Tenant wants to break lease and assign/sublet!

[RArora]

I was wondering if someone could help me with some advice with a predicament we have landed up with today.

I just received this in an email from our tenants here in Ottawa.

"Effective August 31/09, We are going to sublet your home as there is no other way that we can come up with the rent for the remainder of the lease until next June 2010."

this family has a 2 yr lease with us ending July 2010. they`ve been having problems with paying their full rent in time and have paid in installments many months.

I called L&T board and spoke to them and they were quite rude and unhelpful. They said that the tenant can break the lease by asking to sub-let/assign it to someone else. Their last month`s rent will be used towards the actual last month and not the last month of the lease that they had signed.

So they`ve effectively given 1.5 months notice (i dont know if writing this by email is considered notice in Ontario/Canada) and are saying they will find someone to move in Sept 1st.

What can I do here? Can I tell them we will employ a property management co. to find a tenant and they are responsible for their fees(1 month`s rent) , can I also tell them they should at least give 2 months notice hence they owe us about a half month`s rent if they leave aug 31st?

Should I let them find the tenant to sub/lease it to, or just allow them to leave on aug 31st and find a new tenant myself?


The appendix in the lease for them states that they would have to pay us $100 for admn cost in the event of a sub-let. But is this legally allowed in Ontario?

Your advice is greatly appreciated.

Thanks

Rasna

 

[rforgiel]

Rasna,

If a tenant wants to break the lease in our great province of Ontario the can and you need to do your best efforts to mitigate your damages, meaning finding a new tenant. They tenant will be held responsible for you finding a new tenant. Legally you can charge them for the lost rent and advertising until unit is occupied. Practically this is not always easy.

In one sense the tenant is being pushy in forcing someone else on you but on the other hand it may be nice of them that they have gone to the effort of finding you a new tenant. I hope your lease states you have the right to approve the person they are subleting to.

I was in this situation once and did an assignment of rent. This is like subleting but the original tenant is still on the hook should the new tenant not pay or damage things. It is a nice solution but here again should things go wrong, you do the traditional N4 and eviction process and then go after your original tenant for damages. Depending on their character and desire to keep their credit score clean it may be getting blood from a stone.

Don`t know if I answered your question. You need to determine the character of the original tenant and the person they are recommending to you and make a judgement call on how best to proceed.

 

[RArora]

thanks Ramon

I wonder if its just easier to let them out of the lease - allow the last month`s rent deposit to go towards their aug 09 rent and just look for a new tenant with a new lease then?

 

[invst4profit]

This situation should not be a surprise. The first time they did not make full payment of rent was a clear indication that this was likely coming and you should of, at that time, served them with a N4. We in Ontario do not have the luxury of charity toward tenants.
At this time it is clear they are leaving and you need to act fast to protect yourself.
First make it clear to them that they they are on the hook for the rent to the end of the agreed lease.
You should make the effort to find new tenants but do not release them from there responsibilities until YOU find a acceptable replacement.
If you find a replacement tenant do the paperwork to release them from the contract. If you do not find a replacement they must continue paying.
They will of coarse refuse but in that event you take them to small claims court( up to $10,000).
The process is very easy to navigate and you should win as the courts, unlike the LTB, recognise the legality of a contract.
The courts will garnish there wages.

As soon as they stop paying you also need to issue a N4 and go to the board to evict.
You may be out money upfront but with any luck this in the end should give you 3-4 months to find a replacement depending on the small claims court settlement.
Make sure you have all there ID information (SI#) place of employment etc.

Make a visit and document the condition of the house now with a video camera to use in court in the event they become destructive.

 

[RArora]

Greg, I called the L&T board asking for help and they said if they ask our permission to assign the lease we have 2 choices-say yes and let them find the tenant to sub`let/assign n the new one pays the rest of the rent or we refuse and then they can leave free with just a 30 day notice!!! no liability!? just because they offered to assign... this doesnt seem fair. what if we (they or us) cant find a tenant - good tenant- to move in 1st Sept-they`re off the hook even though they have a lease till June 2010? and I have to apply the last month`s rent deposit to the Aug rent---whats the point of a lease then?

 

[invst4profit]

Your tenant will be in violation of there lease if they walk. That is clear.
The act reads that a tenant must give 60 days notice to leave ending on the last day of the term of the lease not simply 60 days notice.
A LL is not obligated to accept just any individual a tenant provides as a sub lease. That information you received from the switchboard at the LTB is not strictly correct. As a LL you have the right to refuse a sub lease if the applicant does not pass your screening process for legitimate reasons.
The fact that the LTB may release the tenant does not change the fact that civil court will still likely uphold the lease.
As long as you are making a reasonable effort to replace the tenant your present tenant is responsible for the rent until such time as you have an "acceptable" replacement under the Act.

