Should I sign a rent repayment plan?
With Doug Ford's Bill 184 expected to pass, there are some things tenants should consider to avoid eviction
Q: I was unable to pay rent for a few months during the pandemic. Now, my landlord is asking me to agree to a repayment plan. Should I do it?
This a complicated question, and it’s getting more complicated by the day.
When a tenant came to landlord/tenant lawyer Caryma Sa’d with a question about repayment plans in the past, she would usually tell them they didn’t have to sign a repayment agreement. But everything has been complicated by Bill 184, the Ontario government’s proposed set of amendments to the 2006 Residential Tenancies Act.
Now, she says, tenants must tread more carefully. You don’t want to get evicted, especially during a pandemic.
Bill 184, titled the Protecting Tenants and Strengthening Communities Housing Act, is a divisive bit of legislature that the NDP and housing activist groups like ACORN, Keep Your Rent and the Advocacy Centre for Tenants Ontario have taken to calling Doug Ford’s mass eviction bill.
There have been protests and petitions against the legislation, which housing advocates worry will put many renters on the street without a proper hearing – especially since the Ontario ban on residential evictions will end when the state of emergency ends.
“When [Bill 184] was first proposed in March, it was bad,” says Geordie Dent, executive director of the Federation of Metro Tenants’ Associations. “But now we’re facing the worst eviction crisis in Ontario history. We should want to keep people housed, not throw them out on the street faster.”
The major changes are increased fines when landlords terminate a tenancy in bad faith, including renovictions. In a statement, the minister of Municipal Affairs and Housing’s communications director Julie O’Driscoll says the amendments are meant to “strengthen” protections for tenants.
But one of the major sticking points is how repayment agreements are handled.
Repayment plans and Bill 184
Currently, a tenant is entitled to a hearing at the Landlord and Tenant Board before an eviction. But if Bill 184 passes, as it seems likely to do, landlords will be able to enforce payment plans that were signed out of court.
Sa’d explains a landlord could theoretically obtain an ex parte eviction order, meaning an order without a hearing, “if they were even a day late or a dollar short.” The bill doesn’t allow evictions without an order, but it does simplify and fast-track the process of obtaining one.
If such an order is issued, Sa’d continues, “tenants only have 10 days to file a ‘motion to set aside,’ which gives them an opportunity to explain their side of the situation at a hearing.”
The burden of explaining and justifying the circumstances for missing a payment would fall on the tenant. The notice will arrive in the mail, so Sa’d advises tenants to regularly check their mailboxes. Even though a repayment agreement could potentially be lopsided, you could still be evicted without a hearing for not following it to the letter to the cent, Sa’d says.
It is possible that negotiating a repayment agreement could be favourable for both the tenant and the landlord. Critics say removing the checks and balances of a legal mediator just widens that divide. The purpose of the amendment is to keep cases out of backlogged Landlord and Tenant Board courts, but the move is more likely to put tenants at a disadvantage than landlords.
“To be clear, tenants are NOT required to sign repayment plans, but it may be advisable to at least entertain the discussion,” says Sa’d. “Otherwise there’s a risk the landlord will argue the tenant was not acting in good faith.”
To sign or not to sign?
Part of the new process, which is designed to keep cases out of the court, means that if a dispute ends up before the board, it would be required to consider whether the landlord attempted to negotiate a repayment plan. If it was determined the tenant refused, you could conceivably be hit with a harsher penalty – including eviction.
If you are entertaining a plan, Sa’d advises asking for a copy of the agreement in writing and seek a legal opinion.
“Tenants should resist succumbing to pressure to sign anything they cannot reasonably commit to, since the consequences of missing a payment can be severe,” she says. “Tenants should try to negotiate a grace period within the repayment plan to provide some leeway, and request a clause that requires the landlord to contact them prior to filing for an eviction order so they have the benefit of some notice.” If it’s unfavourable, you don’t have to sign it.
“Landlords cannot impose repayment agreements on tenants, and tenants cannot be evicted on the grounds of refusing a rent repayment plan,” says O’Driscoll. “It has always been an offence, and completely unacceptable, for a landlord to harass or threaten a tenant with eviction without due process.”
A tenant has 30 days to dispute an agreement if they believe they were forced into signing it.
The definitions of “harassment” and “forced” are up for debate. Given the power imbalance, a tenant could easily feel threatened to sign it or else risk eviction.
Dent worries the damage is already done. Bill 184, if it passes, will be retroactive to March, at the beginning of the shutdown. Many tenants have already been offered repayment agreements and refused. Many did not sign due to lack of funds, were scared of dealing with the landlord or were participating in a rent strike or other collective action.
They might have even have talked to a lawyer. “It could be that all the legal advice people have gotten over the last three months will be made bad,” he says. If those cases go to court, will the tenants be deemed to have been acting in bad faith?
Even if Bill 184 passes, legislation is still just legislation. It will be up to the courts to decide how it will be interpreted and enforced. In the meantime, there’s a lot of uncertainty during an already uncertain time.
About Resident Expert
Resident Expert is a column about renting, buying and owning in the city. Send your queries to realestate (at) nowtoronto.com. NOW writers will talk to relevant experts to get the answers. Letter writers will remain anonymous. Read previous columns here.
This column is not legal advice. You should not act or rely on the information provided. To ensure your interests are protected, retain or formally seek advice from a lawyer.