Property damage can expose an Ontario landlord to significant repair costs, safety concerns and lost rental income. However, a landlord cannot simply charge the tenant, change the locks or remove the tenant from the property.

Where a tenant, occupant or guest has wilfully or negligently caused undue damage, the landlord may be able to serve a Form N5 and apply to the Landlord and Tenant Board (“LTB”) for compensation, eviction or both. Success depends on selecting the correct notice, documenting the damage and meeting the applicable deadlines.

Tenant Damage Versus Normal Wear and Tear

Section 34 of the Residential Tenancies Act, 2006 (Ontario) makes a tenant responsible for repairing undue damage caused by the wilful or negligent conduct of:

• The tenant;
• Another occupant of the rental unit; or
• A person the tenant permits in the residential complex, including a guest.

A tenant is not responsible for deterioration caused by ordinary use. The difference between normal wear and tear and undue damage depends on the nature of the damage, the age and prior condition of the item and the circumstances in which the damage occurred.

Faded paint, lightly worn flooring and minor scuff marks may result from normal residential use. Broken doors, smashed windows, large wall holes, severe pet damage or water damage caused by careless conduct may constitute undue damage.

The landlord must be able to show more than the existence of damage. The evidence must connect the damage to wilful or negligent conduct by the tenant, an occupant or a permitted guest.

What Should a Landlord Do After Discovering Damage?

Prevent further damage

A landlord should take reasonable steps to stop the damage from becoming worse. This may include arranging emergency repairs, shutting off water or contacting emergency services where there is an immediate safety risk.

Landlords should not change the locks, disconnect vital services or attempt to remove the tenant without an LTB order. Only the Sheriff can enforce an eviction order.

Inspect the rental unit lawfully

Unless there is an emergency or the tenant consents at the time of entry, a landlord will generally need to provide at least 24 hours’ written notice before entering to inspect the rental unit or complete repairs. The notice of entry must comply with the Residential Tenancies Act.

Preserve evidence

N5 proceedings are evidence-driven. Landlords should collect and preserve:

• Dated photographs and videos;
• Move-in and subsequent inspection reports;
• Written communications with the tenant;
• Maintenance and incident reports;
• Witness statements;
• Contractor assessments;
• Repair estimates, invoices and receipts; and
• Evidence of the damaged item’s age and prior condition.

Before-and-after evidence can be particularly important when the tenant alleges that the condition existed before the tenancy or resulted from ordinary use.

What Is an N5 Notice?

Form N5 is formally called a “Notice to End your Tenancy for Interfering with Others, Damage or Overcrowding.”

For property damage, an N5 may be used where a tenant, occupant or person permitted into the complex by the tenant has wilfully or negligently caused undue damage to the rental unit or residential complex.

An N5 is a notice, not an eviction order. The tenant does not have to leave merely because the landlord served the form.

Completing an N5 for Property Damage

The landlord should use the most recent version of the N5 available from Tribunals Ontario. The notice must identify the landlords, all tenants and the complete rental-unit address.

For property damage, the landlord should select Reason 2 and indicate whether the notice is the first or second N5 served within the preceding six months.

The notice must provide enough detail for the tenant to understand the allegation and what must be done to correct it. The particulars should identify:

• The date and time of the incident, where known;
• Where the damage occurred;
• What property was damaged;
• What the tenant, occupant or guest allegedly did;
• Why the conduct was wilful or negligent;
• Whether repair or replacement is required; and
• The reasonable cost of correcting the damage.

A general statement such as “the tenant damaged the unit” may not provide sufficient detail. If additional space is required, the landlord can use an attached page that is clearly identified as part of the notice and served with the complete N5.

The First N5 and Seven-Day Correction Period

For a first N5 within six months, the termination date must be at least 20 days after the notice is given to the tenant.

The tenant then has seven days after receiving the notice to correct the problem. For property damage, the tenant may generally void the N5 by:

• Repairing the damaged property;
• Paying the landlord’s reasonable repair costs;
• Replacing the damaged property where repair is not reasonable;
• Paying the reasonable replacement cost; or
• Making arrangements satisfactory to the landlord to correct the problem.

