Landlord's Nightmare Story - Rent-Free Tenant in Ontario, Canada

See how a fellow investor/landlord's tenant was living at his home almost rent-free for over a year in the Toronto area of Ontario, Canada - LEGALLY! He hasn't paid around $14,000 in total rent to the landlords and took off. They weren't able to evict him until he decided to leave. At this point, the money still has not been recovered - they'll be hiring an investigator down the road after COVID cools down.

Quick Note For Americans (from USA)

It seems US landlords can evict tenants pretty quickly after not paying rent (except during COVID). Things work differently in Canada. For us Canadians, it can take up to a year (sometimes longer if the tenant knows the system) to evict a non-paying or late-paying tenant without any consequence to the tenant.

You'll see how as I tell you this you story.

The Tale

This landlord listed the home they owned for lease in the Toronto area. People were slowly looking at the home, but no bites, no applications.

Landlord not expecting a long vacancy, and got desperate. In comes a "gentleman" in a suit, ready to pay a deposit. The landlord thought he seemed decent, well-groomed, well-mannered, and he even worked at a financial institution, making well enough to pay for rent.

There were a few red flags the landlord decided to overlook  -  for example, tenant didn't want to give him a copy of his credit report, which is standard to give in Southern Ontario.

The deposit was given, lease was signed.

Fast-forward to 2 months into the lease.

Tenant: "my rent will be a bit late this month" (paraphrasing long convos)

LL (landlord): "ok no worries, just pay as soon as you can".
The landlord is thinking..."2 months in, already late?"

A week later, the LL asks: "are you able to pay rent? We'll have to give notice of eviction"

Tenant: "I understand, you'll get it soon"

A few days later, the tenant sends the rent.

The LL sighs in relief, thinking it was just a fluke.

Next Month

It's a few days into the month, and rent is late.

LL: "where is the rent?"

Tenant: "sorry, it's late, I'm waiting for my divorce settlement"

LL is thinking, "why are you waiting for that when you have a job?"

LL "we will be sending an  N4 notice just for our own protection as standard procedure"

Tenant "of course, no worries!"

Quick Note - What is an N4?

It's called a "notice to end your tenancy {after you've drained me dry and I can no longer pay my mortgage}", but in reality, it's just a form you give to the tenant to pay or in 14 days we'll have to put in an application to the Landlord and Tenant Board to dispute this (which realistically happens in 2 or more months). If they pay within these 14 days, nothing happens.

[moving back to story]

He ends up paying again, but about 3 weeks later or so.

The LL realizes he's screwed and realizes that there's no way to evict this tenant - no family member has to move in there and the tenant is not looking to move out.

While walking back to his car after giving the N4 notice to the tenant, the Landlord notices the tenant's car - an older Chevrolet Malibu with a cracked window. Worth about $5000 CAD tops in the condition it was in. Keep this in mind for later in the story.

3rd and 4th month

At this point, payments are really delayed. The tenant was offered to move out and even to be allowed to keep the last month's rent, but the tenant instead starts to go crazy and offended, because he can "afford much more rent than this, and is insulted that it is suggested that he can't afford this home".

There's only so much you can say to this tenant without risking irritating them to the point that they destroy the place, and won't have to pay you a penny after leaving the home. Lawsuits are very costly here, and as soon as the tenant would give sob stories, he's let off the hook. That's just money down the drain. Have to keep your cool.

I'm there to help with this situation. We're finally set a date for the Landlord and Tenant Board. We show up, wait all morning for our turn. The tenant doesn't bother to show up.

"Perfect" we think, this helps our case.

We think this will get us the eviction order that we need. Well guess what they get in the mail a few weeks later? "It's been rescheduled because the tenant had some health issues". Right…we heard him through the door, laughing and talking loudly as usual, when we were there to serve one of the notices.

