evicted or having their wages garnished or property seized.
Collecting rent or other monies owed after a tenant moves out
A landlord can file an L10 application to the Board claiming rent arrears or compensation up-to one year after the date the tenant moved out (if the tenant moved out of the rental unit on or after September 1, 2021) and the landlord believes the former tenant owes:
- rent or compensation
- an amount for charges related to NSF cheques
- costs for unpaid utility bills (utilities mean heat, electricity and water)
- costs for damaging the rental unit
- costs the landlord incurred because the former tenant or someone else visiting or living in the rental unit substantially interfered with the landlord’s reasonable enjoyment or lawful right, privilege or interest
For more information about collecting arrears in rent, enforcing an Order, or obtaining forms online, contact the Landlord and Tenant Board.
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