Real Estate

When does landlord pay the 1 month's rent after serving N12 form?

  • Last Updated:
  • Sep 1st, 2019 1:38 pm
[OP]
Newbie
Aug 18, 2016
10 posts

When does landlord pay the 1 month's rent after serving N12 form?

Hello there,
My son is 20 now and he wants to move out so instead of having him pay these crazy GTA rental prices he has agreed to live in my rental unit. I spoke to the tenants about this to try and get them to agree to move out without any forms but they were very unhappy and stated that they are not going anywhere. I will be serving them the N12 form soon and I know that I have to pay them 1 month's rent. Does anyone have experience with such forms? When do I pay them the rent? Do I wait until they actually move out (highly unlikely) or do I just pay it whenever within the 60 day time frame?
Thank you.
14 replies
Jr. Member
May 17, 2018
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turbro21 wrote: Hello there,
My son is 20 now and he wants to move out so instead of having him pay these crazy GTA rental prices he has agreed to live in my rental unit. I spoke to the tenants about this to try and get them to agree to move out without any forms but they were very unhappy and stated that they are not going anywhere. I will be serving them the N12 form soon and I know that I have to pay them 1 month's rent. Does anyone have experience with such forms? When do I pay them the rent? Do I wait until they actually move out (highly unlikely) or do I just pay it whenever within the 60 day time frame?
Thank you.

IIRC, you MUST pay them at the same time as giving them the N12.

Honestly, I’d suggest paying them more than one month. Expect a lawyer, or paralegal to contact you if you give them the form.

As a tenant, if you asked me without forms, I would refuse as well. Because if we agree, we wouldn’t get a months (or more) payment.

Don’t forget you also should have their last months rent.

Most landlords from the legal advise I’ve gotten, end up paying 3 months to encourage tenants to leave.

Just remember, with that form, you can’t re-rent or sell the property for 12 months after they do leave
Deal Guru
Feb 29, 2008
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I'm curious. Are the tenants month to month or are they in the 1st year of the lease?
Banned
Aug 28, 2019
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Neither the form nor Section 48.2 of the RTA seem to specify when exactly you should pay so as long it’s before the termination date it should be ok. As the tenants can move out before the termination date, it would be wise to pay them sooner than later.

Since your tenants seem resistant to moving out, I suggest you book the hearing at the LTB right after you serve them the notice to save time in the potential eviction process. Also don’t forget to get an affidavit from your son stating that he intends to move in and live there for at least 1 year to bring to the hearing.
Deal Fanatic
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Sep 8, 2007
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Way Out of GTA
If they are unhappy about the move, then to protect yourself I’d pay it via certified cheque on the date of vacancy when they turn over the keys.

Lol at the clown suggesting pay them 3 months. But given this thread it’s no surprise it’s coming from a renter.

landlord-sold-house-new-owner-keeping-u ... y-2305349/
Deal Addict
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Jan 2, 2012
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turbro21 wrote: Hello there,
My son is 20 now and he wants to move out so instead of having him pay these crazy GTA rental prices he has agreed to live in my rental unit. I spoke to the tenants about this to try and get them to agree to move out without any forms but they were very unhappy and stated that they are not going anywhere. I will be serving them the N12 form soon and I know that I have to pay them 1 month's rent. Does anyone have experience with such forms? When do I pay them the rent? Do I wait until they actually move out (highly unlikely) or do I just pay it whenever within the 60 day time frame?
Thank you.
ACcording to this, anytime before end of tenancy is fine: https://landlordselfhelp.com/new-rules- ... s-own-use/
What is compensation and when must it be paid?
Section 48.1 of the RTA requires that compensation equal to one month’s rent be paid to the tenant prior to the termination date specified on the N12 notice. Landlords may file an application with the LTB to obtain an order terminating the tenancy pursuant to the notice prior to the termination date. Landlords are encouraged to file their L2 application prior to the termination date to ensure the payment of compensation to the tenant becomes part of the LTB order.


