Landlords Forced to Pay Off Deadbeat Tenant

by Chris on March 2, 2020

When confronted by his landlords for bouncing his first rent cheque, an Ontario tenant informed the couple that he and his family intended to stay in the home — rent-free — for as long as it took the landlords to obtain an eviction order.

According to a news report, the first-time landlords sought legal advice and discovered that, due to systemic delays at the Ontario Landlord and Tenant Board, they were facing a minimum of four months until a hearing, assuming no continuances or appeals. Next steps, like receiving a signed order and serving it on the tenant, could take several more weeks. Even then, they probably would not recover the overdue rent without going through a separate court proceeding.

With mortgage payments due and ongoing damage to the property, the landlords felt compelled to offer “cash for keys”, a strategy to buy out the tenant’s lease and recover the property sooner. The landlords paid the tenant’s moving expenses and delinquent water bill and returned rent deposits in exchange for an agreement to terminate the lease. The landlords stopped the bleeding, and the tenant moved on.

Kayla Andrade with Ontario Landlords Watch has a great suggestion to alleviate eviction delays: an express lane for tenants who are not paying rent. According to Ontario statistics, nonpayment of rent is the number one reason landlords file claims. For instance, during the 2018-2019 reporting period, 62% or 46,043 landlord claims were filed to evict tenants who were not paying. Nonpayment cases are not complicated, so it should be easy to train officers and process these claims in a reasonable amount of time.

Ontario is not the only province where eviction delays or unbalanced rental regulations place landlords at higher risk for income loss. Landlords, even first-timers, must take advantage of the tools at their disposal.

One such tool is to report rent payments to a credit bureau. Tenants may be smug about waiting out eviction delays, but they also will be hurting themselves by going months without paying rent. If the default is being reported each month, that can translate into bad credit. The tenant may not pass the next background check or qualify for a loan when they need it. Reporting rent payments provides consequences for deadbeat tenants who otherwise get away with it.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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