Whether you want to frame this as something your children tried to pull last week, or something you did when you were younger, I’m sure we’ve all been here…
Recall the time you told your parents about your “friend” who did something bad, or for whose actions you needed advice, except all along, it wasn’t your friend. It was you.
I assure you, the following blog post is not about me.
It happened “to a friend of mine.”
Seriously.
I would say “Thank God” it didn’t happen to me, but then I would have to pick one of the many Gods that exist out there, and I’d just get so completely off-topic.
Thank God I didn’t get off-topic…
A friend of mine began to tell me this story back in February but it’s only now coming to its completion (we hope) and only now is the story far enough along that we can avoid speculating on the worst-case scenario and actually bear witness to the worst-case scenario.
I would call the protagonist in the story “Jacqueline” but I don’t want to type that over and over, so we’ll just call her “Jenn” with two n’s.
Jenn is a real estate agent with another brokerage and, just like me, she absolutely loves working on leases. Just like me, she’s also sarcastic.
One of Jenn’s clients is a long-term condo investor who started buying resale units in the early-2010’s and now has four or five condos in her portfolio.
As is often the case when we look back after a major issue with a tenant, Jenn’s client had “never had a problem” in fifteen years of being a landlord.
We’ll call Jenn’s client “Kate” because that’s easy to type!
In early-2024, one of Kate’s tenants gave notice to vacate and Kate asked Jenn to find a new tenant, which Jenn did.
The tenant was exceptionally well-qualified and had a job with a well-known firm in financial services, worked downtown, and came with great references.
For one year, Kate didn’t hear a peep out of the tenant, and the tenant paid his rent on time.
In late-January of this year, the tenant gave notice to vacate to Kate, and provided the requisite N9: Tenant’s Notice To End The Tenancy.
The last day of the tenancy was scheduled to be March 31st, 2025, and the notice was provided to Kate on January 28th, 2025.
Everything was peachy.
Kate reached out to Jenn about listing the property for lease on MLS to find a new tenant for April 1st, and as she had done previously a dozen times, Jenn put the property up for lease and began to facilitate showings.
The tenant was very accommodating. Twenty-four hours’ notice were provided for all showings, as per the lease agreement, and there were no issues.
The rental market has been a little bit slow this year, so it wasn’t until late-February that Jenn was able to secure a suitable tenant for the unit.
Kate and the new tenant signed a lease for April 1st.
Ordinarily, and by “ordinarily” I mean every single time in the history of ever, the story ends here.
But in the first week of March, the existing tenant reached out to Kate and said that he had “changed his mind” and didn’t want to vacate the unit after all.
It was odd. Neither Kate, a landlord of fifteen years, had ever witnessed this before, nor had Jenn, who has been in real estate just as long.
I can also say that I have never encountered this situation either, nor have I heard of this happening, although I’m sure it has.
Kate really didn’t know what to do, so she simply emailed the existing tenant back and said, “I’m sorry, but I have already signed a lease with a new tenant for April 1st. You have provided me with a signed N9, which is legally binding.”
Kate did not hear back from the tenant.
Naturally, Kate assumed that the tenant realized he had no legal right to stay in the unit, and figured that this was the last she would hear of it.
Then Kate just got a “feeling” about the situation. She started to ponder the “what if” scenario, which was really scary:
What if the tenant refused to leave and Kate had two tenants for the same unit as of April 1st?
Here’s where many of you will look at this logically, rationally, but incorrectly, and say, “Kate doesn’t have two tenants as of April 1st; the existing tenant has no right to stay.”
True. Sort of.
There’s no way to physically remove the existing tenant.
You can’t call the police.
You can’t get in front of the Landlord & Tenant Board for six or eight months.
Call the sheriff?
Maybe.
But even then, the sheriff would need a court order on which to execute, and without the Landlord & Tenant Board providing a written eviction notice, I don’t think the sherrif’s office could do anything.
Kate decided to email the tenant and get confirmation that he was leaving, and simply said:
Hi (Name),
I haven’t heard back from you since our last correspondence on March 5th, so can I assume that you will be vacating the condo on or before March 31st as discussed?
The new tenant is moving in on April 1st.
Thank you!
Kate.
The tenant wrote back.
But it wasn’t what Kate wanted to hear. In fact, it confirmed her worst fears:
Kate, as I said two weeks ago, I’ve changed my mind and I’m not planning to move out. I can’t. My situation has changed and I’m sorry but I’m going to stay here and I will let you know if that changes.
This was a disaster waiting to happen.
Kate wrote back and said:
Hi (Name),
I’m sorry to hear that you’ve encountered hardship and I sympathize.
But the problem is: you provided legal notice to vacate. I leased the condo to a new tenant.
Please see attached, here is their new lease agreement.
Also attached is your signed N9 in case you don’t have a copy, but also an email from you, dated January 28th, showing the N9 attached.
Please consider my situation here as I can’t refuse to provide access to the new tenant.
Kate.
The tenant wrote back and simply said:
I would like to exercise my right to appear before the Landlord & Tenant Board.
And that was it.
Kate tried to call the tenant, but he didn’t answer. Kate tried to email the tenant back, but he didn’t reply.
Once a tenant says “LTB” it’s like in a police drama on television where the accused says “lawyer” and you can’t do anything about it.
