Every so often, a real estate horror story hits the news. Tenants who damage property, unpaid rent, late payments, unacceptable behavior – being a landlord in the GTA isn’t always easy.
Take the case of one Toronto property owner, who rented her North York home to a young family last year. Shortly after moving in, the tenants told her they couldn’t pay rent as a family member had died, leaving them with funeral expenses. She granted them a 14-day extension but it didn’t end there.
Next, the tenants reportedly refused to pay rent altogether, despite a court order against them. They’ve now accrued around $14,000 in unpaid rent and the unfortunate landlord still hasn’t recovered any of that growing bill.
And she’s not alone. Terrible tenants are a common theme in Toronto, and it’s not just unpaid rent that keeps GTA landlords up at night – destructive tenants can also cost thousands in property damage.
Where did these landlords go wrong?
There are safeguards in place to protect landlords, so it’s important to know your rights. The Landlord and Tenant Board of Ontario (LTB) sets out a tenant’s obligations and provides recourse if they’re not met.
It’s also worth noting that had these landlords enlisted a property management company, they would likely have avoided these problem tenants. Property managers use stringent screening methods to vet potential renters, and are highly experienced in weeding out those likely to cause trouble.
Mistake 1 – Granting the tenants a 14-day rent extension on their first payment
Rent extensions should only be granted in very specific circumstances, such as a job loss or other unexpected event that directly affects ability to pay. They’re not intended as a perk or a bargaining chip. When tenants casually ask for an extension, as they did in this scenario, it’s perfectly acceptable for landlords to refuse the request.
While some tenants may be genuinely worried about their ability to pay, others are just testing their limits – feeling out a landlord to see if they can take advantage of their generosity.
Mistake 2 – Not applying to LTB when the rent extension deadline wasn’t met
The rent extension may not have been warranted (and a property management company would never have granted it) but if it’s granted and then ignored, landlords should take immediate action.
The landlord with the rent-dodging tenants waited months to file a complaint, giving them an opportunity to skip even more payments. If a tenant doesn’t pay rent, landlords can issue an N4 form – Notice to End a Tenancy Early for Non-Payment of Rent. If they continue to withhold payments and refuse to move out, landlords then file an L1 application to evict the tenant and collect what they’re owed. If they pay, this order can simply be rescinded at the discretion of the landlord.
Mistake 3 – Failing to properly screen tenants
In Ontario, landlords are not allowed to collect damage deposits, they can only give the tenant a notice of termination and/or ask them to pay for the damages. If the tenant doesn’t pay, the landlord can then apply to the LTB for a judgment for the extent of the damage and to resolve the situation.
This makes it even more important to properly screen tenants before they set foot on your property. Evictions and tenancy disputes are stressful. Even the most straightforward cases can drag on as costs climb. Enlisting the help of a reputable property management company can help landlords avoid these kinds of headaches.
Highgate Property Investments is a full-service property management group with decades of experience helping Toronto landlords make the most of their investment. Our team will handle everything related to your tenant – vetting them beforehand, collecting payments, and dealing with disputes. Contact us today and never deal with problem tenants again.