WHAT SHOULD A LANDLORD DO IF THEIR TENANT IS NOT PAYING RENT DURING THE COVID-19 PANDEMIC?

It is important that your application gets into the LTB queue as soon as possible as the queue for LTB hearings was already very backlogged before this Covid-19 situation began. Ideally, LTB applications should be processed in a month, but it was already taking 2 – 3 months to get a hearing date. Now, it will be much longer.

Due to the extraordinary COVID-19 situation, many tenants are having trouble with their finances. In light of this, the provincial government has suspended the Ontario Landlord Tenant Board holding eviction hearings until further notice. The only exceptions to this order are matters related to an urgent issue such as an illegal act or serious impairment of safety.

If a tenant has not paid their April rent, the first action the landlord should take is to contact the tenant to ask why the rent was not paid.

Has the tenant’s income severally dropped? Did the tenant lose their job?

You should inquire if the tenant will be automatically receiving or applying for any of these government benefits:

•Employment Insurance

•The new Canada Emergency Response Benefit available for application starting Apr 6, 2020

•An increase in the Canada Child Benefit in May 2020

•The Special Goods and Services Tax payment payable on April 9, 2020

•Increased access to Employment Insurance Sickness Benefit

See https://www.canada.ca/en/department-finance/economic-response-plan.html

Be careful not to harass your tenant. You should document or note any conversations you have had with the tenant about how they will pay rent during this time.

If the tenant is making the effort to pay all or part of their rent, and is availing themselves of government initiatives, a landlord should try to work with the tenant.

If your tenant is deliberately refusing to pay rent, refusing to work with you, or refusing to provide you information on their financial circumstances and the government benefits they have applied for, you should immediately apply to the Landlord and Tenant Board (LTB) for an eviction hearing.

It is important that your application gets into the LTB queue as soon as possible as the queue for LTB hearings was already very backlogged before this Covid-19 situation began. Ideally, LTB applications should be processed in a month, but it was already taking 2 – 3 months to get a hearing date. Now, it will be much longer.

Our office continues to help our landlord clients by serving N4 notices and issuing L1 non-payment of rent applications with the Ontario Landlord and Tenant Board. If you are in Toronto or the GTA and you need to hire a paralegal, contact Marshall Yarmus of Civil Litigations at 416-229-1479 or visit https://www.civilparalegal.com/our_services/landlord-and-tenant-board/

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/

Which is the Proper Venue to File my Ontario Landlord and Tenant Dispute?

The Residential Tenancies Act outlines which landlord and tenant disputes fall under the jurisdiction of the Landlord and Tenant Board (LTB).

The LTB has the exclusive jurisdiction to decide such matters. Any issues not covered in the Residential Tenancies Act (RTA) as being in the LTB jurisdiction must be decided by a different appropriate court. While most landlord and tenant disputes are resolved by the LTB, depending upon various circumstances, not all are. Therefore, it is critical to know which court or tribunal is the correct venue in which to initiate your claim.

If you file in the wrong venue, the court or board will dismiss your case if they do not have the jurisdiction to resolve it.

By the time you are made aware that you have filed in the wrong venue, the timeframe to submit an application to the proper venue may have expired and you will be left with no legal recourse.

Below is an example illustrating how different circumstances affect the determination of the correct venue to apply to if a landlord is submitting an application for rent owed or damages to an apartment.

If the application is initiated while the tenant is living in the rented property, it should be done though the Landlord and Tenant Board.

A similar application submitted after the tenant has vacated the premises should be done though the Small Claims Court. (However, a recent case presented below has put this long-standing practice into question.)

Note that for any landlord or tenant claim exceeding $35,000 (the current monetary jurisdiction of both the Landlord and Tenant Board and the Small Claims Court,) the proper venue for the application is the Superior Court of Justice.

In addition, if you choose to have legal representation by a paralegal, they can represent you in a LTB or Small Claims Court case but not in a Superior Court case. You would need a lawyer in that venue.

Determining whether to sue in the Landlord and Tenant Board or in Small Claims Court is often not as simple as it first appears to be.

If you are contemplating self-representing yourself, you risk having your case dismissed if you submit your application to the wrong court or board. But, if you hire a licensed paralegal or a lawyer, and they incorrectly advise you to sue in a court or tribunal that does not have the jurisdiction to hear your case, you are protected from their negligence by the errors and omissions insurance they are required to carry. (See www.lso.ca  for more information.)

Note, also, that only a small number of lawyers in private practice deal with landlord and tenant matters on a regular basis. So, many are quite inexperienced with LTB cases.

Hire an experienced, licensed paralegal to increase your odds of obtaining a successful outcome, and to save you time, money and frustration.

I list a number of cases below pertaining to landlord and tenant disputes that were dismissed for being in the wrong jurisdiction.

In particular, 3 significant court decisions can assist a party in determining the proper venue to file a claim: [1] Mackie, [2] Efrach.) and [3] Kiselman.

[1] Mackie v. Toronto (City) and Toronto Community Housing Corporation, 2010 ONSC 3801 (CanLII) http://canlii.ca/t/2bf5v

The tenants residing in a community housing project brought a class action claim against the corporation to compel it to carry out repairs needed on the premises. 

Even though the LTB has the jurisdiction to hear disputes regarding a landlord’s obligation to maintain the premises in a proper state of repair, the tenants attempted to characterize the repair claims more broadly as negligence and breaches of the Ontario Human Rights Code and the Charter of Rights and Freedoms.

