Landlord 101 – Non Payment Of Rent

September 28th, 2010 · 3 Comments · Landlord & Tenant Board, Rental Property

I got this email yesterday. In fact I get this kind of email on a regular basis! When I get an email like this it means I have entirely failed my educational goals for the small landlords I have contacts with. So I’m saying here again “DON’T LET THIS BE YOU”

Rachelle,
I haven’t received rent from my tenants for like 3 and half months now. I know … I know what you said last time. My mistake. I thought that she would be able to pay me back. She’s not working now and the husband pay fluctuates now. She said that she is going to borrow some money but it’s been 2-3 weeks. I think that I’m going to sell this place when they leave. Too many headaches! Can you send them a eviction notice to make it official?  I’m gonna get in touch with my real estate agent to get a price on the house.

The tenants he is talking about are long term tenants who have proven that they are willing and (sometimes) able to pay. They take good care of the property. They have just had unfortunate and unfortunate life situation happen to them. They deserve a lot more consideration than a tenant who moved in last month and didn’t pay his first month in the place. The tenancy is worth saving.

Know Landlord & Tenant Law In Your Province

I wrote a post about What the Landlord & Tenant Board is Like a while back. This is in Ontario. I wrote another post for Million Dollar Journey called The Business of Owning Income Properties. You can find a handy dandy list of all the provincial Landlord & Tenant Boards there.

5 Landlord Tips for Non -Payment of Rent

1 – Don’t Wait To Start The Legal Process

2 – Don’t Wait To Start The Legal Process

3 – Don’t Wait To Start The Legal Process

4 – Don’t Wait To Start The Legal Process

5 – Don’t Wait To Start The Legal Process

No matter when you start the legal procedure it takes about 4 months from start to finish in Ontario. Your tenants have 4 months to pay you from the time you start. So what are you waiting for?

Landlords Who Wait Cause EVICTIONS

If you’re a tenant who doesn’t have enough money to pay all their bills, you will pay the most important bills first. As a landlord it is your job to make sure that your tenants’ housing bill comes first! It’s the most important thing to your tenants that they have a roof over their head if they’re poor. If you make it easy to pay you last, you are creating a situation in which rent arrears build up and it becomes impossible to catch up eventually resulting in an eviction. This is the exact problem you are trying to avoid!

Many tenants are able to catch up one month’s rent if they are behind and many actually do. Many tenants make payment plans and then pay their payments. There are a number of programs to help tenants catch up on their rent. Social services and the rent bank will help out in some cases. There is a limit to how much they will help and it’s not three and a half month’s rent, that’s too much.

The idea here is that you have to prioritize the housing bill over the cell phone, car payment and so on. If you are Mr. Nice Guy Landlord surrounding this issue, you are helping your tenants dig themselves a hole they can’t get out of. Having a place to live is the most important thing. When situations like the above happen to people, job loss or reduced hours, they need to drastically trim their lifestyle and budget. If they can get by without paying their rent, they won’t cut their budget to the bone like they need to, they’ll spend the money on stuff that is not as important as their housing, time flies by and they’ll get evicted because their rent arrears are overwhelming and they can’t catch up.

The Alternate Scenario

The way all professional property managers do it, is that they serve whatever legal forms are required within a few days of the rent coming due. (Within 5 to 10 days) In certain provinces it doesn’t take very long to evict, I’m not sure how they handle this. In Ontario, where it takes 4 months, we serve right away and then follow that with the application to the Landlord & Tenant Board as soon as possible. The tenant then puts a priority on their housing, and either pays monthly payments, and makes significant efforts to get caught up or makes other arrangements and moves out. Sometimes the tenant cannot afford the rent period. The best thing is for them to move on as soon as possible. Whichever way the situation turns out, you have made the bad situation better. You will save yourself money, and reform the tenancy if it’s possible. If there is a way to save the tenant’s housing it will be found in as forthwith a manner as possible and you will avoid outrageous losses.

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3 Comments so far ↓

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  • Timothy

    Hello there, I got a new tenant two months ago. She hasn’t pay her rent for the last month yet. She’s also breaking the rules like bring people home and such. I already gave her notices; but she didn’t care at all. How do I get her out of the house ASAP? THanks, cheers !