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I'm behind in my rent and my landlord offered me a repayment agreement. Should I sign it?

Question
I'm behind in my rent and my landlord offered me a repayment agreement. Should I sign it?

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I'm behind in my rent and my landlord offered me a repayment agreement. Should I sign it?
Reviewed: 
October 6, 2020
Answer

During the COVID-19 pandemic, some landlords have been asking tenants who haven't paid their rent to sign agreements about how they will pay it back.

The landlord might tell you that you will be evicted if you don't sign the agreement. But this is not true. A tenant only has to move out if the Landlord and Tenant Board (LTB) makes an eviction order.

If your landlord wants to evict you for owing rent, they must follow an eviction process that has several steps.

It's important for you to know where you are in the eviction process before you sign a repayment agreement.

Before your landlord applies to the LTB

To start the eviction process, your landlord must give you an N4: Notice to End your Tenancy Early for Non-payment of Rent with details about what you owe and when you must pay.

When you first get behind in your rent, your landlord might ask you to agree to a repayment schedule. This could be before or after they give you an N4 notice.

Usually the landlord doesn't offer any rent forgiveness — just more time to pay the full amount you owe. In return for the extra time, the landlord agrees that as long as you make the payments in full and on time, they won't take the next step and file an L1 application with the Landlord and Tenant Board (LTB). 

If you have money problems because of the COVID-19 emergency, it might help to talk to your landlord about it. But you don't have to sign an agreement if you don't think it's reasonable or you aren't sure you can make all the payments.

Your landlord might also ask you to sign another document agreeing to move out if you don't keep up with the repayment agreement. This document might be an N9: Tenant's Notice to End the Tenancy or an N11: Agreement to End the Tenancy. You should never sign anything like this, unless you're sure you want to move out.

If you don't sign anything and your landlord decides to apply to the LTB to evict you, you'll still have a chance to:

  • pay your rent,
  • negotiate a repayment agreement, or
  • ask the LTB to give you more time to pay.

After your landlord files an L1 application

If you don't pay by the deadline on the N4 notice, your landlord can apply to the LTB. The LTB or your landlord will send you:

Your landlord might suggest a repayment agreement after they take this step. You can also suggest a repayment agreement yourself, or an LTB mediator might suggest it.

Signing an agreement at this stage has serious risks that you need to know about.

Repayment agreements at this stage can include a term saying that if you miss a payment, your landlord can get an eviction order from the LTB without giving you a notice or a hearing.

Click here to see what the LTB's payment agreement form looks like and some things to be aware of. You don't have to use the LTB form. If you're thinking of signing a repayment agreement, you and your landlord can use this form instead.

Landlords usually want to include the term about eviction without a hearing but you don't have to agree. When you are negotiating a repayment agreement, you can tell your landlord that you don't want to include this term. Explain to your landlord that even without this term, they can still ask the LTB for an eviction order if you miss a payment. The difference is that you will get to have a hearing, you will get a notice about the hearing, and you will have a chance to explain your side to the LTB.

If your landlord insists on including the term, you don't have to sign the agreement. Usually you shouldn't sign unless you are very sure you'll be able to make all the payments in full and on time. If you are even one day late or one dollar short, your landlord will be able to get an order to evict you without giving you a notice or a hearing.

Your right to a hearing

Remember that if you don't sign a repayment agreement, you still have the right to a hearing. At the hearing, you can tell the LTB member your side and ask for time to pay off the rent you owe. If your money problems were caused by the COVID-19 pandemic, you can ask them to take that into account when deciding how much time you get to pay the rent, and whether you have to pay the landlord's legal costs.

A recent change to the law says that if any of your rent arrears happened on or after March 17, the LTB must consider whether your landlord tried to negotiate a repayment agreement with you. But the law doesn't say how the LTB should take that into account. If you didn't sign the agreement because you don't think your landlord's repayment plan was reasonable, you can explain this at the hearing.

Even if the LTB makes an eviction order, you will get one more chance to stop the eviction by paying everything you owe plus your landlord's legal filing fees.

Try to get advice from a lawyer or your local community legal clinic, before you sign any repayment agreement.

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