They took their claim to the Superior Court of Justice which determined that:

“It is, therefore, my opinion that the Board has exclusive jurisdiction to resolve the Plaintiffs’ repair claims. Further, it is my opinion that characterizing the claims as a negligence claim or as an Ontario Human Rights Code or Charter claim does not infuse the Superior Court with jurisdiction. From a jurisdictional perspective, it is the substance and not the form of the claim that matters, and the substance of the Plaintiffs’ claim is a repair claim between a landlord and tenant that is within the monetary jurisdiction of the Board.”

[2] Efrach v. Cherishome Living, 2015 ONSC 472 (CanLII), http://canlii.ca/t/gg2dv   

The apartment next door to a tenant was left unlocked. The tenant alleged that someone entered through the open door, climbed over the balcony, and broke into his apartment. He sued his landlord for negligence in Small Claims Court.

The court determined that the tenant’s claim was filed in the wrong forum, and so dismissed it. The tenant appealed to the Divisional Court. The court used the test of the essential character of the claim as done in Mackie.  The Divisional Court agreed with the Small Claims Court that the essential character of the claim (lack of maintenance) fell within the exclusive jurisdiction of the LTB, and thus dismissed the appeal.

[3] Kiselman v. Klerer, 2019 ONSC 6668 (CanLII) http://canlii.ca/t/j3g30  

Eleven months after moving out, a landlord sued his former tenant, in Small Claims Court, for rent owed, and undue damages to the apartment. The tenant made a motion to dismiss the action, arguing that the LTB had exclusive jurisdiction to deal with these issues.

The Small Claims Court deputy judge dismissed the action stating:

“….the Residential Tenancy Board is the forum to go to in a landlord/tenant dispute.  They have the expertise and the protocol to deal with these matters.”

The RTA, in sections 87(1)(b) and 89(1), clearly states that the LTB loses jurisdiction to hear a landlord’s claim for unpaid rent and undue damages after a tenant has vacated the apartment.

The landlord appealed to the Divisional Court. The Divisional Court, unbelievably, agreed with the deputy judge that the Small Claims Court lacked the jurisdiction to hear the case.

On November 19, 2019, the Divisional Court released the Kiselman decision. This decision will, for the foreseeable future, make it difficult for a landlord to determine the proper venue in which to sue a former tenant after they have vacated the apartment.

Also, since this case was decided by the Divisional Court, it is binding on Small Claims Court deputy judges and Landlord and Tenant Board members to follow the ruling of the Divisional Court.

So, a landlord suing a tenant after they have vacated the premises, needs an experienced, paralegal familiar with case law to persuade the court or board that they are not required to follow the Kiselman decision.

[4] Fei Hu v Lee, 2016 CanLII 78566 (ON SCSM), http://canlii.ca/t/gvmv3

Two weeks before the termination of a tenancy, a tenant and landlord made an oral agreement to split the cost of replacing flooring damaged by the tenant’s dog. It was agreed that the landlord would repay their part of the repair cost shortly after the end of the tenancy.

The tenancy ended on April 30, 2015.The former landlord found a cheque they had received from the tenant post-dated for February 2015. On May 4, 2015, they deposited that cheque.

The tenant sued the landlord in Small Claims Court for theft; for conversion of funds that took place after the tenancy ended, and for the money owed for the split repair costs.

The Small Claims Court considered whether the cashing of the cheque could be characterized as an illegal retention of money under section 135(1) of the RTA.

The court determined that section 135(1) would apply only if the cheque had been deposited during the tenancy. Since the transaction took place after the tenancy had ended, the LTB did not have exclusive jurisdiction to decide the case (The deposited cheque was later revealed to be an erroneous duplicate payment cheque for February.)

In regards to splitting the cost of the floor repair, even though the agreement was made during the tenancy, the landlord’s obligation to pay did not commence until after the termination of the tenancy.

Given the circumstances in the case, and since the court was not aware of any application the former tenant could make to the LTB, it was determined that the Small Claims Court retained jurisdiction.

 [5] Fraser v. Beach, 2005 CanLII 14309 (ON CA) http://canlii.ca/t/1k8v3

The neighbors of an illegal rooming house, by way of an injunction, sought the eviction of the tenants. They made an application in the Superior Court of Justice. The Superior Court granted the injunction and ordered the eviction of the tenants.

The tenants appealed to the Ontario Court of Appeal. The Court of Appeal found the Superior Court made an error granting an eviction by way of an injunction. It set aside the eviction order finding that the authority to evict is exclusive to the LTB.

[6] Spirleanu v. Transglobe Property Management Service Ltd., 2015 ONCA 187 (CanLII), http://canlii.ca/t/ggqqr

Following an LTB eviction order, a tenant’s personal belongings were discarded.

The tenant claimed that the landlord should be liable for the wrongful disposal of his property and took his claim to the Small Claims Court and lost.

He then went before the Superior Court of Justice to re-litigate whether his property was wrongfully disposed of by the landlord.

The Ontario Court of Appeal found that, under section 41 of the RTA, a former tenant is permitted to sue at the LTB for the wrongful disposal of their belongings after an eviction.

Therefore, the jurisdiction of the civil courts was ousted.

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From the preceding examples presented, one can see that suing in the correct court or tribunal is often not easy to determine.

You need a Landlord and Tenant Board expert, an experienced, licensed Ontario paralegal or lawyer, to determine the proper venue to bring your claim. These are just some of the cases your paralegal or lawyer should consider to prevent your claim from being dismissed.

* This blog is not intended for self-represented landlords or tenants to determine the proper court or board to bring a claim.

Paralegal Representation

Every day I receive calls from landlords wanting to hire me for LTB matters.

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

Marshall Yarmus

Civil Litigations

(416) 229-1479

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

If you currently have a case before the Landlord and Tenant Board, or are in the process of filing one, please make an appointment to come in for a free consultation at https://www.civilparalegal.com/appointment/