Ontario Landlords: Be Prepared for Delays and Disputes If You Need to File an Own-Use Eviction

With interest rates rising and changing financial circumstances, many landlords are looking to move into their own rental properties. Even if they aren’t experiencing hardship, they may have a family member who is, and they want to help them out by moving them into their rental property instead of the existing tenant. 

Some common scenarios that can lead to this include the landlord or someone in their family going through a divorce, or having senior family members that need to move out of their homes due to financial hardship. 

The problem is that this has become much harder to do. It used to be that you would just issue an N12 notice and the tenant would move out within 60 days, no questions asked. However, this has changed significantly. Some landlords have been abusing N12s to get lower-paying tenants out of their units, only to re-rent them at a much higher rate. This has led to pushback from tenants, with about 25% of N12s being disputed by tenants at the LTB in 2024. 

The problematic nature of an N12

The problem with an N12 is that there is no way to prove in advance that you or an immediate family member will move into the property. The filing of the N12 itself, on its face, is a legal declaration that this will happen, but the legal system relies on tenants to do the followup and sue if they see their former property re-rented at a higher price. 

Asking the LTB to verify and/or enforce if the landlord or family member has moved in after the fact is a non-starter. The Board can barely keep up with applications on file, with average waits of six months or longer for everything but emergency situations. Instead, they rely on tenants to file after-the-fact disputes. There was talk of amending the Residential Tenancies Act to tighten restrictions around personal use evictions, but the changes enacted in the recent Bill 97 apply only to renovation and repair evictions.

Then we have the current rental market. The chances of your tenant finding a unit for the same price is extremely low, giving them a significant incentive to challenge your N12 with the LTB. 

Potential solutions to the N12 problem 

Landlords are used to offering “cash for keys” if they plan to sell the property. This strategy may have to be extended to N12s in order to ensure a smooth transition. The amount should be enough to cover the difference in rent for about six months, which should be enough incentive to get any well-meaning but cash-strapped tenant to move. Tenants who are in more desperate situations like being on a fixed income may not accept the offer, but most others will. 

If you are moving into the rental property yourself because of a financial hardship, you may be able to take out a HELOC on the property to get the “cash for keys” amount you may not have in the bank. This would be less of a hit than dragging the whole process out with a dispute and hearings at the LTB. Keep in mind that you must still follow the terms of the N12 even if you offer a “cash for keys” deal; you or the family member must live in the unit for at least 12 months before the property is sold or re-rented. 

If you are considering letting a down-on-their-luck family member move in, this does not make financial sense unless you would otherwise be financially supporting that family member. It may be best not to make that offer in the current landscape if they have somewhere else to go. 

If you need help managing a rental property, we can take care of everything for you. Contact us today to find out more!