There is no end in sight for the COVID-19 “Eviction Moratorium” and as a result, the LTB is not even processing the applications for combined termination/rent arrears/eviction. This means that even when the moratorium is lifted, there will be a huge backlog of cases to be processed. At this point we cannot even guess at when the LTB may start processing these applications, but landlords should plan, optimistically, for late summer or early fall, at a minimum. Alternatively, based on statements from the court below, the moratorium could remain in effect throughout the entire life of the pandemic.
The only termination applications that are moving forward are those based on bad tenant (or occupant/guest) conduct where there are ongoing concerns about people’s health and safety. In such cases (and likely so that the LTB won’t be sued for failing to process applications in the face of a clear risk of harm to people) the LTB has provided a mechanism for proceeding with an “urgent motion”. So far, the courts and the LTB have stated that “unfairness” of the moratorium or seriously financial prejudice to the landlord caused by tenants’ failure or refusal to pay rent is irrelevant.
Landlords should inform themselves of the underlying reasons why the moratorium is in effect. The Courts, not the LTB, are responsible for imposing the Eviction Moratorium. The Ontario Divisional Court (decisions of which are binding on LTB Members) has identified the following principles and policy rationales for the moratorium and the basis for whether an urgent motion to evict a tenant should proceed (we have underlined some key phrases):
a) the intent of the Eviction Moratorium is to prevent evictions during the pandemic even though it could be expected to cause significant economic disruption and adverse financial effects. Thus, evidence of significant economic hardship to the landlord and resulting unfairness, viewed conventionally, will not by itself support an order that an eviction proceed;
b) the interests served by the Eviction Moratorium are societal and directed towards the maintenance of existing shelter arrangements for individuals to assist in preventing the spread of COVID-19 during the pandemic;
c) the Eviction Moratorium is not restricted to tenants who would otherwise be evicted for non-payment of rent in order to protect those who have lost income due to COVID-19 but applies to all evictions without limitation;
d) on a motion to permit an eviction to proceed notwithstanding the Eviction Moratorium, the onus is on the landlord, as the moving party, to establish the existence of truly urgent and compelling circumstances which would justify overriding the societal interest that persons continue to shelter in place in order to prevent the spread of COVID-19, in the particular circumstances of the case;
e) although the categories of urgent and compelling circumstances which may justify an order permitting an eviction to proceed are not closed, ordinarily they will involve illegal acts by the tenant or threats to health caused by the tenant; and
f) a balancing of the concerns of the tenant and the landlord will be carried out primarily in the context of the societal objectives of the Eviction Moratorium directed towards the prevention of the spread of COVID-19 rather than focusing on economic disruption or economic hardship to the landlord, or conventional understandings of unfairness from a financial perspective.
So, while the grounds for obtaining and enforcing an eviction application at this time are not absolutely “closed”, it is pretty clear from the principles set out by the Divisional Court above, that financial hardship or “unfairness” to the landlord, or even to other tenants, will not justify the granting of an urgent motion and issuance of an eviction order. The result is that landlords who otherwise have every right and financial necessity to evict a tenant won’t be able to do so for the indefinite future and will have to find other ways to try to mitigate their losses.
In the case of rent arrears, as is set out in our related Bulletin an application for “rent arrears only” (L9s) will be processed by the LTB and is worth pursuing if there are credible grounds to support a conclusion that the landlord will be able to enforce the judgment. If arrears are applied for together with a termination/eviction application, as is the usual case, the LTB will do nothing.
Another mitigation option is to “pay off” the tenant in exchange for the tenant giving vacant possession, which is an option that may be more cost effective where vacant possession is required for an incoming purchaser of a small, personally held rental property or in the context of a “landlord’s own use” application (although, in our view, if the incoming occupant is a “caregiver” for the landlord who also lives in the personally held rental unit, an urgent motion for eviction may succeed based on the principles above). Agreeing to waive rent arrears and paying a tenant’s moving costs etc. in exchange for vacant possession may also be more cost effective rather than watching the arrears accrue indefinitely, only to become part of a massive backlog if and when the eviction moratorium is lifted. In all such cases of mitigation, landlords have to be careful to structure the agreement in such a way that money (or most of it) is not paid until vacant possession is given, otherwise a landlord will still have no remedy if the tenant takes the benefit of the agreement but still refuses to move. Landlords with judgments in hand can expect that there will be a large number of personal bankruptcies by year end or in early 2021 which is just one more factor to consider in trying to cut your losses.
A link to an excellent court case summarizing many of the eviction “urgent motion” principles and cases can be found here: https://www.canlii.org/en/on/onsc/doc/2020/2020onsc3754/2020onsc3754.html
Questions about urgent motions or mitigation options? firstname.lastname@example.org
LANDLORD TENANT BOARD APPLICATION FEES INCREASE
The Social Justice Tribunal Ontario has announced that the fee increase, initially proposed for earlier this year, will be effective on July 1, 2020. Most Landlord Tenant Board application filing fees are increasing by 6%. The L1, L9, and L2 applications are $201 ($186 for e-filing) and AGI applications are now $233. A chart setting out all the new fees can be found here.