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How to Successfully Transition Your Rental Property to a Boarding House: Key Steps and Considerations

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View this comment on our Facebook Group (4) ONTARIO LANDLORD HELP Q & A | Hello everyone. I have a house that I’m renting out for 2000 a month in Ontario | Facebook

Hello Landlords,
We understand that the financial challenges of managing a rental property can be stressful. It’s important to approach these difficulties with caution to ensure compliance with Ontario’s Residential Tenancies Act (RTA) and to avoid any potential legal complications.
Here are the steps you should consider:

  1. Understanding Your Options
    Personal Use by Family Member: If you plan to have a family member move in, it has to be good faith requirement to occupy the rental property. Under the RTA, you, the landlord, a member of your immediate family or a person who provides or will provide care services to you or a member of your immediate family wants to move into the rental unit and occupy it for at least one year. You must also provide reasons why you need the rental property and will need to submit evidence to strengthen your claims. If you do intend to move in for at least one year and it is in good faith, you may be able to terminate the current tenancy for personal use. Additionally, you will need to provide a declaration and you will need to provide compensation to the tenant (equivalent to one month’s rent).
    Conversion to Boarding House: If you plan to convert the entire house into a boarding house with shared accommodations, this is a significant change in the use of the property. The existing tenant would need to vacate the property to make this possible.
  2. Serving the Proper Notice
    N12 Notice: If you’re ending the tenancy for personal use (e.g., moving a family member into one of the rooms), you must serve the tenant with an N12 notice. This notice should state that you need possession of the property for a family member and should be served at least 60 days before the termination date. Also, the termination date must be the last day of the rental period. For example, if you pay rent on the first of each month, the termination date must be the last day of a month. Remember, you are required to pay the tenant compensation equal to one month’s rent by the termination date the served notice, or offer another acceptable rental unit.
    N13 Notice: If you intend to convert the property into a boarding house, you would need to serve an N13 notice for demolition, conversion, or extensive renovations. This notice requires you to provide at least 120 days’ notice before the termination date. The tenant may have the right to return to the property after the conversion, so be clear about your plans in the notice.
  3. Documentation and Communication
    Document Everything: Keep records of all communications and interactions with your tenant and copies of any notices you serve. This documentation is crucial if any disputes arise.
    Communicate Clearly: Make sure to explain the situation to your tenant clearly and professionally. It might be helpful to have a discussion before serving formal notice to see if an agreement can be reached amicably.
  4. Considering Legal Advice
    Seek Legal Counsel: Before taking action, it’s advisable to consult with a licensed paralegal or lawyer who specializes in landlord-tenant law. They can provide tailored advice based on your specific circumstances and help you navigate the process. Additionally, there might be different grounds to issue a notice of termination of the tenancy.
  5. Potential Risks
    Bad Faith Claims: If the tenant believes that the notice is being served in bad faith (e.g., you’re not genuinely intending for a family member to move in or to convert the property), they may challenge the notice at the Landlord and Tenant Board (LTB). The tenant must apply no later than one year after the date the tenant vacated the rental unit.
    If the board finds that the notice was served in bad faith, you could face penalties, including fines or having to compensate the tenant further. There are five common remedies which the LTB can grant.
    Remedy 1: The landlord must pay me a rent abatement.
    Remedy 2: The landlord must pay a fine to the LTB.
    Remedy 3: The landlord must pay me the difference in rent between my old rental unit and my new rental unit for one year from the date I moved out.
    Remedy 4: The landlord must pay me for my moving and storage expenses.
    Remedy 5: The landlord must pay me general compensation.

Taking the correct steps is essential to avoid potential legal repercussions and ensure a smooth transition. I hope this helps, and feel free to reach out if you have any further questions or need assistance in this process.

Here is the booking link for a 15-minute free consultation with Landlord Pro Legal: https://meetings.hubspot.com/prouillard/free-15-minute-consultation-w-zehao-liu


Best regards,
Landlord Pro Legal SPC

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