Your tenant owes you $4000.00 in rent. What do you do? Well, let’s rewind a little bit and I’ll explain how to avoid this situation. The first and most important step in being a landlord is screening your tenant applicants. This is where a property manager is your best ally. Screening your tenants properly not only tells you what their current and past situations are, but it lets your tenants know that you mean business and sending that message early on, can set you up for a better relationship for the duration of the tenancy. If you screen your tenants and see red flags, listen to your gut. If you feel sorry for the applicant, help them if you can but don’t make them your tenant!
Once you have screened your tenant thoroughly and feel confident that you have found a great candidate, set your expectations for rent payment clearly. Exceptions can me made, but not on a regular basis. If rent is late by even one day, have the N4 notice served on the tenant on the second day. If they pay, great! If they don’t, you have your first step covered early on.
Your accounting system or tenant ledger should always be up to date and accurate with exact dates when payments are made. This is very important because you may need that ledger of your tenant ends up at the Landlord & Tenant Board for an arrears hearing.
This brings me to the next step. If your tenant hasn’t paid the owing rent by the deadline on the N4, now is the time to contact a paralegal to get some advice or have her take on the task of filing the application to the Board for the arrears. A skilled and experienced paralegal will ask you for the N4 and your ledger and will be able to use those tools to set you up for success at the hearing. You can represent yourself at the Board or you can have a paralegal represent you. The choice is yours. It’s never too late to try and recover rent arrears and quite often your tenant will be agreeable to a payment plan that allows him or her to catch up over time. Being flexible but firm in those cases is often the key to getting the money owed to you and keeping your tenant in his home. The key to managing tenant rent payments is diligence. Property managers are a great asset in this area, taking the burden off of you and making sure your property remains a cash flowing investment.