You can only serve an N12 if the tenant is on month-to-month, you can't do if in a fixed term lease agreement [edit: unless lease ends by eviction effective date]. You should never try to "work it out without forms" to get a tenant to move, you should ALWAYS use proper RTA forms. Without forms, they could simply decide not to move on the last possible day and there would be nothing you could do about it and would have to start official eviction process from scratch.

You should not pay more than 1 months rent. The tenant may fight the eviction and accuse you of bad faith, but really they are just delaying the inevitable.

Also note you are not allowed to collect rent from your son, nor can you rent the unit to someone else within 12 months of the eviction.
Last edited by rob444 on Aug 31st, 2019 9:02 am, edited 1 time in total.
Banned
Aug 28, 2019
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You can give out a N12 if they are on a fixed term lease however the termination date can’t be earlier than the date the lease ends.
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faridf wrote: You can give out a N12 if they are on a fixed term lease however the termination date can’t be earlier than the date the lease ends.
Yes I misstated it above, was actually coming back to edit my post and saw you had already clarified :)
Deal Guru
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Mar 23, 2008
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faridf wrote: Neither the form nor Section 48.2 of the RTA seem to specify when exactly you should pay so as long it’s before the termination date it should be ok. As the tenants can move out before the termination date, it would be wise to pay them sooner than later.

Since your tenants seem resistant to moving out, I suggest you book the hearing at the LTB right after you serve them the notice to save time in the potential eviction process. Also don’t forget to get an affidavit from your son stating that he intends to move in and live there for at least 1 year to bring to the hearing.
I think you need to pay them before filing for the hearing.

C
Banned
Aug 28, 2019
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CNeufeld wrote: I think you need to pay them before filing for the hearing.

C
It’s part of the L2 application you would need to file to get a hearing.
[OP]
Newbie
Aug 18, 2016
10 posts
Thank you, this is very helpful. Shame I can't charge my son rent, I was planning on charging him just enough to cover the taxes and utilities. I'm sure I'll figure something out.
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turbro21 wrote: Thank you, this is very helpful. Shame I can't charge my son rent, I was planning on charging him just enough to cover the taxes and utilities. I'm sure I'll figure something out.
There’s no law about gifts, especially between relatives. You’ve got nothing to worry about.

C
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Jan 2, 2012
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turbro21 wrote: Thank you, this is very helpful. Shame I can't charge my son rent, I was planning on charging him just enough to cover the taxes and utilities. I'm sure I'll figure something out.
Charging a family member rent wouldn't align with using the property for "personal use".

However I really don't know where the line is drawn between "rent" and having a family member helping contribute to expenses of the unit. I couldn't see any rules in the RTA about these details.

My guess is that if he lives there and pays you anything monthly, technically you should be claiming this as rental income and including in your taxes. To not claim it would technically be tax fraud, but doing so may violate the "personal use" rule you used to evict the tenant, so could be used against you in any "bad faith" accusation that comes up later on. The current tenant though would have zero way of knowing your personal financial details between you and your son, or how you file your taxes. so would they bother to go after you to the LTB? I would guess not and they will just go on with their lives, but who knows.

Again just my guess, you may want to ask a lawyer experienced with this kind of thing before working out a payment agreement with your son.
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CNeufeld wrote: There’s no law about gifts, especially between relatives. You’ve got nothing to worry about.

C
So hypothetically if you had a rental property and were renting to a family member at market value, could you simply state the rent was a "gift" and avoid paying all taxes on rental income?

I think there's a line between gift and income, so just need to make sure it's all within guidelines/accepted practices in case you were ever audited by the CRA.

In this case having the son make sporadic cash payments to the dad randomly over the year that happened to add up to the amount needed, instead of regular scheduled ones monthly, would make it more of a "gift".
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As long as your son doesn't claim rental expenses on his tax return and you don't claim income from it consider him putting cash in your hand.
Problem solved.
Family should still be able to operate as family and leave the tax man and ltb out of it if your son is genuinely moving in for a year.

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