Kate and Jenn began to consider their options, so Jenn called the real estate agent who had provided the new tenant and explained the situation.
What was the expected reaction?
I’m not sure. Perhaps Kate and Jenn didn’t really know what to expect either, but in the end, all they received was the indication that their problem was getting worse.
The agent for the new tenant simply said, “You’re going to have to find a way to get that tenant out, because my client is moving in on April 1st, come hell or high water.”
Call that a veiled threat if you want, and the “hell or high water” has no real value, since it’s not like the new tenant can move in with the old one still in place.
But this was enough for Kate and Jenn to start to really get concerned.
Jenn called the tenant and was able to reach him, but once he realized who Jenn was, the tenant simply said, “Look, I’ve exercised my right to appear in front of the LTB and that’s what I’m going to do,” and then hung up.
Jenn called the new tenant’s agent again and tried to plead with him to have some understanding and common sense, but he refused.
The agent said, “My client has already booked the moving elevator in the building and has provided a $500 deposit. My client has to be out of his current rental on April 1st and has nowhere to live. What do you expect him to do? What do you expect me to say?”
He made a good point.
But Jenn finally offered, “Look, I understand your situation and I know that you understand mine. But if the existing tenant doesn’t leave on March 31st and he’s still there on April 1st, your client can’t move in. He just can’t. We’re on the same page, right?”
The agent responded, “We’re on the same page when it comes to the fact that we know my client can’t move in, but we’re not on the same page saying that it’s just that simple. Because if this happens, then your landlord is in breach of contract, and she’s going to pay my client, big time.”
This was the situation that both Jenn and Kate feared the most and they began to look at their options.
They spoke to Jenn’s Broker.
They spoke to Kate’s paralegal.
They spoke to a real estate lawyer.
In the end, the consensus was not a consensus, but rather a multitude of opinions based on grey rather than black-and-white.
Apologies to lawyers, and consider that my father was a criminal lawyer for forty-two years, but we can all agree that lawyers love grey areas, right?
Just consider the standard “Offer To Lease” for a moment.
Here’s an example, and note the section that I have underlined in red:
That’s interesting, isn’t it?
“…provided the present tenant vacates…”
That’s very important, but again, consider that this isn’t necessarily cut-and-dry.
The law is grey, after all. It exists to be argued, examined, opined upon, and ultimately interpreted.
“Provided the present tenant vacates, we the Tenant hereby offer to lease…”
This can’t be interpreted as:
“If the current tenant doesn’t vacate, then this offer is null and void.”
But it can certainly be argued!
In the end, anything can be argued.
In Kate’s case, she basically had two tenants for her condo and only one would be able to live there.
There’s an argument to be made here that she had “nothing to worry about” and that the new tenant would simply go away and find something else, since he wouldn’t want to litigate.
But sometimes the threat of litigation is enough to force people to act, and that’s exactly what happened next.
The new tenant’s agent told Jenn that they would sign a “Mutual Release” of the lease agreement in exchange for two months’ rent, which was $4,800 in total.
So then Kate took the natural next step and emailed her existing tenant to ask if there was a way – via financial incentive, that he would consider leaving on March 31st.
She couldn’t get a reply from him for the weeks leading up to this, but he certainly replied to that email!
He told Kate that he would leave if she provided him with six months of rent, or a whopping $28,800.
As Kate saw it, she had three options:
1) Do nothing. Leave the existing tenant in place and risk being sued by the new tenant, even if there was potential that the Landlord & Tenant Board and/or small claims would take her side.
2) Pay the existing tenant $28,800 to vacate and have the new tenant move in, which she was legally obligated to do.
3) Pay the new tenant $4,800 to sign a Mutual Release so she could have, in writing, with absolute certainty, that the new lease offer was null and void and the new tenant would release her from any future legal action.
What do you think Kate did?
What would you do?
I know, I know. Everybody says they would choose option #1. It’s easy when you’re simply reading a story on a blog.
But the new tenant’s agent was getting very aggressive and began to involve his broker as well. The talk of “being in breach of contract” kept Kate up at night, and even though there was a chance that The Landlord & Tenant Board would take her side, the new tenant could claim hardship suffered, and ask for any sort of financial compensation.
Kate owns four or five condos. She’s been a landlord for fifteen years. She has a family and a full-time job.
She wanted this to go away.
So she paid the new tenant $4,800 and signed a Mutual Release.
She notified the existing tenant via email and he said, “Thank you,” and that was it.
Kate did wonder whether the existing tenant did this on purpose. She figured that it could be a really good scam: give legal notice to vacate, wait until the unit is leased to a new tenant, then refuse to leave, ask for an LTB hearing, and force the landlord to pay you.
Kate also did not want to think this was the case.
She wanted to see the best in people and to believe that nobody would act like this.
Kate also wanted to believe that she had no predisposition for naivety.
In the end, the $4,800 loss was unexpected, unnecessary, and in all ways “unfair,” even if you’re the most ardent champion of the lowest common denominator of society today, ie. those that say things like “she can afford it” and “homes are for living, not investing.”
But this goes down as yet another lesson in how today’s residential tenancy world can conspire to completely screw over a landlord who is doing everything right…
