Michael Conway - Ryder-Burbidge Hurley Foster
The COVID-19 pandemic continues to change the ways that individuals and businesses operate every day. As people learn to adapt to the "new normal" it is becoming important to address remnants of the old normal. A fairly common practice for landlords and prospective tenants is to sign lease agreements months before the lease actually becomes effective. This practice will likely cause upcoming problems.
This practice is especially common among landlords who rent to students. Given that college and university students will often live elsewhere during the summer, signing the lease ahead of time lets them see the unit while they are still in town and provides a level of certainty to both landlord and tenant that a rental is secured come September. With an increasing number of post-secondary institutions moving to an online model for the upcoming year, many students will find that they no longer have a need for the rental unit they signed a lease for before the pandemic started. What are a landlord's options if that tenant decides simply to not show up to the unit and not pay rent?
Come to an arrangement with the tenant
A landlord may not want to necessarily end the tenancy and evict the tenant. It may be that the tenant intends on arriving later and the landlord is willing to accommodate the late arrival. It is important to note though that unless the lease is altered or outright ended, it continues to be a binding legal agreement. What this means is that even if the landlord is alright with the tenant arriving late, they are still entitled to the rent from when the lease begins. So long as the lease is valid and the rental period has begun, the tenant is obligated to make rent payments. Consequently, a landlord is within their rights to insist on rent payments even if the tenant does not show up. If the landlord wishes to maintain goodwill with their tenant or continue the tenancy, an agreement may be the quickest and easiest way to accomplish this.
For example, a lease in Kingston was meant to begin on September 1st and the tenant was to pay $1,000 in rent each month. On September 1st, the landlord finds that the tenant has not moved in and after many attempts to contact them, the landlord learns that the tenant chose not to move back to Kingston as his classes are online until January. The tenant expresses regret that it has happened this way and would like to be able to live in the unit starting in January. If both parties are amenable, the landlord and tenant could resolve the issue by coming to a binding agreement where the tenant pays $500 per month until January and then $1,500 per month from January until April.
A binding agreement between landlord and tenant can equally resolve disputes where the lease agreement will be terminated, and the tenant will never live in the rental unit. A landlord may prefer this option where they feel that they could re-rent the unit to a new tenant or if they simply do not wish to continue the tenancy with an individual who would not honour their original agreement.
Using the earlier example of the Kingston lease starting in September, if the tenant had simply said that classes are going to be online this year and so I don't need the apartment anymore, the parties could equally come to an agreement which would end the lease. For example, the tenant agrees to pay an amount representing two months rent and further agrees that the lease agreement is terminated. The main benefit to this approach is that the landlord can avoid the Landlord and Tenant Board (LTB). This would save time, effort, and money that can be used to look for a new tenant to rent the unit.
The Ontario legislature recently passed Bill 184, Protecting Tenants and Strengthening Community Housing Act, 2020 which gives landlords expanded rights when they have entered into an agreement with their tenants to re-pay rent owing to them. If the tenant breaches the terms of the agreement and does not make the agreed upon payments, landlords can make an ex parte application to the Landlord and Tenant Board for an eviction order. This means that landlords can make an application, without notice to the tenant, to have an order issued requiring the tenant to pay the money they owe and vacate the rental unit. While an order vacating the unit may seem redundant if the tenant is choosing not to live in the unit, it would give the landlord the legal right to take possession of the unit and rent it to someone else.
Seek eviction from the Landlord and Tenant Board
If a tenant does not show up at the beginning of the lease and does not make rent payments, then the tenant is considered to be in arrears of their rent. Rental arrears are a very typical ground for landlords to seek eviction of their tenants. It is important to note that, in Ontario, the only legal way to evict a residential tenant is through an order from the Landlord and Tenant Board. If the tenant falls into arrears, then a landlord can begin proceedings to have them evicted.
The process must be done in accordance with the Residential Tenancies Act and the Landlord and Tenant Board's rules. If any part of the process is done incorrectly, a tenant will be able to have the landlord's application dismissed and the entire process will need to start over again. The process begins when a landlord gives notice to the tenant that they intend to terminate the tenancy early due to non-payment of rent. The landlord must provide a termination date that is at least 14 days after they have provided the notice. If the tenant does not pay the amount owing by the termination date, then the landlord can file an application to have the tenant evicted and pay the amount of rent owing. After the application is filed, the LTB will schedule a hearing to determine whether they will grant an eviction order. At the hearing, the landlord must prove that the tenant has not paid the amounts agreed to in the lease. If the LTB is convinced that the procedures have been correctly followed, the tenant does owe rent, and there are no other reasons why the tenant should be permitted to extend the lease then they will issue an order terminating the lease and requiring the tenant to pay the amounts they owe. If at any point during the proceedings the tenant pays the amount owing, then the eviction process will end, and the lease will continue to be in effect.
Evicting the tenant would allow the landlord to take back legal possession of the unit and be free to use the unit as they wish. It is generally not difficult for a landlord to demonstrate that they have not received payment that is owed to them. The downside to this approach however is that it is lengthy and potentially expensive to seek recourse from the LTB.
It is also important to note that in response to the COVID-19 pandemic, the government of Ontario put certain measures in place regarding residential evictions. On March 19, 2020, the Chief Justice of Ontario made an order suspending all residential evictions in Ontario. All evictions were to be suspended until the end of the month that the state of emergency in the province was ended. The state of emergency was ended on July 24, 2020 by way of the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020. As a result, residential evictions are no longer suspended as of August 1, 2020. As of that date the LTB has once again begun scheduling non-urgent eviction hearings. Despite the pandemic, seeking an eviction is still an option open to landlords whose tenants do not show up for the beginning of their leases.
Seek only payment of rent from the Landlord and Tenant Board
Should a landlord be unable or unwilling to come to an arrangement with a tenant for payment of rent owing but does not want to evict the tenants, they can file an application with the LTB seeking an order that the rent owing must be paid. The process is less complicated than for seeking an eviction and does not require prior notices to be given. The process may be just as lengthy though as it involves filing an application with the LTB and waiting for a hearing date so that an order can potentially be issued.
As with any situation concerning landlords and tenants, the best path forward will depend on the individual landlord and tenant. If you have a concern with any lease agreement or the potential termination of a lease/eviction please contact Ryder-Burbidge Hurley Foster at 613-546-2147 or email [email protected] for assistance with your specific issue.
This article provides general information and does not constitute legal or other professional advice. It should not be relied on as legal advice or opinion. Please contact Ryder-Burbidge Hurley Foster for detailed legal advice should you have questions of any kind.