What Can Be Done When a Tenant Regularly Pays the Rent Late?
When a Tenant Is Persistently Late With the Rent a Landlord Can Pursue an Order to Evict From the Landlord Tenant Board. The Required Steps Include, Among Other Things, Issuance of Formal Notice of Eviction Served Upon the Tenant and Application Documentation Filed With the Landlord Tenant Board.
Understanding When a Tenant May Be Evicted For Persistently Late Rent Payments
A tenant that is frequently late paying the rent might cause financial difficulties for a landlord, especially a smaller landlord who is without deep pockets. When a tenant is frequently late with the rent, or "persistently" late being the actual term used in law, as a consequence the landlord may endure difficulty paying the mortgage, taxes, utilities, among other things, on time. This might result in financial harm, including monetary penalties, or other hardship. This hardship could be severe such as derogatory credit reports, increased interest rates the next time the landlord renews a mortgage, or even difficulty buying additional properties.
It is notable that the first time a landlord seeks to evict for persistently late rent, the Landlord Tenant Board usually provides a last chance warning to the tenant. This is not to say that an Order to Evict is impossible the first time around, just unlikely; however, by proceeding the first time around, even if unsuccessful in obtaining an Order to Evict on the first attempt, the landlord does establish a record of payment delinquency with the Landlord Tenant Board. Instead, the Landlord Tenant Board is more likely to issue a pay on time Order; meaning that in the future, if the tenant is a day late or a dollar short, the landlord may then apply for an Order to Evict without serving any further notices.
It is common that the Landlord Tenant Board will provide a last chance to a tenant that is persistently late paying rent. Essentially, an Order issued requiring the tenant to bring the rent current, if any balance is overdue, and to make all payments going forward on time. This leniency is granted per discretion of the Landlord Tenant Board as is provided within section 83 of the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17, which, among other things, says:
83 (1) Upon an application for an order evicting a tenant, the Board may, despite any other provision of this Act or the tenancy agreement,
(a) refuse to grant the application unless satisfied, having regard to all the circumstances, that it would be unfair to refuse; or
(b) order that the enforcement of the eviction order be postponed for a period of time.
For a case where the Landlord Tenant Board provided opportunities for the tenant to resolve a rent arrears and persistently late payment problem, and then eventually ordered termination of the tenancy and eviction, the case of RPM v. RG and VA, TNL-83786-16 (Re), 2016 CanLII 72041 provides a good example, especially as an example of the importance of creating a track record with the Landlord Tenant Board. Within the RPM case, the Landlord Tenant Board said:
1. This application was heard together with TNL-83939-16 respecting the same tenancy.
2. The procedural history of these matters dates back to 2015. The Landlord applied to terminate the tenancy because the Tenants had been persistently late in paying their rent. On February 6, 2015, the Board issued order TNL-65178-14 requiring that the Tenants pay their rent on time until January, 2016.
3. The Tenants did not comply with the order. In fact, they fell into arrears. The Landlord filed an application to terminate the tenancy because of the arrears, which resulted in order TNL-74983-15 issued on December 9, 2015. That order required that the Tenants pay their arrears of $4,915.90 and new rent that came due according to a payment plan scheduled to end on February 29, 2016.
4. The Tenants did not comply with that order either. The Board issued ex parte orders terminating the tenancy for the breaches of orders TNL-65178-14 and TNL-74983-15. The Tenants moved to set aside both orders, and the motions were heard together in January, 2016. At that time, the Tenants’ arrears had increased to $7,209.90. The Board issued an interim order requiring that the Tenants repay those arrears on a payment plan ending on May 6, 2016. The Tenants complied with the interim order and paid all their arrears. On July 14, 2016 the Board issued order TNL-76406-15-SA/TNL-77842-16-SA requiring that the Tenants pay their rent on time for the next 12 months.
5. By the time order TNL-76406-15-SA/TNL-77842-16-SA was issued, the Tenants had already fallen into arrears again. They have not paid any rent for July, August, or September 2016.
6. The Landlord filed application TNL-83939-16 to terminate the tenancy for the breach of order TNL-76406-15-SA/TNL-77842-16-SA, and also filed the present application to terminate the tenancy for the new arrears of rent. Application TNL-83939-16 was resolved by an ex parte order, which the Tenants moved to set aside.
7. The Tenant’s motion was heard together with the present application. There was no dispute regarding either the arrears owing or the breach of the prior order. The only issue in either case was whether it would not be unfair to grant relief from eviction, pursuant to subsection 83(2) of the Residential Tenancies Act, 2006 (the ‘Act’) in the present application, and pursuant to subsection 78(11)(b) in the set-aside motion. As the tests for relief under the two sections are identical, I have considered the issue of relief as a single question, the reasons for which are contained in this order.
Relief from Eviction
8. The Tenant testified that she fell back into arrears because she lost her job, and the other tenant had to stop work due to a disability. She has now started a new job, and the other tenant expected to start receiving disability benefits. Based on their new expected income, the Tenant testified that they can pay roughly $125 per month towards the arrears. They can pay more in February and March because those are three-paycheque months. I calculate that the Tenant’s proposal would lead to the arrears being paid off in roughly four and a half years.
9. I have considered all the circumstances, and I find that it would be unfair to the Landlord to permit a payment plan of that length. The tenancy is not sustainable given the Tenants’ income.
