- July 17, 2024
- Posted by: legaleseblogger
- Category: Related News
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Landlord’s Financial Crisis Leaves Tenants in the Dark
The Situation
I initially posted about this on another forum, but I’m bringing it to Reddit because I’m genuinely unsure about what to do. Here’s the long story: my landlord hasn’t been paying the mortgage on the condo or any utilities. As part of our rent, utilities are included, and we pay an additional $100 per month towards hydro. Unfortunately, he was sent to jail (unknown to me) and defaulted on his mortgage, leading to legal action against him. Since we signed a year-long lease, the mortgage company decided to honor our lease and requested we forward our rent money to them. This was no problem.
The Unexpected Twist
However, yesterday we woke up at 8 am to find no power and a note stating that our electricity bill was in arrears. We were informed that we needed to pay the amount owing in full for the power to be restored. We contacted the mortgage company and electric company and were told to pay the rent, and they would turn it back on. I’m struggling to understand how this works, considering we’ve paid our rent on time every single month for the past 8 months, only to discover that our landlord has not paid any bills during that time.
A Critical Situation
As tenants, we’re not in a position to pay the amount owing, and I’m worried about the consequences. I’m seeking advice on what to do and how to get our power back. I’m particularly concerned about the legal fees, as we’re already struggling financially. I’m hoping someone can provide guidance on how to navigate this situation.
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If you pay a flat $100 per month for this regardless of your usage, electricity is simply part of “rent”. If your landlord is now the mortgage lender, they have violated RTA rules by withholding a vital service included in your rent. You need to tell them in no uncertain terms they need to get the power back on immediately. You are not in any way liable to pay any outstanding utilities arrears to the electricity provider, this is solely on the landlord to do.
You can start by contacting your city bylaw immediately, and they can hopefully get involved and threaten fines if landlord doesn’t act right away.
You can also file a T2 and Request to Shorten Time application with the LTB against the mortgage lender for withholding of a vital service, and request rent abatement for the issue.
EDIT: Also can contact the RHEU as they can get landlord to act with threat of levelling fines or charges against them if they don’t.
Electricity is considered a vital service. Contact your Municipal bylaw enforcement to address this issue asap.
Create a record of when/how you contacted your landlord regarding the issue. Contact them one more time demanding immediate action, or you’ll be contacting the Rental Housing Enforcement Unit for your landlord failing to provide a vital service which is covered by your rent/lease.
Contact info here:
https://www.ontario.ca/page/solve-disagreement-your-landlord-or-tenant
Other posters have covered the utilities angle. I want to point out the following:
>Since we signed a year lease, the mortgage company decided to honor our lease and requested we forward our rent money to them.
What they said is BS. The mortgage company has no choice but to honour your lease. They became your landlord the moment they took ownership/control of the property. Your lease is unaffected by this receivership. Your lease can also become month-to-month at the end of its term, just like any other lease. The mortgage company will need to follow the procedures and protocols set by the LTB to evict you.
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Don’t pay anymore rent to him, instead put it in a trust/escrow account with him named. You can use the rent to pay the power bill but write a letter stating unlivable conditions due to utilizing cut and monies for rent will be placed in the account minus amounts paid to pay all utilities and leans.
When the bank forecloses on the unit you maybe able to recover your damage deposit from any funds in the account.
But legally most jurisdictions say if you withhold rent you must have it in a trust/enquire account.
Be advisable to speak with a lawyer, the utilities being shut off is the trigger to allow you to take this action.
Have you tried contacting bylaw?
Who told you the utilities would get turned back on if you paid your rent? That’s who you need to talk to.
Did the morgatge company say they would pay the electricity company? Both companies are owed money by your landlord. Do you have a tenancy association or legal aid that can give you advice.
I would also contact hydro and advise them of the situation.
The mortgage holder would have obtained what is called an assignment of rents and leases. This means the lease you signed with the landlord was assigned to the mortgage holder, they took over the rights and responsibilities of the landlord when they took control of the property. This means they have the right to collect the rent, and the responsibility to uphold the terms of the lease. If utilities are listed as the landlords responsibility in the lease, the mortgage holder is responsible for paying utility bills. Contact the mortgage holder and remind them that your lease includes utilities, and that they need to pay the utility company.
The mortgage holder is not doing you a favour by continuing your lease, they are legally obligated to honour the terms of the lease that they took assignment of.
If the lease states that utilities are the tenants responsibility, you would call the utility company and setup a new account in your name. You are not responsible for the landlord’s unpaid bills, the utility company will have to take him to collections for that.
As far as I understand, you can switch the utilities to your name and then deduct the amounts from the rent if you provide the invoices/receipts.
You might technically need to have their agreement normally, but given your home is deemed unliveable without utilities there shouldn’t be any reasonable expectation for you to wait.
Might be different depending on province.
Why are you paying $100 extra if utilities are included?
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