If you’re a landlord, it’s inevitable at some point that you’ll have a tenant who’s late on their rent. Maybe they’re forgetful. Maybe they just lost their job. Or maybe they’re just trying to pull one over on you. Thankfully, you don’t have to continue living with this situation. There are steps you can take to deal with late rental payments. Let’s walk through them.
1. Talk to Your Tenant
The first thing to do is simply to talk to your tenant. It’s possible that they simply forgot to pay their rent. Maybe they had to deal with a family emergency or had a personal crisis that made them forget. Or, it could be that they had an emergency expense.
It’s entirely possible that the late payment was a misunderstanding, and it will never happen again. Before you escalate to taking legal measures, try talking things out!
2. Work Out a Payment Plan
If a tenant is behind on their rent, it can be worthwhile to work out a payment plan. This can ensure that you get your money, while also ensuring that tenants can afford their payments. This isn’t an ideal solution in all circumstances. But if the person has otherwise been a good tenant, it’s worth considering.
If you go this route, make sure that you have an agreement in writing. As we’ll discuss later, having a paper trail is essential for dealing with these matters.
3. Try Automatic Payments
In some circumstances, it can be make sense to set up automatic payments with your tenant. This option isn’t available to everybody. However, it’s available to certain tenants, such as those with disabilities.
To do this, you’ll need to work with your tenant to set things up. For example, the Ontario Disability Support Program (ODSP) offers a program called “Pay Direct”, which directs government benefits directly to the landlord. This can give both you and your tenant the peace of mind that rent will be paid on time every month.
4. Apply For an Order to Pay
So, what do you do if a tenant simply refuses to pay? In that case, you’ll need to escalate matters to the legal level. In some provinces, you can’t evict a tenant who’s currently in the middle of a lease. However, that doesn’t mean you have to let them live in your apartment for free.
The Landlord and Tenant Board allows you to apply for an Order to Pay. An Order to Pay is a court order that mandates that the tenant pay their rent. It’s a step short of eviction. But it’s a viable option that’s better than waiting for the lease to end.
5. Keep Good Records
Regardless of how you manage your situation, it’s essential to keep good records. The law does not state exactly how many times a tenant must be late on their rent before you can evict them. That decision is made by an adjudicator from the Landlord and Tenant Board.
One thing you should always do is keep a paper record of every missed payment. The better your records are, the better your odds of pursuing a successful eviction. Laws on late payment also vary by province. In some provinces, you can evict for late payment. In others, you can’t.
6. Begin Eviction Proceedings For Late Payment
If your province doesn’t allow mid-lease evictions for late payment, you can still get the eviction process rolling. To do this, you’ll need to file Form N4, a “Notice to End Your Tenancy Early for Non-payment of Rent”.
File this form every month without fail, whenever the tenant is late. By creating a paper trail, you’ll have a better case when you need to adjudicate the matter before the Board. And if the tenant is renting on a month-to-month basis, you’ll be able to start adjudication immediately.
7. Wait Until the Lease Ends
Another option is to simply wait until the lease ends. Admittedly, this isn’t ideal, since you’ll be dealing with late payments or non-payments in the meantime. But in many cases, it’s going to be your only recourse.
To pursue this option, you’ll need to file Form N8, a “Notice to End Your Tenancy at the End of the Term”. Once the lease is over, the tenant will either move out voluntarily, or you can proceed to a Board hearing.
8. Be Aware of Current Events
In many provinces, including Quebec and Saskatchewan, it’s currently illegal to evict tenants due to non-payment or late payment, even if they’re renting month-to-month. This is a temporary measure, due to the COVID-19 pandemic. Check your province’s laws to see what temporary measures, if any, apply to you.
9. Find Another Reason to Evict
Late payment and non-payment aren’t the only reasons to evict a tenant. If you’re dealing with a tenant who’s chronically late or has simply stopped paying, you may be able to find another reason to evict them. One option is simply to sell the unit, but this is unattractive since you’ll lose future income.
Another option is to rent the unit to a family member. If you have a nephew or niece who needs an apartment, this can be a worthwhile avenue to pursue. You can also evict a tenant if their apartment is overcrowded, or if they’re causing disruptions such as noise that affects other tenants.
10. Avoid Tenants Who Pay Late
Once you’ve dealt with your late-paying tenant, you’ll probably wish you never have to deal with that situation again. Thankfully, there’s a way to pre-screen tenants before you rent. By joining the Landlord Tenant Bureau, you can find out who pays regularly and who doesn’t. You can also help existing, good tenants to establish a record for regular payments. It’s a win-win!
As you can see, there are plenty of ways to deal with a late rental payment. Whether your tenant is forgetful, broke, or dishonest will affect how you handle the situation. But no matter what, you can ultimately ensure that you get your income, and keep your units occupied with honest, responsible tenants.