Agent K's Blog

What is a 'professional tenant'?

This is the label given to someone who is well versed on the Landlord Tenant laws and therefore uses this knowledge to take advantage of loopholes in the Ontario legal system. Renting to a professional tenant can cause you not only severe financial losses, but also frustration and headaches by having to navigate the legal system to try to remove this person from your rental property.

How do professional tenants exploit the system?

Some common ways include: illegal subletting, overpayment of the rent amount, or knowing the schedules and potential errors of using the Landlord Tenant system.

Illegal subletting:

Although the Residential Tenancy Act (RTA) advises that tenants do have a right to sublet their rented space with landlord approval, sometimes this will be taken to an extreme. Firstly, your tenant may sublet your property without obtaining your permission first, which is in contravention to the RTA. Your legal tenant is the person who signed your Residential Tenancy Agreement or rental lease, therefore it is only that person who you have a contract with.

In order to sidestep the law, your tenant may sublet your property to someone who does not recognize that your tenant is not the rightful owner. Therefore, your tenant may charge their subletter a higher rental rate than they are paying, hence make a profit for themselves through the use of your property without your knowledge. Your tenant may also pocket the rent paid to them by their subletter and not pass these monies on to you at all.

Therefore, if you do not receive your rent from your tenant, you may need to go through the eviction process to try to evict them. If they are savvy and intercept your served notices or communications, the subletter may not have any idea of being evicted until the day the Sheriff knocks on the front door. By this time, your tenant has long disappeared, and it may be extra difficult to remove the subletters from your unit because you do not technically have a legal contract with those people.

To prevent this possible scenario from happening, a landlord should always regularly 'check in' with the renters of their property by seeing them face-to-face at the location. You could advise that you are simply changing a furnace filter or checking smoke detectors, etc. By physically attending at your property on occasion, this will also give you an opportunity to see what state the property is in and to ensure no illegal activities may be going on.

Moving in extras:

Although your lease agreement may only be with one person and state that no other people are to reside there, a tenant may completely ignore this clause. If your property is all inclusive ofutilities like hydro or water, these bills may be doubled or tripled should your tenant move in extra family members or friends.

The RTA also states that it is illegal to advise a tenant that they are not permitted to have pets. The idea behind this law is that the pets themselves are not liable for any damage they may do, their owners are. As Ontario landlords are not permitted to charge an upfront damage deposit, you would need to request additional fees from your tenant for any damages done by pets upon their moving out of the space. In this case, if your tenant does not voluntarily pay you for any damages, you would also need to switch jurisdictions to the Small Claims Court to start a claim.

Rent overpayment:

Your renter may overpay their rent amount by cheque, stating that they simply made an administrative error. Then they contact you to give them back the overpaid amount before the cheque has cleared with their bank. Only when their cheque bounces do you realize you have been scammed.

This is now an old school tactic, as paying rent by cheque is antiquated. Technically, asking your tenant for post-dated cheques is technically illegal as per the RTA. However, common law has stated that this law can be over-ridden if all parties agree to use post-dated cheques for rental payment.

To prevent the situation of a tenant trying to scam funds through an overpayment to the landlord, it is a much better idea in the modern world to request your tenant pay their rent via automatic, pre-arranged e-transfer payments. Not only is this a fast, easy and reliable rent payment method, but then you both have a written record of payments in one place.

What if your tenant advises they do not have a bank account to pay via e-transfer? Then this is someone who you likely do not want to have as a tenant anyway. It is very rare in our modern Canadian society for someone to be paid exclusively in cash, therefore your tenant would need a bank account to receive their wages.

Knowing the intricacies of the Landlord Tenant system:

In Ontario, rental contracts are dictated by the Residential Tenancy Act (RTA) and enforced by the Ontario Landlord Tenant Board and Tribunal (LTB). If a landlord does not follow the rules exactly as provided to try to evict a tenant, this could cause further time delays for the action of the eviction to happen.

For example, one common mistake that is often made when completing an N4 form is when entering the dates of the lease. Remember, the dates you need to enter are the first date of the lease (when your tenants move in) to the last date (when they move out). Therefore, January 1 to December 31. Should you enter January 1 to January 1, your N4 form will be rejected by the LTB. This means that your corresponding Affidavit of Service that is attached to your initially filed N4 form is also rejected. You will therefore need to re-complete the form, re-serve the form and re-file the form.

