Your first stop for self-help is a review of our FAQs. Take a look at the ever increasing collection of questions asked by Ontario’s small-scale landlords as well as the actual answers provided by Landlord’s Self-Help Centre.
If your tenant is behind in the rent, you cannot do anything that affects the supply of utilities, as this would be an offence under the Residential Tenancies Act, and would allow the tenant to take you to the Landlord and Tenant Board for a rent abatement.
You should serve the N4 in the proper manner, for the tenant to pay or move out, and then file an L1 application with the Board on or after the termination date has passed.
You cannot charge or ask extra money for the extra utility usage since this would be a unilateral change to the contract that you entered into with the tenant. You are only allowed to increase the rent by the guideline amount once every 12 months and you are also required to serving a 90 days notice N1.
The same goes with the extra people living or visiting, unless there is overcrowding according to the local municipality, tenants are free to have as many people visiting/living with them as they please.
Currently the Residential Tenancies Act does not have any provisions about this particular issue, our understanding is that these costs cannot be passed on to existing tenants. However, for a new tenancy if the tenants will be paying for these charges it must be specifically addressed in the lease agreement as a separate charge.
You are correct in assuming that you do not have any remedy available at present to deal with a spike in utility increases. We recommend that you ask the tenant for the allowable rental guideline increase every year, using the proper Landlord and Tenant Board notice, as a way to help deal with some of the increased costs.
If the tenant is still in possession of the rental unit a landlord can file an L2 application for failure to pay utility costs with the LTB, to recover the costs for the utilities. You can also serve the tenant with and N5 Notice. The notice gives the tenant 7 days to pay the utilities and if the problem is not corrected within a specified time period (7 days) then you could file an L2 application to the Landlord and Tenant Board seeking an order to terminate the tenancy and recover the unpaid utility costs from the tenant. If the tenant has already moved out, you can file an L10 application with the LTB to recover unpaid utility costs for up to one year after they leave the unit. The prescribed forms are available at http://tribunalsontario.ca/ltb/forms/.
If you have an agreement where the water or other utilities are included in the rent, then there isn’t a way you can change it at this point. Whether the water is provided to you at a flat rate or on a metered basis, you cannot reduce or remove the service without their permission. If the tenants do agree to take on the responsibility of paying their own water, you would have to reduce the rent to compensate (using the average monthly cost of the reduced service) for the removal of services that was previously included in the rent.
Since this is a charge for utilities, it would not be considered rent, and you cannot serve the N4 for arrears of rent notice. In this case, your recourse would be to serve an N5 notice for interfering with your lawful rights. If the issue is not corrected within a specified period (7 days), you may file an L2 application to the Landlord and Tenant Board seeking an order to terminate the tenancy and to recover the unpaid utility costs from the tenant. The prescribed forms are available on the LTB website at, http://tribunalsontario.ca/ltb/forms/.
Some municipalities may not change the water bill to the tenant’s name, therefore when the bill is not paid, the municipality does not try to collect from the tenant even though your tenancy agreement may state that the tenant is responsible to pay. Instead, the municipality will add these arrears to your property tax bill. To deal with the unpaid utilities, you may serve the tenant with the form N5 based on the reason of interfering with the landlord’s lawful rights, privileges or interests. The N5 can be given if you’re seeking termination of the tenancy. If the problem is not corrected within a specified time period (7 days) you can file an L2 application at the LTB seeking an order to terminate the tenancy and to recover the unpaid utility costs from the tenant. The prescribed form is available on the LTB website, at http://tribunalsontario.ca/ltb/forms/.
You cannot force the tenant to pay the gas bill, and the Landlord and Tenant Board does not acknowledge potential damage as grounds to terminate a tenancy. So, unless the tenant moves out you are faced with the following choices. You can either:
1 – Approach the tenant about agreeing to change the terms of the rental agreement to include gas and possibly hydro in the rent, in exchange for an increase in rent to reflect the average extra charge that you will incur, once the gas bills go into your name.
2 – Speak to the utility provider about making temporary payments to keep the utilities on. This may be difficult due to privacy law restrictions, and they may want the tenant to be involved in any changes.
3 – Switch the bill to your name anyway and file an application with the LTB. You can file an L2 application for failure to comply with utility costs with the LTB. The prescribed form is available on the LTB website at http://tribunalsontario.ca/ltb/forms/.
Either of these scenarios will hopefully avoid a potential situation involving burst pipes, flood, insurance claims and so forth. Otherwise, the tenant may agree to vacate very soon, and if so, you should try to get a termination agreement signed (Form N11). All the forms are available from the Landlord and Tenant Board website – http://tribunalsontario.ca/ltb/forms/.
If this tenant has never paid for hydro, legally the tenant does not have to start paying now unless he agrees to it. However if he does agree to it, you will have to reduce his rent because he would now be paying for a service that was previously included in the rent.
