Thursday, 1 August 2013

Nickels and Dimes: Applying for Small Arrears

Every once in a while a case crosses my desk that strikes me as completely ludicrous.  That happened this week and I had the chance to have a little laugh at the stupidity exemplified by the application. 

In this particular case my client was the tenant.  Her monthly rent was $1125.  She had an agreement with the landlord to allow her to do some minor repairs that were needed through no fault of the tenant.  The landlord agreed to reimburse the expenses which in this case totalled $97.80.  When no one came to collect the receipts or to inspect the work the tenant put a note with her rent cheque and deducted the $97.80 (rounded to $100) from the rent.

In addition to the deduction for the repairs, the tenant made a deal with the landlord respecting the painting of a bedroom in her rental unit (the prior tenant had painted it an awful colour).  The landlord agreed to supply the paint and the tenant was pleased to provide the labour.  No cash would change hands except that the landlord would provide the paint.  The landlord never delivered the paint and ignored the tenant.  In response to being ignored, the tenant withheld $200 from her monthly rent and indicated that she wanted the paint.

The landlord, instead of contacting the tenant to make arrangements, proceeded to serve a Notice of Termination for Non-Payment of Rent.  He alleged that the tenant was $300 short on her rent as she had paid only $825 towards the rent amount.

On receiving the Notice of Termination for Non-Payment of Rent the tenant got nervous as she had expected a response from the landlord in the form of a conversation.  Hence, she paid the Landlord $200 via email money transfer--which is the method she had used in the past to pay rent.

The Landlord, perhaps to prove a point or assert his authority, responded to the email money transfer by saying that the password to get the money did not work.  He maintained this position even though the password was the same password used by the landlord for prior months.  The Landlord, knowing the tenant was at work, called the tenant's home and left a message on the answering machine stating that the password did not work and that the tenant had an hour to fix it or he was applying to the Landlord and Tenant Board.  Less than an hour later, while knowing the tenant was at work, the Landlord filed an application to the Landlord and Tenant Board to terminate an evict.

At the Hearing, the Board learned that the landlord, after filing the application but before the Hearing, collected the $200 email money transfer by using the password that he had used in previous months and which would have worked had he entered it "properly".  The Board held that the Landlord should have given the tenant credit for the $200 as it was paid before the deadline in the N4 Notice of Termination.  Hence, the amount of the rent in arrears, at the time of application was only $100.

The Landlord admitted that there was indeed an agreement respecting the receipts for $97.80.  However, he took two positions in relation to this money.  Firstly, he maintained that there was no agreement that it be deducted from the rent and that he wanted to get his rent and then provide the tenant with a cheque. He had no explanation for why the receipts were never picked up nor why the work the tenant did was never inspected and he had no answer to the tenants note, attached to the rent, explaining that she had deducted the cost of the materials for the repairs.

Secondly, the Landlord maintained that even if the tenant were allowed to deduct the $97.80 from the rent, she was still short $2.20 in rent arrears.  He maintained that this amount of $2.20 precluded the N4 (Notice of Termination for Non-Payment of Rent) from having been voided by the tenants payment.   He insisted that he was entiteld at law to come before the Board for $2.20 and that he should get his $170 application fee for doing so.

The Board concluded that the $97.80 was reasonably deducted from the rent by the tenant.  With respect to the $2.20 the Board acknowledge that this amount was indeed short.  However, the Board was concerned that the Landlord would think that spending $170 to pursue $2.20 was a reasonable way of proceeding.  Given the communication from the tenant the Board felt that the landlord had options other than proceeding to file an application to the Landlord and Tenant Board.

As the Order the Landlord was requesting was for $2.20 plus $170 application fee, the Board referred to section 207(4) of ther Residential Tenancies Act.  That section provides that the Board shall not make an order for an amount of money if the amount is less than the prescribed amount.  The prescribed amount, is set out in section 58 of O.Reg. 516/06, which indicates that for the purposes of section 207(4) the amount is five dollars ($5.00).

Accordingly, the landlord's application was dismissed and he lost the $170 application fee.

6 comments:

  1. I have received a notice of hearing based on the application by the landlord to collect rent the tenant owes.

    I had given my 60 day notice to vacate the premises at the beginning of the month accompanied by a cheque for the current month's rent which I short paid based on the calculation that the last months rent deposit, interest owing, and key deposits total was more than the final month's rent. Also the local housing authority assists with my rent payments of approximately $150 monthly which was also used in my calculation. The landlord will receive that assistant payment on the 1st of the last month of tenacy.

    The total amount owing on the Landlord's application (L9) is approximately $350 which includes the $170 filing fees.

    I had included a breakdown of the calculation to the landlord at the time I had given notice and final cheque. Have not been contacted by the landlord previous to finding the notice of hearing under my door. I also do not have a history of being late/not paying rent. I had also included in the final statement of my notice letter "any discrepancy will be paid or refunded".

    What at this point should I do. I am not in a position to frivously pay $170 filing fee that to my full belief by the first of the month will equate to $0 owing by me.

