Monday, 10 December 2012

PAYMENT PLANS FOR ARREARS OF RENT

A simple reality of life is that tenants in Ontario sometimes fall behind in their monthly rent obligation.  When that happens a landlord may decide to give the tenant a break and work out something that is mutually acceptable or alternatively the landlord will immediately serve a Form N4--Termination for Non-Payment of Rent and seek to enforce the legal rights available to him.

The termination process for N4's already has built into the procedure a voiding mechanism that effectively forgives the late payment of rent.  Once an N4 is served a tenant has 14 days to pay the rent.  If the rent is not paid after 14 days (by the date set out in the Form N4), the landlord may then apply to the Ontario Landlord and Tenant Board to get a hearing to terminate the tenancy and get an eviction Order. 

An application for a hearing is held within a few weeks of filing the application with the Landlord and Tenant Board.  At that hearing the Adjudicator will determine the amount of rent in arrears and absent any special circumstances Order that the tenant shall pay the rent arrears within 11 days of the date of the Order.  If the arrears (plus costs of $170) are paid by the date stipulated by the Adjudicator then the eviction Order is void and the tenant gets to stay in the rental unit.  If the arrears and costs are not paid, then the landlord may proceed to have the eviction Order enforced on the date set out in the Order (normally the 12th day after the date of the Order).

What about those situations where tenants simply are unable to pay the rent arrears?  What if the reason for the rent arrears is a lost job, illness, robbery, or some other temporary set-back.  Is the tenancy doomed if the tenant is unable to pay the rent arrears within the time period provided by the Residential Tenancies Act?

In fact, a tenant who is unable to pay rent arrears may still be in a position to maintain their tenancy.  The adjudicator has discretion, under section 83 of the Residential Tenancies Act, to make an Order that is appropriate under the circumstances.  For example, a tenant who has rent arrears may propose a payment plan that extends over months or even a year.  The reason for the rent arrears and the personal circumstances of the tenant are quite relevant for the adjudicator.  If the tenant is able to demonstrate an ability to pay ongoing rent and the payment plan for the arrears is reasonable, then it is quite likely that the plan will be accepted by the Adjudicator. 

Any payment plan that is ordered will be conditional on the tenant maintaining the plan.  If the tenant should fail to meet any of the conditions the Landlord will be able to obtain an eviction Order based on the tenant's breach of the Order.  It is for this reason that it is quite important that whatever payment plan is proposed by the tenant that the plan be reasonable and capable of being met.  Otherwise, the only thing that will be accomplished by the payment plan is a temporary reprieve of the eviction.

Michael K. E. Thiele
Lawyer
Quinn Thiele Mineault Grodzki LLP
Ottawa, Ontario, Canada

1 comment:

  1. The Residential Tenancies Act is a very helpful law; however, it's sad to say that some people do not know about it. Tenants should be aware of how they can exercise their rights in pursuant to this law. Nevertheless, thanks for this very helpful article. Will be looking forward to your future posts.

    ReplyDelete

IMPORTANT NOTICE

Any answers provided are intended to reflect the Law of Ontario, Canada. The answers are not legal advice and no one should rely on the answers provided as legal advice. The answers are intended to be general information about Ontario Law and are the personal view of the author based on the limited facts provided to the author. The answers may not be legally accurate and may indeed be contrary to the law of Ontario. Answers and conclusions drawn may have been different if facts had been shared that have not been disclosed in the comment/question. This blog is intended to assist people in learning about Ontario Landlord and Tenant Law. However, if you have actual legal problems this blog should under no circumstances replace proper legal advice obtained by retaining a lawyer or licensed paralegal to advise you. Nothing in this blog, comments submitted or answers provided, gives rise to a solicitor and client relationship. Comments are published as submitted and commenters should be aware that if they identify themselves in a comment that their identity will become public upon the comment being published. Comments that have been published may be deleted upon request to the author.

Search This Blog

Follow by Email

About Michael Thiele

My photo

Ottawa lawyer and partner at Quinn Thiele Mineault Grodzki LLP.  Graduate of Queen's University in Kingston, Ontario.  Called to the bar in Ontario in 1997.  Undergraduate degree at Colby College, Waterville Maine, U.S.A.