Landlords can file an L10 application for the unpaid utility costs with the LTB within one year from the date the tenant vacated the rental unit. However, in order to file this application with the LTB, you will have to find out their new residential address to be able to serve them. The prescribed form is available on the LTB at http://tribunalsontario.ca/ltb/forms/.
If the tenant agreed to pay for the utility bill including the rental for the hot water tank then the tenant is responsible for the entire utility bill unless otherwise specified in the tenancy agreement. You can give your tenant a N4 Notice for Non-Payment of Rent if he/she has deducted any amount from the rent and the Landlord and Tenant Board can make a decision on the issue.
If the utility account is in your name, you should pay the bill to avoid further issues (such as collections or damage to your credit), as the utility company will hold you responsible.
To recover the money, you can file an L10 application with the Landlord and Tenant Board for failure to pay utility costs. This must be done within one year from the date the tenant moved out. You will need to provide proof that the tenant was responsible for the utilities and evidence of the outstanding balance. The prescribed form is available on the LTB website: http://tribunalsontario.ca/ltb/forms/.
The Residential Tenancies Act states that the landlord is responsible for “vital services” which are defined as hot or cold water, fuel, electricity, gas and heat unless the tenant expressly agrees to “obtain and maintain” the vital services. In order to have the tenant pay for the rental of the hot water tank the lease agreement should be specific and state that “the tenant expressly agrees to obtain and maintain all vital services including heat, electricity, water, hot water and rental of hot water tank”.
Requiring the tenant to pay additional costs at year end is not a reasonable arrangement. There are often problems related to collecting the difference later. Your rental agreement would have to be specific and describe what is considered additional costs.
If you already have a lease that is all inclusive there isn’t a way you can change it at this point unless the tenants agree, in writing. However, even if they do agree you would then have to reduce the rent to compensate for the removal of services that were previously included in the rent. You’re allowed to increase the rent once every twelve months, as long as the proper guidelines are followed.
Section 125 of the Residential Tenancies Act only allows such changes by agreement, and then requires the rent to be reduced by a prescribed amount if the parties both agree to the change. Usually this means that the rent will be reduced by the average actual cost to the landlord. So if the water costs $600 per year on average, then the monthly rent would be reduced by $50 – since the tenant will have to likely pay this amount, separate from their rent, to the utility company or provider. Decrease in services, etc. “25. A landlord shall decrease the rent charged to a tenant for a rental unit as prescribed if the landlord and the tenant agree that the landlord will cease to provide anything referred to in subsection 123 (1) with respect to the tenant’s occupancy of the rental unit. 2006, c. 17, s. 125.” Section 125 deals with parking or a list of 12 other services or facilities, namely: 1. Cable television. 2. Satellite television. 3. An air conditioner. 4. Extra electricity for an air conditioner. 5. Extra electricity for a washer or dryer in the rental unit. 6. Blockheater plug-ins. 7. Lockers or other storage space. 8. Heat. 9. Electricity. 10. Water or sewage services, excluding capital work. 11. Floor space. 12. Property taxes with respect to a site for a mobile home or a land lease home. O. Reg. 516/06, s. 16 (1). We realize this is not the answer you were expecting, but we hope it has been helpful.
In this situation, you don’t really have too many options. Since the utilities are already included in the rent, there is no legal way to have the tenants pay for the excess costs of the hydro/water. The only way that would be permissible is if the tenants agree to start paying for the utilities. However, even if they do agree to start paying for the utilities now, you would have to reduce the rent to compensate for the removal of a service that was previously included in the rent.
The Apportionment of Utility Costs Section 13 of Ont. Regulation 394/10 describes the method that should be used to calculate a tenant’s portion of utility cost. This section applies to buildings containing not more than six rental units. The following is a link to the regulations
https://www.ontario.ca/laws/regulation/100394#BK14
If you already have an agreement in place where the utilities are included in the rent you cannot change it at this point unless the tenant agrees to it. However, even if the tenant did agree to pay a portion of the utilities you will have to reduce the rent to compensate for the removal of this service that was previously included in the rent.
Unfortunately we do not know of a way that you can protect yourself should the tenant decide to remove their name from the account, other than requesting that Toronto Hydro notify you if this happens.
If you have an agreement where the utilities are included in the rent there isn’t a way you can change it unless the tenants agree, in writing. However, even if they do agree to start paying for the utilities you would have to reduce the rent to compensate for the removal of services that were previously included in the rent. The only other option you have is to increase their rent by the rent increase guideline if they have already been there for twelve months, and you must give them 90 days’ notice using the prescribed form which is Form N1.
A landlord cannot charge extra when a tenant acquires an air conditioner unless it has been clearly specified in a written tenancy agreement that the tenant will pay extra if they chose to have an air conditioner.
If the utility accounts are in the tenant’s name and they default the landlord will not be held responsible. The utility companies have to collect from the person who is on the account.