UNABLE TO PAY RENT DUE TO COVID 19 /CORONA VIRUS

What happens if, due to Corona virus, I can't pay my rent?

There are numerous comments posted to this blog all asking the same or similar question.  What should a tenant do if they can't afford the rent, or fear not being able to afford the rent because of COVID 19?  The "because" arises from a concern that wages/paycheques have stopped or the ability to earn has stopped because people are not going to work.

At this stage most of the questions are anticipating problems and are reflective of "worry" and "anxiety" in being able to pay next month's rent that will be due April 1, 2020.   For most tenants it will be a very unusual circumstance to be unable to afford the rent and other debts as they become due.  The hard reality for many people will be that they don't have the income or savings to meet all of their expenses; including rent.  What does this mean for rental housing?  Is there a prioritization of expenses and how do you decide what to pay and what to hold back on?  I won't give advice on prioritization but simply set out the implications of non-payment of rent (below) and perhaps that will assist you in deciding what expenses will have priority.

The first thing to realize is that the inability to pay rent, being behind in rent, or needing time to pay rent, does not result in any kind of immediate eviction.  Landlords are PROHIBITED from taking unilateral action to evict a tenant for non-payment of rent.  It is simply illegal to force a tenant to leave because rent is late.  In fact, if a landlord threatens to take self help actions to forcibly remove a tenant the landlord is subject to prosecution.

Fully aside from COVID 19, the regular rules (pre-COVID 19), still apply.   These rules favour the maintaining of tenancies and these rules give lots of chances to maintain a tenancy even when rent is not immediately paid.  A tenant is protected, if they find themselves in a tough spot and are unable to pay the rent.  A  landlord must still follow the rules set out in the Residential Tenancies Act, regardless of the reason for non-payment.  The rules (summarized) and the minimum timeline are as follows [which presumes that landlord taking legal action as soon as the law allows]:

1. Once the rent is late (day after rent is due) the landlord can choose to start the legal process.
   
   
2. The landlord will prepare a form N4 which is a Notice of Termination for Non-Payment of Rent.
   
   
3. The N4 Form, for tenancies where rent is paid for a month at a time (as opposed to weekly and daily), is required to give the tenant 14 days to pay.  The 14 days is indicated in the N4 Form (middle box in the centre of first page) as a termination date.  The landlord is not allowed to take any action until the termination date has passed.  This is effectively an automatic 2 week grace period.
   
   
4. If the tenant pays the rent arrears before the termination date then the N4 is void (and the landlord can take no further action at all).  It is illegal for the landlord to charge a penalty, interest, or any other kind of charge for being late with the rent.
   
   
5. If the Termination date comes and goes and the tenant has not paid the rent (and hence has not voided the N4), then the landlord is permitted to file an application to the Ontario Landlord and Tenant Board.  The landlord uses a Form L1 to do so.  Once the application is filed the Landlord and Tenant Board will schedule a hearing and mail the tenant a Notice of Hearing.  The typical wait time between filing the L1 and a hearing date is several weeks.
   
   
6. Any time before the hearing date, if the tenant pays the rent plus the application fee (maximum $190), the eviction proceeding is voided and cancelled.  The tenancy then continues.
   
   
7. If the hearing proceeds, the tenant is given an opportunity to dispute the amount of the rent arrears.  Presuming the arrears are accurate the tenant is given an opportunity to present a payment plan or to seek other relief from eviction based on whatever relevant circumstances there are.  This is called section 83 relief (it is a fairness/justice power).   Grounds for relief include illness, loss of job, accident, tragedy, bad luck and basic fairness and empathy.  Relief is likely to be granted if the tenant can demonstrate a plan that has the tenant paying ongoing rent plus making payment towards arrears within a reasonable period of time.
   
   
8. If the tenant is unable to convince the adjudicator to give more time (or a payment plan), then automatically the LTB will order the tenancy terminated within 11 days of the date of the Order--subject to a pay and stay.  Even on a refusal of discretion the LTB is still required by law to allow the tenant a further 11 days to pay the amounts owing and thereby void any eviction proceeding.
   
   
9. The Order will allow the tenant to void the process and stay (i..e continue the tenancy) if the rent plus the application fee (max $190) is paid before the Order is enforceable (i.e. 11 days from the date of the Order--this is called a "standard order").
   