After 14 days, if you have not received the late payment from your tenant, you can then complete, serve and file an L1 form, which advises the tenant that they are being evicted.

As a tenant will often state that they did not receive these forms, in order to delay the process, it is always a good idea to try to serve these forms in person to your tenant. This means that if you have an option, you should hand the forms directly to them in person rather than simply leaving them in the mailbox or pushing them under the door.

A landlord also needs to read and follow the directions on the LTB website exactly to ensure they are completing the proper forms. Again, should you file an incorrect form or not file a corresponding Affidavit of Service, this may cause further delay. For example, an L1 form is to evict a tenant during a lease agreement when they have not paid rent, whereas an L2 form is to end a tenancy when the duration of the lease is already over and rent has not been paid.

The LTB does offer helpful resources to landlords to assist with maneuvering properly through the legal system. Should you need to attend a hearing regarding your case, there is also duty Counsel (a free legal representative) on hand to assist you.

A professional tenant will rely on the ignorance and naivety of their landlord in order to stay occupying your unit as long as possible.

Current time delays:

Since the dreaded Covid time, the Landlord Tenant tribunal has been perpetually behind and you may not be scheduled in for a hearing until five months or more after you have served your tenant with an L1 notice of eviction. Even if a formal eviction order has been granted, it still may take an additional two or more months to get the Sheriff to action this eviction and physically try to get the tenant out.

At a very low average Ontario rental rate of $1200/month for a one-bedroom unit, this could mean a loss of over $9000, not to mention the extra costs of going further through the legal system to get the eviction or try to recoup monies for damages that the tenant may have done to your unit.

With the new 'digital-first initiative' started in November of 2020, all Ontario Landlord Tenant hearings are now held exclusively online through zoom or over the telephone. This has created an unfair platform for many tenants who may not be tech-savvy or may not have access to a computer or reliable telephone service. Therefore, professional tenants may use this argument to their advantage to deliberately delay a hearing. With an average of 60 cases scheduled to be dealt with within a 3 hour window by the Landlord Tenant Tribunal, a professional tenant may know that the Chairperson is looking for which cases can be moved to a different future date.

Partial payments:

If your tenant is perpetually late paying their rent or only makes a partial payment of rent, this does justify you filing an N or L form in order to request an eviction. However, should your renter pay up before the scheduled hearing, your case could be thrown out by the Tribunal. Then this process re-starts again. Likewise, even after an order has been made, if a tenant pays up some of the late rent owing, this could justify a re-prioritization for the Sheriff of where he attends to in order to action an eviction.

A professional tenant knows that by making partial payments or late payments, this could cause further time delays and add to the confusion of their case.

Wrong jurisdiction:

After a tenant has moved out of your property, but they caused damage or left personal items in the unit, the matter is no longer a case for the Landlord Tenant Board. Rather, you would need to file a case in Small Claims Court in order to try to get money out of your former tenant. Oftentimes, this is more of a headache than it is worth to chase, for several reasons.

Firstly, do you know where your previous tenant moved to? You would need their new address to serve them your Claim.

Secondly, should your previous tenant file a Defence against your Claim, it could take months to get the matter through the court system.

And thirdly, just because you may get a judgment against someone, does not mean that it is automatically enforced. You may need to hire a legal representative to assist you with the collection of this judgment, most likely through obtaining a wage garnishment. If they were renting from you previously, it is very unlikely that they would now own property to place a lien against.

Truthfully, you may never be able to collect on a judgment and it would just be a waste of your efforts and money to attempt enforcement.

Playing on your heart strings:

Just because a person is a skillful scammer, does not mean that they are not a genuinely nice person. They may be charismatic and you enjoy their company. They may persuade you with promises to pay that you honestly believe they will make. They may have health or family challenges that attract empathy. For example, although you are permitted to evict a tenant in the middle of winter, by human nature you or the Chairperson of the Landlord Tenant Tribunal may be reluctant to do so.

The word professional indicates that this person has been successful in scamming previous landlords into renting their property for free. If they have previously used a tactic that worked, why would they not try using the same tactic again?

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