There are many reasons a tenant might make a partial rent payment. When this happens, property managers can take different approaches to manage the situation quickly and effectively.
1. Communicate and adjust
Start by talking to the tenant to find out why they paid only part of the rent.
It could be as simple as a change in their pay schedule, meaning their cheque might now come after the rent is due. In cases like this, you might consider adjusting the rent due date to accommodate their new payday.
Another option is to give them until the next month to pay the outstanding balance along with their regular (full) rent payment, or agree a payment plan to recover the balance over several months.
The risk is a delay in the landlord’s payment that could potentially escalate to eviction if the tenant’s situation doesn’t improve. But if the tenant has been reliable and consistent until now, this approach could prevent future issues and maintain a strong tenant-housing provider relationship.
2. Take legal action
The second option is more direct: serving the tenant with an N4 form as soon as it’s legally permissible.
The N4 form can be used from the day after the rent is due, and gives the tenant 14 days to either pay the remaining rent or vacate the property. If they fail to pay within that timeframe, you can proceed by filing an L1 eviction form with the Landlord and Tenant Board (LTB).
Keep in mind it takes about five months on average to get a hearing at the LTB, so prepare your landlords for the possibility of going without full rent for an extended period.
Consistent steps to take
Regardless of the approach you choose, always document the first partial payment and any subsequent ones.
For tenants granted a second chance, consider sending them more frequent payment reminders. A platform like PayProp can automate these reminders and offer tenants a more secure and flexible way to pay, including in larger amounts than traditional e-transfers allow, which might help them get back on track.
You might also consider offering a payment plan, allowing the tenant to catch up on owed rent during the waiting period for an LTB hearing or even before filing an N4 in the first place.
If you go this route, make sure the payment plan is documented in writing and signed by both parties. This will be important evidence if you need to take further action.
In extreme cases, where it’s clear the tenant won’t be able to pay in full at all in the future, a cash-for-keys deal could be a last resort. This allows the tenant to move out voluntarily in exchange for a sum of money, which can be less costly and time-consuming than going through the eviction process.
Think before you act
Before taking any action, first consult with the landlord to ensure your proposed approach serves their best interests while also protecting your property management business.