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    Replies
    1. Hi: Frankly, your landlord sounds like a jerk. The only way to deal with this is to go to the hearing and be prepared to prove all of your individual payments (copies of receipts) and prepare a simple ledger showing the rent that is due, the credits against that rent, and the amount that was therefore due for your second last month of the tenancy. Also, have with you and be prepared to show the letter that you sent to the landlord explaining the payment and the deductions. The strength of your argument is of course your math (make sure it is correct) and your right to claim the deductions that you are claiming. "Key money" can be illegal and hence you may have a credit, or it can be an exempted legal charge depending on what the charge was for---i.e. a refundable deposit for a key fob, for example, is legal if the amount is reflective of the replacement cost.

      If your math and deductions are correct then you will win the application and you will not have to pay the $170. If your math is in error, or the deductions are incorrect, then you should argue that the landlord should still be disentitled to the $170 application fee as he never spoke to you about your math and never tried to point out how he disagreed with your math or deductions. Rushing off and filing an application without even trying to talk with you is not civilized behavior and it should not be encouraged by the Board. He could have written you a letter, sent you an email or text, had someone else speak to him on his behalf, or spoken with you directly. If he chooses to do none of those things but instead file an expensive application over a small amount of rent he should be denied his costs (that is how I'd make the argument to the Board).

      Good luck and please let me know how this goes.

      Michael K. E. Thiele

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    2. Thank you for your reply. I feel very confident after reading your reply that this is as I thought. The most baffling part of this is it is not some fly by night landlord but a very large corporation that owns a multitude of properties in Ontario. One of the things that has bothered me since this company bought the building I live in, is the fact they do not pay out annual interest on rent deposits (nor do they apply it to top up account). I was told on one occasion that the corporation can legally hold it for 10 years and that I should be elated with the amount accumulated by then as opposed to getting a small amount annually. It may be a small amount to each tenant, but overall to this corporation and the number of units they have, would be thousands of dollars a year. Who in fact could I contact, tip off, ect to get them to stop this practice and give their tenants what they are owed?

      I was also starting to look into rent abatement after receiving this notice of hearing. I originally had just wanted to get out of my unit as peaceful enjoyment of my unit has been greatly affected in the past 9 months due to new tenants above me (dogs that urinate over the side of the balcony, which has deemed my balcony useless to me) as well as a new super living below me. The super has erected an aluminum shed just feet away from my bedroom window, which, when it rains creates such noise that if I am sleeping lifts me straight out of bed. The new super also has a bbq under my balcony, that when used fills my unit with the smell and sometimes the smoke. I, on one occasion heard a guest of their's ask how it was they had a bbq (they are on the ground floor) and her response was "because we are management." Would this rent abatement be worthwhile pursuing based on these reasons?

      I again thank you for the above response, and whole heartedly agree with that first sentence.

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    3. Hi: Because you are going to the Board anyway there really isn't any reason not to file an application if you can get it ready in time (i.e. collect the evidence in support of your statements). Why you gave your notice of termination is relevant to the determination of your right to an abatement. Because the landlord is applying on an L9 and not pursuant to a Notice of Termination you do indeed have to prepare an file an application (Form T2---no charge to file). Had the landlord served an N4 and then proceeded to seek termination and eviction plus the rent then you could have brought up your claim without having to file an application (as per section 82 RTA).

      Will you get a lot for this? Likely not. But you are there anyway--so why not pursue it. The Board will ask if you gave the Landlord notice of your complaints or concerns--i.e. about the dog urinating off the balcony, the shed roof, the barbecue smoke--as notice of the complaint is important to quantum of an abatement. I suspect you may have simply voted with your feet and decided to move out as such inconsiderate behaviour is something that isn't fixed by pointing out the problem to someone who is inherently inconsiderate of others. If this is the case, I wouldn't shy away from pointing this out to the Board and make the point that certain behaviours on behalf of the landlord should not have to be a source of complaint. This will impact the amount of the abatement you get--but you should still get something--and like I said, you are going anyway. When you file your application ask them to link the application to the Landlord's application and make it clear that you would like the landlord's application to be rescheduled to the date of your application. It may require an attendance to adjourn the first hearing to the date of your hearing.

      Good luck.

      Michael K. E. Thiele

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  2. Good Morning,

    I would again like to thank you for your advice. In the end, the landlord came to their senses and withdrew their application with the board. I only found out about the withdraw by contacting the board directly. As far as my application for rent abatement, I am holding that one until I am out.

    I would still like to know if the practice of holding interest on deposit is acceptable as described above, and if not, how to go about having this corrected on behalf of hundreds of tenants.

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    Replies
    1. Hi: Interest on the LMR is not nearly as interesting as it once was as at one time the interest rate was fixed at 6%. The rate now follows the annual guideline increase amount and that amount is significantly less than 6% Landlords often do not credit the LMR interest and it is common. It is a calculation that is often done at the end of a tenancy. If tenant's do wish to have the credit annually they can ask for it or even deduct it from rent owing. The remedy to get it is fairly easy as the RTA gives you a rather quick self help method of getting it. In appropriate cases groups of tenants can get together to file an application against a landlord for relief for something that is happening to the tenants. This issue of LMR interest is not something that I would pursue on a group basis as any tenant who has a concern about it could indeed get the remedy they want. Further, as the interest now tracks the guideline amount the interest really only matches what the last month of rent would be in any event.

      Michael K. E. Thiele

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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.

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About Michael Thiele

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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.