Common Landlord Mistakes

After serving three years as an adjudicator at the Ontario Rental Housing Tribunal and now as an agent for landlords, I’ve seen it all, including careless mistakes that cost landlords time and money. Here is a list of the most common errors I saw “on the bench” in the hopes that you might avoid repeating them.

Not using proper a lease form

A lease, or tenancy agreement, may be written, oral or implied, but if you want to prove what the rent is, or the length of the lease term, or limits to parking, it’s much easier to prove if these things are set out in a lease. Always use a written lease, and include in it the proper wording for PIPEDA disclosure. Same for rental applications, and watch out for Human Rights Code wording.

Not checking references

Landlords could steer clear of problem tenants by simply checking references and speaking with previous landlords. I’m always amazed by indignant landlords claiming that a tenant has damaged their basement, when the tenant appears so obviously difficult, belligerent or even violent.

Having utility charges as a separate charge or letting the tenant pay directly

Tribunal Members will generally not allow you to claim for utilities that tenants have failed to pay to the utility company, or failed to re-pay you for separate utility charges. To collect, you will have to take the tenant to Small Claims Court which could take 6 months. Another risk is that the utility companies may hold the property owner responsible for unpaid utilities, even if the bill is in the tenant’s name, although it seems that this question was settled in favour of landlords in Ontario’s Superior Court this year in a decision called Duong v. Waterloo North Hydro. For all these reasons, it is far better to just include whatever you think is the proper cost for hydro, water and gas into the tenant’s monthly rent.

Putting NSF’s charges and Last Month’s Rent on the N4 form

Too often, landlords try to be over-specific or over-ambitious, and put charges like an unpaid last month’s rent deposit or an NSF fee or unpaid utilities on an N4 termination notice. By doing so, it’s likely that the Tribunal will find the entire notice defective, and while you can still claim for the rent arrears on the L1 application form, you’ve lost the hammer of eviction. Keep the N4 notice simple and easy to understand.

Sufficiency of information on N5 /N6 /N7 notices of termination

Remember, N5 notices are meant to be voided by the tenant correcting their behaviour. N5 notices about conduct must be specific, with dates, names and sufficient information about the alleged conduct so that the tenant knows what he or she has to do to void the notice and keep out of trouble. This was set out in Shelly Ball v. Metro Capital Property in the Ontario Divisional Court in December of 2002. If you fail to include specific and sufficient detail, the notice will be found to be defective, and your application thrown out.

Not understanding 7 day void period on N5’s, and N5’2

N5 notices of termination can be voided, if the tenant corrects their behaviour as set out on the notice within 7 days. Often, landlords serve a second N5 notice even though the behaviour never improved, or worse, landlords fail to serve a second N5 notice if the tenant behaves well for 7 days and then commits the same or similar behaviour in the 6 months following the voiding of the notice. In the latter case, the first N5 is of no use.

Not sending in certificates of service to Tribunal

Landlords waste time having to appear at hearings for applications that should have been resolved by default judgments had they simply sent in their certificates of service to the Tribunal, showing that the documents were served on the tenant by an acceptable method. More often than not, tenants don’t dispute arrears applications, but the Tribunal will send the matter to a hearing, rather than issue a default order if the landlord hasn’t sent in the certificates of service.

Forgetting to claim post-termination per diem compensation on L1 form

If you don’t fill in the box with daily post termination compensation on the L1 application, you will only be entitled to arrears of rent up to the termination date in the notice of termination. This date could be months from the date the tenant actually moves out. Always fill in this box. To calculate the per-diem amount, multiply the monthly rent by 12, and divide by 365.

Filing L1 prior to the date following the termination date in the N4

A big time and money waster is filing the L1 application prior to the day following the termination date in the N4 notice. By jumping the gun, you jeopardize the eviction part of the order and waste $150.

Serving tenant with N4 prior to the day following the day the rent is due

The rent is not due until midnight on the day the rent is normally paid. If you serve a tenant with a notice of termination on March 1st, and the rent is usually paid on the first, the notice is defective and your eviction application will get thrown out. Don’t serve the notice of termination until the 2nd, and make sure that you allow at least 14 days (for a monthly tenancy) from the date of service to the termination date in the notice. For example, if you handed the notice to the tenant on March 10th, the first possible termination date on the notice would be March 24th. For service by mail, add 5 days.

Mistakes often result in having to start the entire process over, beginning with the serving of the notice of termination. And worse, sometimes mistakes mean that the application is dismissed “with prejudice”, which means you cannot re-litigate that same claim.