Every landlord’s worst nightmare is a bad tenant. You have probably heard the many stories of landlords losing thousands to non-paying tenants who refuse to move. In Ontario, the likelihood that you'll encounter bad tenants is even higher as you're unable to “discriminate” against tenants even when you’ve screened them. The result is usually a luck-of-the-draw which can invite non-paying tenants, tenants that destroy property, or even tenants that disrupt neighbours. What happens when you select these tenants, and how do you deal with them? AntsLabor explores that question.
Open The Lines of Communication
The first step to deal with bad tenants is to communicate at the first signs of trouble. Don’t allow a tenant to talk their way out of what are red flags. If they’re not paying or disrupting neighbours, now is the time to find out if they’ve done this before.
However, to ensure you’re not unfairly discriminating against a generally good tenant, be sure to speak to the tenant first about your grievances to see if they'll respond in kind, then follow up.
2. Come To An Agreement
The purpose of opening the lines of communication is to reach an amicable resolution with the tenant. As a landlord or property manager, you probably don’t want to upset tenants who could become spiteful. Rather, work alongside the tenant to develop a reasonable resolution. In case you have to go to the LTB, be sure you get any agreements in writing – email would be best – so tenants cannot pretend they were ignorant of the resolution.
3. Enforce The Rules
If at this stage, the tenant has not rectified their behavior, begin enforcing rules. If a tenant is a bad apple, they won’t amend their behavior for long. Most truly despicable tenants will maintain the facade of wanting to reform for a short period. At the first sign, the tenant displays behavior discussed when you first brought up the complaint, be sure to file the necessary documentation. If you delay filing any notice, you are essentially giving the tenant more time to delay payments or disrupt other tenants or even escalate their behavior.
To ensure you can get rid of the tenant, be sure you are filing the correct notice. The N4 is if your tenant hasn't paid rent, the N5 if the tenant is disturbing others, and the N6 if your tenant is doing something illegal.
4. Know When To Step Aside
Unfortunately, not every bad tenant situation will succeed. There are times when you will need to know when to cut your losses. If you have spent more money on legal fees trying to recoup monies, chalk that up as a loss and decide to move on instead of pouring more money into getting the tenant to repay you. Most career-bad tenants are also unlikely going to pay back any money they owe. You can also take it a step further by reporting the behavior.
But, possibly the best way to deal with a bad tenant, in our experience at AntsLabor, is to never allow one to reside in your property in the first place. You should always conduct background checks, credit checks, and criminal record checks before signing a lease. Even though the cost of these checks may seem exorbitant, the revenue you’ll lose either as a result of damages will be greater.
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