Settlement Agreements at the Landlord Tenant Board Ontario (LTB)

At the start of an LTB hearing session, the board member will highly recommend that the opposing parties volunteer to meet with a trained, impartial mediator, to help them reach a settlement agreement. Even though the word “settle” implies accepting something that is not the best, in a landlord and tenant dispute, a settlement may be the best option for resolving the dispute. Sometimes, it is the only option!

To avoid an eviction order being granted in a hearing, a tenant may be willing to attempt a settlement through mediation. The landlord and tenant can create a conditional agreement where the tenant agrees to meet a condition, or else be evicted.

For example, if the Notice of Termination alleges that the tenant, contrary to the lease agreement, smokes in the apartment, the tenant can consent to an agreement containing the condition that, for the next year, they will not, nor allow anyone else to, smoke in the apartment, or else be evicted.

A settlement agreement can be made legally enforceable by the Consent Order of a board member, if it contains a condition that relates to the Notice of Termination served on the tenant.

In mediation, the landlord and tenant can agree to discuss:

  • any issue in the tenancy, and not just those in the current application,
  • terms that are contrary to the Residential Tenancies Act, that, the RTA does not permit the board member to impose
  • remedies, that, although legal, the RTA does not permit the board member to enforce 

The only restrictions that the parties must follow are:

  • A rent increase more than 3% per annum above the permitted annual guideline increase is not permitted.
  • EVERYTHING discussed in the mediation is CONFIDENTIAL!

In a hearing, when making a decision, the board member can consider:

  •  only the issues contained in the application and/or Notice of Termination. (Exception: in a non-payment of rent application, the tenant’s issues can be added. Explained in more detail later)
  • only the terms that comply with the RTA 
  • only the remedies that the law allows the LTB to impose and enforce.

Since a landlord and tenant can create terms and remedies in their agreement that are broader than those the board member has the power to impose or enforce, this gives them a better chance of creating a win-win scenario for both parties. 

If the parties cannot come to an agreement in mediation, their hearing will not be cancelled. In the hearing, you are not permitted to share anything discussed in the mediation with the board member.

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Reasons Why You Should Seriously Consider Doing a Settlement 

Attempting a settlement can save you from the risks that going into a hearing exposes you to AND it can give you advantages that a hearing cannot.

Risk of the Hearing Not Being Called or Completed on the Scheduled Date 

The order in which the cases are called is at the discretion of the board member. Generally, it is withdrawals, settlements, adjournments, and then hearings where only one party is present, and then hearings where both parties are present.

Since some applications take hours to resolve, there is a risk that your case might not get called or not be completed on that hearing date.

Currently, it will take months to get another hearing date for your case. The time and expense of this risk might not be worth it.

Risk of Dismissal Due to a Critical Error

In the hearing, the board member will review the Notice of Termination. If it contains a critical error, it is mandatory for the board member to declare the Notice of Termination invalid and dismiss the application.  A simple mistake could become very costly!

Critical errors found on notices include:

  • an improper representative (e.g. real estate agent, a property manager that deals with multiple properties.)
  • not all tenants are listed
  • not all landlords are listed
  • inadequate identification of the rental apartment (e.g. unit number, basement apartment missing)
  • the wrong rental period 
  • the wrong termination date
  • insufficient details describing the problem that triggered the application, and specific date and time it occurred
  • incorrect amount of rent owing
  • improper method used to serve the Notice of Termination
  • failure to pay any  mandatory compensation by the specified date 
  • and more

You should consider consulting an experienced paralegal to prepare your Notice of Termination and application.

If you have already submitted a Notice of Termination that contains a critical error to the LTB, other than withdrawing your application and starting over again, a settlement is the only option. Hiring a paralegal to represent you in a settlement negotiation may save your application from a mandatory dismissal in a hearing. Board members usually ignore a flawed Notice of Termination when they are told the parties have reached an agreement.