If the tenant complies within the seven-day period, the N5 becomes void. The landlord cannot pursue eviction based on that notice.

If the tenant does not comply, the landlord may file an L2 application after the correction period expires.

Calculating the Damage Claim

The amount stated in the N5 should reflect the reasonable cost of repairing the property or, where repair is not reasonable, replacing it.

The landlord should obtain itemized estimates or invoices that separate labour, materials, taxes and other directly related expenses. The claim should not include unrelated renovations or upgrades.

The item’s age and prior condition may also affect the amount recoverable. A claim for the full cost of a brand-new replacement may be challenged where the damaged item was already old, worn or approaching the end of its useful life.

If the repairs have not yet been completed, the landlord can rely on reliable estimates. Unsupported or speculative amounts may not be accepted by the LTB.

Serving the N5

The N5 must be delivered using a service method permitted by the Residential Tenancies Act and the LTB Rules of Procedure.

Different methods have different deemed-delivery dates. For example, additional time must be included when the notice is sent by mail or courier. These rules affect both the seven-day correction period and the earliest termination date.

The person who serves the notice should complete a Certificate of Service and retain proof of delivery. An incorrect termination date or improper service may result in the application being dismissed.

Filing the L2 Application

If the tenant does not correct the damage within the seven-day period, the landlord may file a Form L2 application.

Through the L2, the landlord may request:

• Termination of the tenancy and eviction;
• Compensation for reasonable repair or replacement costs; and
• Other remedies available under the application.

An L2 seeking eviction based on an N5 must be filed no later than 30 days after the termination date stated in the notice. The landlord must generally submit the N5, the Certificate of Service and the required application materials.

If the landlord only seeks compensation and does not want to terminate the tenancy, it may be possible to file an L2 monetary claim while the tenant remains in possession without first serving an N5.

What Happens With a Second N5?

A different process applies where the first N5 became void because the tenant corrected the problem, but another qualifying incident occurs after the correction period and within six months of the first notice.

A second N5:

• Must generally provide a termination date at least 14 days after it is given;
• Cannot be served until at least seven days have passed since the first N5;
• Is not voidable by the tenant; and
• Allows the landlord to file an L2 immediately after service.

When relying on a second N5, the landlord must generally submit the first notice and the Certificates of Service for both notices. The new incident must also be described and proven independently.

Preparing for the LTB Hearing

Serving a valid N5 does not guarantee eviction or compensation. At the hearing, the landlord must prove that:

1. The tenant, occupant or permitted guest caused the damage;
2. The conduct was wilful or negligent;
3. The damage was undue rather than normal wear and tear;
4. The N5 was accurate and properly served; and
5. The amount claimed is reasonable.

The landlord’s evidence package may include the tenancy agreement, inspection reports, photographs, videos, contractor evidence, communications with the tenant and itemized repair estimates or invoices.

Even if the landlord proves the damage, the LTB must consider the circumstances before ordering eviction. Depending on the evidence, the LTB may award compensation, impose conditions, delay eviction or refuse to terminate the tenancy.

N5 or N7?

An N7 may be available where a person deliberately caused undue damage or used the rental property in a manner that caused, or could reasonably be expected to cause, significantly more serious damage.

An N7 has a shorter notice period and cannot be voided. However, it also carries a higher evidentiary burden. If the landlord alleges deliberate damage but cannot prove it, the application may be dismissed.

The choice between an N5 and N7 should be based on the facts and available evidence, not simply the cost of the repairs.

Protect Your Property With the Correct Legal Process

N5 proceedings are highly procedural. An unclear description, unsupported repair amount, incorrect termination date or service error can delay the case or result in dismissal.

Landlord First LLP represents Ontario landlords in property-damage and eviction proceedings, from preparing the notice and organizing the evidence to filing the L2 and appearing at the LTB hearing.

If your tenant has damaged your rental property, contact Landlord First LLP for an assessment or call 1-855-563-5345.

This article provides general information about Ontario residential tenancy law and does not constitute legal advice. Legal rights and procedures depend on the facts of each case.