   
10. If the tenant does not pay the amount Ordered by the date specified in the Order then the Landlord can take the Order to the Sheriff and ask the Sheriff to enforce eviction.
    
    
11. No one in Ontario, other than the Sheriff (Court Enforcement Officer), is entitled to enforce evictions.  This includes the police (i.e. the police do not enforce eviction orders).
    
    
12. The Sheriff will (typically) give a tenant notice of an intended eviction date.  In Eastern Ontario a tenant gets 7 days notice of an intended eviction by the Sheriff.  This means that the Sheriff attends at the rental unit, posts a Notice to Vacate form and comes back 7 days later to enforce the eviction.  The exact date and time that the sheriff is coming back is specified in the Notice to Vacate.
    
    
13. Note that in other parts of Ontario the Sheriff will sometimes serve a Notice to Vacate by mail as opposed to posting it on the door.
    
    
14. Once during a tenancy, a tenant is permitted to pay the rent owing plus the costs prior to the Sheriff showing up.  If this is done then the eviction Order can be voided.  Note that the Landlord and Tenant Board has a special process for this (it is called a Motion to Void) and the steps of that process should be followed by reviewing the LTB website.

The above are the standard steps that are followed in Ontario.  These steps applied before COVID 19 and they apply now after the Corona Virus.

Is there anything else that is different?

The processes set out above in paragraphs 1 to 14 still must be followed.  The current reality is that certain steps in the paragraphs listed are simply impossible to invoke at this time.  This impossibility benefits tenants who find themselves unable to pay the rent (currently) because it will be impossible to evict tenants for non-payment of rent.  Eviction will only again become possible when the processes go back to normal and hearings are possible.

What has become impossible is that landlords can not easily apply to the Landlord and Tenant Board.  COVID 19 service reductions have made it impossible to file applications at the LTB (no counter service).  Currently, online applications continue to be accepted but there are NO hearings being scheduled.

Here is the announcement on the LTB website confirming that hearing processes and counter services are suspended (current as of March 18, 2020):

Important Notice

COVID-19 Policy – Postponing Hearings

Effective today, Tribunals Ontario is implementing a new policy to postpone in-person hearings and reschedule to a later date. Where feasible, alternative hearing options such as written and telephone hearings will be considered to minimize disruption to hearings across the organization. In addition, all front-line counter services will be closed as of March 16 until further notice.

For more information, please see the news release.

Without hearings being scheduled it is impossible for there to be an eviction Order.  The pay and stay provisions and timing of the deadlines will not occur until there is actually a hearing.  At the moment, hearings at the Ontario Landlord and Tenant Board are cancelled until further notice.  A tenant will only face a risk once the COVID 19 / Coronavirus restrictions are lifted and the LTB begins scheduling hearings again.

Tenants who are already part way through the process are also safe from eviction at this time.  If there already is an eviction Order and the Order is enforceable it is clear now that the Sheriff is not enforcing evictions.  The Sheriff has stopped evictions and the government of Ontario has instructed the Sheriff not to enforce eviction Orders for the time being.  Until the Sheriff goes back to work and the COVID 19 restrictions are lifted there is no risk of eviction by the Sheriff.  If, during this time, a tenant can cobble together the rent arrears and it would be the first time during the tenancy, the tenant could pay the rent and void the eviction altogether (even after the COVID 19 restrictions are lifted).

When things go back to normal

I expect that once the LTB starts hearings again and non-payment of rent applications are again heard, that the hardship caused by COVID 19 will be a real factor under section 83 of the RTA.  This is the discretion section that will certainly take into account the extraordinary circumstances caused by this emergency.   While the outright cancellation of rent arrears is doubtful, I do imagine that extended payment plans and delayed enforcement will be a common feature of future Orders so long as the tenant can demonstrate a reasonable plan to get back on track.

Is there any help for tenants or landlords?

Indeed there is discussion and broad statements from government that support and assistance is coming.  The Federal Government and Provincial Government have made announcements of support programs.  Unfortunately, the details are unclear and with so much changing, so quickly, it will simply be a matter of monitoring the government websites for details of how to get support.  As far as I have seen there is nothing immediately available.

Good luck and good health to everyone during this emergency situation.  

Michael K. E. Thiele

www.ottawalawyers.com