Risk of Dismissal on Every Eviction Application Due to the Landlord Violating the Tenant’s Rights

It is mandatory that the board member deny granting the eviction if the tenant can prove that:

the landlord is in serious breach

  • of the landlord’s responsibilities under the RTA, (e.g. seriously failed to repair or maintain the property)
  • of a term of the lease or tenancy agreement,

OR

the landlord filed for an eviction order because the tenant:

  • complained to a governmental authority about the landlord’s violation of a law dealing with health, safety, housing or maintenance standards
  • has or is attempted to secure or enforce their legal rights
  • has children occupying the rental unit. (Occupation by children is not overcrowding.) 
  • is organizing or is a member of a tenants association

If a landlord believes that the tenant might raise any of these issues, they should attempt to reach a settlement rather than risk a mandatory dismissal of their application in a hearing.

Risk of Dismissal Due to Insufficient Evidence

If you lack enough documentary evidence, such as emails, letters, photos, receipts and bank statements or all of the witnesses necessary to testify before the board to prove your case, it will get dismissed in the hearing.

Risk of Eviction Not Being Granted

The conduct of a tenant / their occupiers / guests:

  • damage to the property
  • interference with the reasonable enjoyment of others on the premises 
  • safety, cleanliness 
  • harassment 
  • overcrowding 
  • persistent late payment of rent 
  • non-payment of rent etc.

may lead to an eviction application being brought against the tenant. 

For a landlord who wants to maintain the tenant, it makes sense to attempt to reach a settlement agreement. Often, when the landlord and tenant develop an agreement together, they work out an agreement that would be more to their liking than the one the board member may impose on them.

In a hearing, the board member must be as fair as possible to both parties in making a decision. Rather than grant an immediate eviction, the board member may instead issue a conditional eviction order to give the tenant a chance to avoid getting evicted.

The tenant will be ordered to stop the specific,  undesired conduct, mentioned in the Notice of Termination, for one year, or else be evicted. If there was willful or negligent damage to the apartment, the board member may also order financial amends be made for that conduct. 

For a persistent late and/or incomplete payment eviction application, the tenant must immediately become up-to-date with the rent, and continue to pay the total rent on-time each month, or else be evicted.

For a non-payment of rent eviction application, the board member may issue a pay-and-stay conditional eviction order. If the tenant pays the rent owed according to a payment plan that the board member imposes, they can stay on as a tenant. The tenant must continue to pay the total rent on-time each month, but they will be given 11 days, or more, to pay the past rent owed, and or else be evicted. 

If the tenant succeeds in complying with all of the conditional eviction order, for one year, they cannot be evicted under the current application. (Another incident of poor conduct, after the one year period would require another application process.)

Risk of Tenant Bringing An Application in a Non-payment Eviction

Under Section 82 of the RTA, in a hearing, a tenant is allowed to raise issues against the landlord. They are not required to submit an application or pay a fee to the LTB to raise their issues, or give the landlord any advance notice of their intention to raise issues. 

Their allegations may include, but are not limited to:  the collection of an illegal deposit or fee, an illegal rent increase, illegal entry, harassment, interfering with the tenant’s reasonable enjoyment of the unit, and maintenance or repair issues.

Many of these allegations can lead to the landlord being ordered to pay money to the tenant, which can be used to offset the rent owing, and may also require the application to be dismissed entirely.

Advantage of Ability to Offer Incentives to Vacate

When a tenant owes money for unpaid rent or undue property damage, a settlement negotiation may persuade the tenant to willingly vacate the apartment.  Rather than risk an eviction not being granted in a hearing, a landlord may offer to waive all, or part, of, the money owed to persuade the tenant to vacate. The risk involved in keeping a troublesome tenant often is too great to not consider this advantageous option.

Advantage of Ability to Add Other Issues to the Application

If at the time that the application was filed, issues were missed or if new issues developed after it was filed, the opposing parties can agree in a settlement negotiation to settle all of the issues that both the landlord and the tenant have with the tenancy.

