How to manage a non-paying tenant in Ontario

The most common scenarios when it comes to issues with tenants around rent payments are tenants who consistently pay late, those who only pay a portion each month, and tenants who don’t pay at all.

For tenants who make partial payments or who make late payments but do pay in full, it might be worth chatting with them about the reasons why and trying to work out a solution so they can get back on track. This can include signing a payment plan with the tenant. More information on payment plans can be found below. 

If a tenant is struggling to make full rent payments, consider ways to offset the lost income and still keep them as tenants. For example, they might take on some property maintenance tasks like raking leaves in the fall or shovelling snow in the winter. The money saved in this scenario could easily recoup some amounts of missed payments, especially if this is a good and generally reliable tenant you don’t want to lose.

When to use the N4 notice

N4 notices are the most formal way to document a history of both late payments and partial payments. It's a notice to terminate a tenancy for non-payment of rent. If the tenant pays the rent they owe then the notice is considered void and the tenancy cannot be terminated based on the N4 notice. Read our guide to the most commonly used forms for landlords.

How to serve “an” N4 form

The N4 can be delivered to the tenant via email (if their rental agreement grants permission for the property owner to communicate with them via email). Other legally valid ways to serve a tenant an N4 form is by:

• Handing it to them or an adult at their current residence.
• Mailing or couriering it to their current address.
• Leaving it in their current mailbox or where mail is currently delivered to them.
• Sliding it under the door of their current residence.

Filling in the N4 form

When a landlord “completes” the N4 form, there is a section that asks for a termination date. If the landlord's agreement with the tenant is based on monthly, bi-weekly or yearly payments,  the termination date needs to be set to at least 14 days after the notice is given to the tenant. For rental payments made every day or weekly, the termination date should be 7 days after the tenant receives the notice.

The termination date is important because if the tenant pays their rent by the termination date, the N4 form is void. 

What to do about tenants who don't pay any rent

The N4 also applies to tenants who don’t pay their rent at all. The Landlord and Tenant Board (LTB) will also likely give them the option to go on a payment plan.

Evicting a tenant for late payments

An N8 notice is the notice that must be filed to evict a tenant for consistently late rent payments. The property owner will typically need to prove that the tenant has been late persistently. What qualifies as persistent is not defined by the LTB, and will be left up to the discretion of the adjudicator. The number of times someone has been late with payment in relation to how long they have been a tenant will be taken into consideration.

For example, someone being late three times during a ten-year tenancy wouldn’t be considered persistent. Seven late payments in the span of 12 months will likely be considered persistent. 

Usually the LTB will not evict the tenant right away and they will be put on a payment plan. A payment plan explicitly states what dates a tenant must make their payments by. If they do not follow the payment plan the landlord will need to follow the rest of the instructions for the N8 notice to continue the eviction process. This will require filing an L2 –  an Application to End a Tenancy and Evict a Tenant. For more information, read our complete guide to evictions. 

When to use L1 forms 

If the tenant doesn’t pay the rent and also doesn’t move out by the termination date stated in the N4, the landlord can apply to the Landlord and Tenant board to evict the tenant and also collect the rent that is owed using an L1 form. This can be done the day after the termination date marked in the N4. 

How to submit the L1 notice

In addition to the L1, the landlord will need a copy of the N4 form they submitted to the tenant as well as a Certificate of Service which outlines how and when the notice was provided. 

The filled in notice form serves as a written notice and it can be delivered by:

• Handing it to them or an adult at their current residence.
• Mailing or couriering it to their current address.
• Leaving it in their current mailbox or where mail is currently delivered to them.
• Sliding it under the door of their current residence.
• Via email if in the tenancy agreement they granted the landlord permission to send them documents via email. 
  

When to use an L9 form

The L9 form is the one a landlord can use to collect the rent they are owed without evicting the tenant. This can only be filed if the tenant continues to live in the unit. The L9 can be filed the day after the rent payment is due. 

When to use an L10 form

The L10 is a form to collect money that is owed to a landlord from a former tenant. If the tenant moved out more than a year ago, the landlord cannot file this form. 

An L10 can be served to a former tenant by:

• Handing it to them.
• Handing it to an adult at their current residence.
• Mailing or couriering it to their current address.
• Leaving it in their current mailbox or where mail is currently delivered to them.
• Sliding it under the door of their current dwelling.
• Via email if in the tenancy agreement they granted the landlord permission to send them documents via email. 

Attending an Landlord and Tenant Board hearing

Upon filing an application the landlord will be given a hearing date. Both the landlord and the tenant will be given a copy of the application the landlord filed and a Notice of Hearing. The Notice of Hearing will provide details on when and where the hearing will be happening. The landlord should go to the hearing so they can explain their case to the LTB.

LTB hearings can be difficult to navigate and when possible, having legal representation should make navigating the process much easier and increases the chances of the landlord getting the outcome they want (depending on the circumstances of the case). 

What things should a property owner watch out for during these processes?

• The form is not signed or is signed by the wrong person. 
• The rental period is listed incorrectly.
• Inaccuracies when reporting issues related to money.
• Listing the wrong rental address and/or not including the unit number or apartment number on the form.
• The names listed on the form are incorrect.
• The tenant is given the wrong notice period.
• The tenant is not served the document correctly.

Payment plans

Payment plans used to only be given out at an LTB hearings but landlords can now file them with the LTB without having a hearing first. This is a way to work out a payment schedule with your tenant to resolve rent that is owed. The tenant does not have to sign this document or agree to it, but it is an option. 

Copies of payment agreements can be filed with the LTB via email or by mailing it to the local LTB regional office. 

Thoroughly vetting applicants can help mitigate the chances of running into a situation where a tenant is failing to pay their rent. Rhenti’s applications and tenant screening tools include tenant credit checks and reference information to help property owners make the right renter decision. Contact our team to learn more!