Collecting Arrears and Damages After a Tenant Vacates

As long as a tenant remains in possession of a property in Ontario, the Landlord and Tenant Board offers a fairly quick and informal method of collecting rent arrears or damages caused by the tenant’s willful or negligent conduct. Traditionally however once the tenant leaves the board no longer has jurisdiction and the landlord must resort to the Small Claims Court to collect, which can take significantly longer.

While this process has been in place in Ontario for several decades it has recently been called into question by a series of Small Claims Court decisions. In several cases which took place in Kitchener Ontario courts have dismissed the landlord's claims on the basis that the damages were discoverable before the tenant left. Accordingly, the Court held that the landlord was obligated to apply to the board to collect the monies while the tenant was still in possession and could not later apply to the Court after the tenant vacated.

Perhaps more distressing and of particular note is the recent Divisional Court decision in Kiselman v. Klerer, 2019 ONSC 6668 (CanLII) which was an appeal from a Small Claims Court judge sitting in Newmarket. In Kiselman the landlord commenced a claim in Small Claims Court some 11 months after the tenant vacated. There was no mention of whether or not the damages could have been discovered prior to the tenant leaving. The Court nevertheless held that the board had exclusive jurisdiction to deal with the landlord’s claim and dismissed the action on that basis. On appeal the Divisional Court upheld the motion Judge's decision stating that the Landlord and Tenant Board was the proper forum for the case.

The decision is problematic because if followed, it leaves landlords with absolutely no remedy to collect money owing after a tenant vacates the property. Take for example the situation where a landlord is owed several months rent and serves an eviction notice giving the tenant 14 days to pay. If the tenant vacates the property within the 14 days (during which time the landlord is unable to apply to the Board) the landlord would be unable to sue in the Courts and would have absolutely no remedy to collect the money owing. With the greatest of respect this appears to be a somewhat absurd result and inconsistent with the fundamental principle laid out in Ashby v. White (1703), 2 Ld. Raym. 938.

If the plaintiff has a right, he must of necessity have a means to vindicate and maintain it, and a remedy if he is injured in the exercise or enjoyment of it; and indeed it is a vain thing to imagine a right without a remedy; for want of right and want of remedy are reciprocal.

A closer review of the reasoning in Kiselman reveals several problematic aspects: For one thing the court initially cites the statute that requires the tenant to be in possession of the property for the landlord to apply to the board but then goes on to state that it makes no difference whether the tenant is in possession or not. In addition the court cites a number of cases dealing with applications by tenants after they had vacated the property. It does not appear to have been brought to the Court’s attention that tenants are permitted to file applications at the Board after they vacate while no similar provision exists for landlords.

Fortunately there is a wealth of authority from the same level of court for the proposition that the board has no jurisdiction to entertain a landlord's application after a tenant leaves and that the jurisdiction therefore lies with the Court.

The easiest way to avoid this controversy in the case of a tenant owes rent is to apply to the Board before the tenant leaves.

Video Commentary on Kiselman v. Klerer, 2019 ONSC 6668 (CanLII)

Residential tenancies in Ontario are a specialized administrative scheme that has developed over the course of decades and is subject to a set of insular rules and jurisprudence which can be problematic for Counsel not specializing in the field. Kiselman highlights the need for landlords faced with these disputes to ensure that their choice of Counsel is familiar with and experienced in dealing with this regulatory scheme.

© Allistair Trent, 2020