The COVID-19 Pandemic has unleashed havoc in many industries as a result of forced business closures and social distancing orders. The government and court have provided some guidance on how COVID-19 will impact residential leases, but still, there has been a lot of uncertainty for residential landlords and tenants. This article will focus on why it is important for residential landlords and tenants to work out if necessary, payment or deferral of rent.
One of the measures implemented by the Ontario Government to protect residential tenants was to stop residential evictions. Normally, if a landlord receives an eviction order, that landlord must use the Sheriff to evict the tenant. The government pays for the Sheriff and no one else may physically evict a tenant. Due to changes in the law stemming from COVID-19, the Sheriff will no longer evict residential tenants.
The Landlord and Tenant Board has also indicated that they will not order that a tenant be evicted until the COVID-19 pandemic is resolved. A number of residential tenants in Ontario have interpreted this to mean that they will not be required to pay rent, which is not the case. The changes in the law are to ensure that residential tenants have access to housing during the pandemic and are not evicted if they are economically impacted by COVID-19, for example if their employer was forced to close. The obligation to pay rent still exists. Instead of tenants refusing to pay rent and landlords demanding that rent be paid as usual, the most mutually beneficial solution will be for landlords and tenants to come to an agreement about deferring or reducing rent payments. Landlords who are required to keep on paying their bills, hydro and taxes, should communicate with tenants on their ability to pay rent and show compassion in these trying times. Some landlords and tenants have found creative solutions such as applying the last month’s rent that they hold to the rental obligation of tenants who have lost their job.
This pandemic will eventually be over and when it is, tenants will want to ensure that their rent is up to date to avoid the landlord taking action at that point in time. It is anticipated that when the pandemic is over, many tenants may seek different housing due to the strained relationships with their landlord caused by the pandemic. If this is the case, tenants may encounter difficulty finding housing. Tenants should be aware that landlords are likely to take one of three steps if rent is not paid during the pandemic. The first will be to accept that their tenants cannot pay rent during the pandemic. The second option will be to file materials with the Landlord and Tenant Board for payment of rent and to have the tenant evicted. What is likely to happen is that the Board will not deal with this matter until the future. Filing the materials now will ensure that when the Board resumes normal operations, the matter is already ahead in line. The third option will be for the landlord to sue the tenant for the repayment of rent, since a landlord is able to file a lawsuit online and knows where the tenant lives and can provide copy of the lawsuit to their tenant. With social distancing in place, it is possible for tenants to refuse to meet with their landlords for this purpose. Courts have recently suspended due dates so if the tenant does not file his or her defence to the lawsuit in 20 days, there is little that a landlord can do until the court reopens and due dates resume. Normally the landlord could ask for judgment against the tenant if the tenant does not defend.
While this will not be possible during the pandemic, if a landlord files their materials now, they will likely receive an order or judgment soon after the pandemic is over. Landlords and tenants should work together during the COVID-19 pandemic to ensure that they continue to maintain their relationships. The pandemic will likely economically impact many tenants and landlords for the worse. It is best that all parties to work together to overcome the challenges that the pandemic poses.