This opportunity, for either party to have all of their issues dealt with,  would not be possible in the limited forum of a hearing, since the only issues the board member can consider there are those raised in the current application. A settlement would erase the cost and frustration of fighting future applications.

Advantage of Decreased Chance of a Successful Outcome getting Reversed

A settlement has a much lower chance of being challenged than a hearing decision in your favour does. Even if you receive an order in your favour, the opposing side may attempt to get the outcome reversed by filing a Request for Review with the LTB and/or file an appeal with the Divisional Court. The order you received will be not permitted to be carried out until the case is reviewed or resolved.

If the case is taken to Divisional Court, you will wait months, even a year to get a hearing date. Also, you will need a lawyer to represent you in this lengthy legal process.

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If a landlord does not attempt a settlement negotiation, they will face risks in a hearing that could lead to a dismissal of their application, possible penalties being brought against them, a less appealing payment plan imposed upon them by the board member, and the costly possibility of a challenge to their favorable outcome.

Rather than wasting time waiting for a hearing to get the same result: the end of offensive behaviour, on-time rent payments, repayment of rent owed, financial amends for damages, it is worth trying to come to a settlement agreement.

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Settlement Agreements and Consent Orders

If the landlord and tenant come to a consent agreement:

  • the mediator will write out a Mediated Settlement Agreement, and have the parties sign it and give each a copy of the agreement. (The LTB will not keep a copy.)

OR

  • The mediator will take the agreement and the parties to the hearing room. The board member, if needed, will interrupt a lengthy hearing in session to write out a Consent Order.

Things to note about a Consent Order:

  • The board member is allowed to include in the Consent Order only the terms and conditions in the agreement which are permitted by the Residential Tenancies Act.
  • Only the terms or conditions that relate to the Notice of Termination served will be enforceable.
  •  Any terms or conditions that are not part of the current Notice of Termination will not be enforceable; if the tenant does not meet these terms or conditions, there is no legal penalty that the LTB can enforce for their failure to do so.

An example of a condition that is allowed on a Consent Order, but is not enforceable: “When the tenant vacates, they will leave the apartment in a broom-swept state.” This condition is not forbidden by the RTA, so it is allowed to be included in a Consent Order. However, since it is not a condition that a board member is permitted to impose, this condition is not legally enforceable.

An example of a term that is not allowed on a Consent Order: “The tenant will be responsible for paying 15% of the cost of maintenance of the apartment.” Since in the RTA, the landlord is always responsible for maintenance of the apartment, the board member would not be permitted to include that term in the Consent Order.

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Settlement Breach

If a tenant breaches a Mediated Settlement Agreement or Consent Order by doing the same prohibited behavior within the next 12 months, the landlord can, within 30 days of that breach, without notice to the tenant, return to the Landlord and Tenant Board and complete a Application to End a Tenancy and Evict a Tenant – Tenant Failed to Meet Conditions of a Settlement or Order (L4-B form). In most cases, the board will issue an eviction order without holding a hearing.

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Paralegal Representation

Having an experienced paralegal who knows:

  •  the law, the RTA
  • the case law the board member must follow,
  • the wider options you have in a settlement versus the limited options in a hearing,
  • the risks you may face in a hearing
  • how to skillfully create a well-crafted settlement agreement that can be a win-win situation for both parties
  • how to get a legally enforced consent order to protect you

     will save you time and expense, stress and frustration.

Every day I receive calls from landlords wanting to hire me for LTB and Small Claims Court Ontario matters. I have over 23 years of experience as a paralegal.

If you are in Toronto or the GTA and you need to hire an experienced, paralegal Ontario, contact me:

Marshall Yarmus

Civil Litigations

(416) 229-1479

https://civilparalegal.com/home_services/landlord-and-tenant-board/

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