Preventing or limiting rent arrears
As a landlord, you have financial obligations to meet each month. But what happens when a tenant can’t meet theirs? The following are some best practices from ONPHA members on eviction prevention and rent arrears.
Having an early intervention strategy is key to preventing arrears from getting out of hand and making it difficult for the tenant to catch up.
Be fair, firm, and consistent
Establish clear policies and procedures for addressing arrears that are respectful and non-judgmental of tenants, but also maintain your fiscal responsibilities. A good policy should lay out what has to happen, when it has to happen, and what consequences result from failing to make arrangements to pay. It should apply to all tenants – both rent-geared-to-income (RGI) and market rent tenants.
Know when to be flexible
Consider offering additional methods for rent payment, such as:
- INTERAC debit payment
- Pay direct (e.g., Ontario Works or Ontario Disability Support Program)
- Pre-authorized payment
If you suspect the reasons for the arrears are related to a disability or a barrier under the Human Rights Code, be prepared to accommodate the tenant’s needs (e.g., be flexible with deadlines, take extra time to explain the issues, make referrals to an outside agency, etc.).
Following up can be as simple as a phone call or a reminder letter. The letter should advise the tenant that rent is now past due and that legal action will begin if the deadline is not met or arrangements for payment are not made. If staff are able to make personal visits, this may reduce the need for further follow up.
A repayment agreement can be negotiated at the request of the tenant. Repayment agreements may work for some non-profits, but might not be practical for everyone, which is why some providers serve a notice of termination first.
If the tenant does not respond to your attempts to contact them (or if the tenant defaults on the repayment agreement), issue an N4 Notice to End a Tenancy Early for Non-Payment of Rent. Include a note on the N4 to offer referral to community resources such as an on-site support worker or external case manager, rent and/or food bank, social assistance or family support office, or a money management program or credit counselling service.
Call the tenant to follow up on the N4 to make sure they understand the consequences. If you do not receive a response, file an L1 Application to Evict a Tenant for Non-Payment of Rent and to Collect Rent the Tenant Owes with the Landlord and Tenant Board (LTB) after the voiding period is over.
Prepare to mediate
You may be able to use the mediation services at the LTB to help you clarify issues, discuss options, and come to an agreement. These services are available at any time and landlords and tenants can set up an appointment prior to the hearing date.
Document, document, document!
Keep a record of all your efforts to get the tenant to pay the arrears. It will be invaluable if you end up at a hearing at the LTB.