10. I find that it would not be unfair to delay eviction to September 30, 2016. It was the Tenant’s uncontested evidence that the other Tenant suffers from a disability which will make it impossible for him to help pack or look for a new apartment. The Tenant will have to do all the work of moving two people herself, while also caring for the other tenant because of his disabilities. It is fair to give her to the end of the month to do so. It would be unfair to delay eviction any further since that would lead to additional arrears owing for October.
11. There is no prospect of the Tenants paying their full arrears by September 30. However, if they do so, this order will be void. I find that it would, in that case, still be unfair to set aside order TNL-76406-15-SA/TNL-77842-16-SA to permit the tenancy to continue. The Tenants have been persistently late in paying their rent for years, despite being granted relief from eviction numerous times. It would be unfair to the Landlord to permit the tenancy to continue where the Tenants’ income is simply not high enough for them to pay their rent on time.
12. Therefore, even if the Tenants void this order, the tenancy will still terminate pursuant to order TNL-76406-15-SA/TNL-77842-16-SA, they stay of which will be lifted on October 1, 2016.
In other circumstances, the case of Inc v. NT and MAG, TEL-03678-19 (Re), 2020 CanLII 61259 was a first time proceeding for persistently late rent; however, in this situation, the landlord was already on record with the Landlord Tenant Board with three previous rent arrears proceedings which were negated by late payments prior to eviction. Upon reviewing the first time proceeding for persistently late rent and the request from the tenants that the Landlord Tenant Board exercise the discretion under section 83, the decision of the Landlord Tenant Board was to deny the section 83 request and grant the eviction order. The reasoning for denying the section 83 request was explained by the Landlord Tenant Board as due to the tenants failure to provide corroborating evidence to support a reasonable argument of the ability to pay rent on time going forward. Specifically, the Landlord Tenant Board said:
1. There is no dispute here that the Tenants have persistently failed to pay the rent on the date it was due.
2. According to the Landlord’s ledger for the period August, 2018 to April, 2019 the Tenants were late paying the rent each month but by the end of the month they were either caught up or mostly caught up. But then in May of 2019 the Tenants started to fall behind. They did not catch up and reach a zero balance until close to the end of August, 2019 at which point they paid $3,644.09. That lump sum payment brought them to a zero balance and discontinued the Landlord’s most recent L1 application (contained in Board file TEL-03671-19).
3. The dispute between the parties here is the Tenants’ request for relief from eviction pursuant to s. 83 of the Residential Tenancies Act, 2006 (the ‘Act’). They ask for an opportunity to save the tenancy subject to the requirement rent be paid on time into the future. The Landlord opposes that request and asks for a standard eviction order.
4. That means the issue for the Board is whether or not it would be unfair in all of the circumstances to grant the Tenants the relief sought.
5. This tenancy began in 2014. There are an unknown number of adults and children living in the rental unit. The children attend school nearby.
6. There have been three L1 applications for non-payment of rent, all of which have resulted in the Tenants paying everything outstanding before an eviction order could issue. TEL-75865-16 was discontinued effective February 13, 2017. TEL-78535-17 was discontinued April 19, 2017. The most recent one was discontinued August 22, 2019.
7. This is the first application alleging persistent late payment of rent. The notice of termination was served on the Tenants August 9, 2019. As stated above, the Tenants cleared the arrears on or about August 22, 2019. As of the date of hearing nothing had been paid for the month of September, so the rent for September 2019, was also not paid on time.
8. In response to my questions, the Tenants say that they did not realise that persistent late payment of rent could get them evicted. They have monthly income of around $5,000.00 a month which should be more than sufficient to pay rent on time and in full but the Tenants have other debts and there is an affordability issue. As of the date of hearing the monthly rent was $1,658.61. Things worsened in the spring of 2019 because the second-named Tenant above became ill and had to have surgery. They have not paid September’s rent on time because they used all of their resources to pay off the arrears in August, 2019. They want to catch up with September’s rent and pay rent on time starting October 1, 2019. None of the Tenants’ evidence was corroborated by documentation.
9. The problem with the Tenants’ request for relief from eviction is that the only measure by which the Board can analyse their promises to pay in the future is their behaviour in the past.
10. The Tenants do not deny having a multi-year history of paying rent late; they do not deny knowing when rent is due; they do not deny prioritizing other debts over paying rent. They claim they did not know being persistently late could result in eviction but they did in fact know that sometime in the first half of August of 2019 because the Landlord served notice of termination on them for persistent late payment. Despite considerable income they did not pay rent on time for September, 2019 and continued to be in arrears as of the date of hearing. It is something of a mystery as to where their income is going.
11. In other words, the evidence supports the conclusion it is more likely than not that the Tenants will continue to pay rent late into the future. They have an affordability issue. As a result, granting relief in the form requested would be unfair to the Landlord as the Landlord will inevitably have to bring additional legal proceedings to the Board with respect to this tenancy.
12. In the alternative, the Tenants ask that eviction be delayed until December 31, 2019. Given the delays in writing and issuing this order, the Tenants have essentially gained the delay they requested. No further delay is justifiable.
13. As a result of all of the above, the Board’s standard order shall issue.
If a tenant persistently fails to pay the rent on time, Paladin LLP may be available to help the landlord apply to the Landlord Tenant Board to evict the tenant at the end of the term of the tenancy. It is notable that what is viewed as persistently late rent is undefined; and accordingly, whether a tenant is persistently late with the rent depends on a variety of factors such as how many times the rent was late, how late was the rent eventually paid. Without a precise definition of persistently late rent, professional advocacy from Paladin LLP maximizes your chances for a successful outcome.Learn More About
Rent Persistently Late