5th and 6th Month

At this point, the tenant is already behind on multiple payments. When meeting at the rescheduled Landlord and Tenant Board meeting, we were denied eviction because there was one slight number off in the form that we were asked to fill out - in the date… the day the notice was given was wrong by a few days. Explaining didn't help… they basically told us to screw off even though we had proof what the correct date was.

Fast forward to 1.5 months later - we were able to get a date at the Board, and the Mediator tried to "strongly encourage" us to work it out with a her instead of taking the case to the Board Member (i.e. talk it out to have the mediator let the tenant pay his dues off in time, or waive what he owes).

No way! We want to dispute this with a Board Member. We ended up with a very pro-tenant member, who didn't want to hear the Landlord's side of the story, and empathized with the tenant who gave his sob stories about not being able to pay rent. What happened to being able to afford much higher rent than this?

The Landlord politely brought up the statement "we'd love to help the tenant, but it does not seem the tenant can afford this home and we cannot afford to be a charity". The word "Charity" set this Board Member and Mediator off, which led them to interrupting the Landlord and commanding "I don't want to hear this."

Unfortunately the Board Member's decision was what the mediator's would have been - to allow the tenant continue making regular rent payments on time, and slowly pay off his dues over the next 6-12 months. If he made one more late payment, the Landlord would have grounds to evict the tenant, without the tenant being able to dispute this.

The Landlord repeated what the Board Member said, and asked "are you sure we will be able to evict without issues upon the first late payment?", to which the Member replied "Yes".

7th, 8th and 9th Month

Next month comes, still no rent payment. "He can finally be evicted". He's months behind on rent at this point.

You can probably predict what's going to happen at this point. We book a sheriff to evict the tenant (has to be done here in Ontario, can't do it yourself), and the day before the eviction, the Landlord gets mail from the Board, stating that the tenant has put something called a "stay" on the order.

I thought the tenant cannot dispute this, he didn't even pay anything? We clarified that with the Board that was the one that gave the order?

At another hearing again - we bring up that the previous Member said there wouldn't be issues evicting upon first late payment. Nope, they don't care. They have recordings of these Landlord Tenant Board hearings, but we "normies" are legally not allowed to record anything, even with a voice recorder. Even if the Landlord was able to give them a recording, they would wave us off.

The tenant spews some more nonsense about not paying on time. Keep in mind that he's a very different character at these hearings. Kind, scared, worried. And then talking to the landlord: arrogant, agitated, doesn't reply for days or weeks until he gets annoyed of the follow-ups.

The Board Member, once again, comes up with a payment plan. When asked how this helps with all the late mortgage payment and penalties that the landlord faces, the Board Member shrugged her shoulders and smiled.

Okay…"what about evicting the tenant for all the previous late payments?" In Ontario, you're able to possibly evict a tenant after multiple late payments (or so they say). "That's a completely different application and process that you'll have to go through". It's a completely new process and would potentially void all the attempts to evict for non-payment by the tenant.

We're walking back to our cars after this hearing, and see the tenant walking to his car. Remember the car I previous said he had? Well now it's a brand new Chevrolet Impala. Worth? At that time, even if it was slightly used, about $25,000 CAD. He owes the Landlord more than half that amount in rents at this point.

A Few Months Later

I won't bore you with the repetitive procedure that the Landlords had to go through, but the tenant seems to have sensed that he was probably on his last thin thread, after milking this for over a year, and finally left after about 15 months, I believe. Over $14,000 in rent owed.

Avoiding This

Could this have been avoided? Nothing is 100%, but the likelihood of this happening definitely could have been minimized, yes - with proper tenant screening.

I'll be making a video on how to properly screen a tenant, so definitely subscribe by going to my channel: https://www.youtube.com/channel/UCndmYcxO6FmO4BHn4oFIJFw. You must have an experience or know someone that has experienced an interesting landlord or tenant story - I'd love to hear it in the comments! 

Share this article

Leave a comment

Your email address will not be published. Required fields are marked *

Top