Bottom line is regardless of the tenants actions you would never accept a substandard tenant simply because you are being threatened by your present tenant.
Explain to your tenant there responsibilities under a sub lease agreement. They may see the light especially when you explain you will be suing them for the entirety of the lease term if no acceptable replacement is found.
He and you need to understands the RTA and civil court are entirely different and not interrelated in there jurisdiction and rulings.
Explain to your tenant that any action you are forced to take will be reflected on his credit rating and the courts will garnish there wages.
Make sure you also inform him he will be charged for all expenses related to finding a replacement. Advertising, credit check etc.

Convince him it is to his advantage to co operate with you, releasing his obligations rather than sub leasing, and you will likely be able to find a replacement within the two month period, maybe three.

 

[mcgregok]

QUOTE (RArora @ Jul 13 2009, 02:26 PM) I was wondering if someone could help me with some advice with a predicament we have landed up with today.

For my 2 cents worth I have never found that the best way to go was hard line. Having the tenant sublease and be responsiable for the new tenant is not a situation I would be interested in. I would rather work with the tenent to find a new tenent with a new lease .

 

[RArora]

thank you - that is very good advice and I am feeling so much better after everyone has given suggestions on how to deal with this situation.

I hope this gets resolved soon-and to the best end result of everyone involved...

Regards
Rasna

 

[housingrental]

For ease of readability I've highlighted sections of your original post in red and responded back to them in black. Please also see my post on other questions relating to this topic at:


I was wondering if someone could help me with some advice with a predicament we have landed up with today.



I just received this in an email from our tenants here in Ottawa.



"Effective August 31/09, We are going to sublet your home as there is no other way that we can come up with the rent for the remainder of the lease until next June 2010."



this family has a 2 yr lease with us ending July 2010. they've been having problems with paying their full rent in time and have paid in installments many months.



I called L&T board and spoke to them and they were quite rude and unhelpful. They said that the tenant can break the lease by asking to sub-let/assign it to someone else. Their last month's rent will be used towards the actual last month and not the last month of the lease that they had signed.



So they've effectively given 1.5 months notice (i dont know if writing this by email is considered notice in Ontario/Canada) and are saying they will find someone to move in Sept 1st.



What can I do here? Can I tell them we will employ a property management co. to find a tenant and they are responsible for their fees(1 month's rent) , can I also tell them they should at least give 2 months notice hence they owe us about a half month's rent if they leave aug 31st?



Should I let them find the tenant to sub/lease it to, or just allow them to leave on aug 31st and find a new tenant myself?





The appendix in the lease for them states that they would have to pay us $100 for admn cost in the event of a sub-let. But is this legally allowed in Ontario?



Your advice is greatly appreciated.



Thanks



Rasna

 

[housingrental]

I`m not sure I agree.
Doesn`t an assignment normally involve removal of current tenant having any liability for a property ? New tenants is approved by you and moves in then that`s the new tenant. Old tenants is gone. ?? Are you sure you didn`t mean subletting ?



QUOTE (rforgiel @ Jul 13 2009, 04:53 PM) I was in this situation once and did an assignment of rent. This is like subleting but the original tenant is still on the hook should the new tenant not pay or damage things. It is a nice solution but here again should things go wrong, you do the traditional N4 and eviction process and then go after your original tenant for damages. Depending on their character and desire to keep their credit score clean it may be getting blood from a stone.

 

[CarrieKoch]

We are doing more assigning of leases. The tenants do all the work advertising and showing the unit (people like to rent from tenants who have had good experiences and love where they live) We charge $150 for is the tenants to do this rather then the 2 month penalty we would charge for them to break the lease. We will meet the new tenants, do a full tenant screening, and prepare new lease, do a full move-in.

 

[housingrental]

Nice post
To add - re my other post on second topic she made - document everything when you try to re-rent


QUOTE (invst4profit @ Jul 13 2009, 07:16 PM) Your tenant will be in violation of there lease if they walk. That is clear.
The act reads that a tenant must give 60 days notice to leave ending on the last day of the term of the lease not simply 60 days notice.
A LL is not obligated to accept just any individual a tenant provides as a sub lease. That information you received from the switchboard at the LTB is not strictly correct. As a LL you have the right to refuse a sub lease if the applicant does not pass your screening process for legitimate reasons.
The fact that the LTB may release the tenant does not change the fact that civil court will still likely uphold the lease.
As long as you are making a reasonable effort to replace the tenant your present tenant is responsible for the rent until such time as you have an "acceptable" replacement under the Act.

Bottom line is regardless of the tenants actions you would never accept a substandard tenant simply because you are being threatened by your present tenant.
Explain to your tenant there responsibilities under a sub lease agreement. They may see the light especially when you explain you will be suing them for the entirety of the lease term if no acceptable replacement is found.
He and you need to understands the RTA and civil court are entirely different and not interrelated in there jurisdiction and rulings.
Explain to your tenant that any action you are forced to take will be reflected on his credit rating and the courts will garnish there wages.
Make sure you also inform him he will be charged for all expenses related to finding a replacement. Advertising, credit check etc.

Convince him it is to his advantage to co operate with you, releasing his obligations rather than sub leasing, and you will likely be able to find a replacement within the two month period, maybe three.