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Notice Period for Non-Payment of Rent – Residential vs. Commercial Tenancies Act

September 29, 2015

A lot of confusion exists regarding Landlord and Tenant rights especially when it comes to notice of eviction for non-payment of rent. Part of this confusion comes from the fact that the rules that govern residential landlords and tenants are different from commercial landlords and tenants.

Residential Tenancies Act

S. 59 of the Residential Tenancies Act 2006, SO 2006, c 17 states:

If a tenant fails to pay rent lawfully owing under a tenancy agreement, the landlord may give the tenant notice of termination of the tenancy effective not earlier than,

(a) the 7th day after the notice is given, in the case of a daily or weekly tenancy; and

(b) the 14th day after the notice is given, in all other cases.

Therefore, when a residential tenant has failed to pay the rent, the landlord must give notice to evict. If you need guidance about the nuances of the rental agreement and related contracts, contact some of the best civil lawyers in Toronto for expert legal advice on contract law.

Evicting Your Tenant

The landlord must fill out a form N4–which is a Notice of Termination for Non-Payment of Rent. This form gives the tenant 14 days to pay the rent. If the tenant pays the outstanding rent during this time, the N4 is void. If the tenant fails to pay the rent within the 14 day period, the landlord may fill out an application (form L1) and file it with the Landlord & Tenant Board along with a copy of the N4 and a certificate of service.

Once the L1 has been filed, the Landlord will receive a Notice of Hearing and an issued copy of the application (usually within 1-3 weeks). On the hearing date the Landlord must attend and prove that rent is outstanding. Assuming the above has been done correctly, the Board may order immediate eviction but in many cases the Board will give the tenant additional time to pay the outstanding rent (plus the application fee).

If the Board orders the eviction or if the tenant fails to pay the outstanding amount in the prescribed time (set out in the Board’s Order) on the next day the landlord may enforce the order through the Sheriff’s office. Often the Sheriff will give an additional notice period to the tenant before the locks are changed.

If at any time during this process, the outstanding amount is paid (plus the application fee after the hearing and the Sheriff’s fee after enforcement has been initiated) the eviction Order is void.

As you can see, to evict for non payment of rent in a residential tenancy requires 14 days notice and can often take 3-6 weeks to complete assuming every step as been properly completed.

Commercial Tenancies Act

According to the Commercial Tenancies Act R.S.O. 1990, c. L.7, when a commercial tenant has failed to pay the rent, the landlord has two options available:

1. Change the locks (s. 18); OR
2. Seize and dispose of a tenant’s property (s. 53)

However, these steps cannot be exercised indiscriminately, certain rules apply.

A landlord may change the locks and evict without notice on the 16th day after the day rent was due. If this occurs, the landlord should allow tenants reasonable access to the rental unit to remove their property.

If instead, a landlord decides to seize and dispose of a tenant’s property no notice is required in advance of seizing the tenant’s property but notice is required to notify the tenant of the distress and the sum of monies required to cure the default before proceeding to sell the seized property.

This is called the right of distraint. Distraint is defined as “the right of a landlord to seize the property of a tenant which is in the premises being rented, as collateral against a tenant that has not paid the rent or has otherwise defaulted on the lease, such as wanton disrepair or destruction of the premises.”

However, before disposing of the seized property, the landlord must hold it for five days. If the tenant makes the proper payment in this five-day period, the landlord is not permitted to sell the tenant’s property.

Furthermore, S. 53 of the Act states that before a sale of the distrained property can be completed, two appraisals of the property must be completed by appraisers who shall first be sworn to appraise them truly, according to the best of their understandings, a memorandum of which oath is to be endorsed on the inventory.

After such appraisement, the landlord may lawfully sell the property for the best price possible towards satisfaction of the rent for which they were seized. Any surplus must be reimbursed to the tenant on demand.

Robert Karrass is a partner at Morton Karrass LLP and specializes in the areas of criminal law, administrative/regulatory law, and appeals.

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