General Issues

Entitlement to Collect Rent

s. 1, 51, The Residential Tenancies Act
s. 14 (1)(d), The Condominium Act
 

Mortgagee: a person, mortgage company or financial institution that takes a mortgage interest in a property as security for a loan.

Notice of Attornment: a notice to a tenant to pay rent to a mortgagee or someone the mortgagee designates instead of to the landlord.

Notice of Garnishment: a notice to a tenant to pay rent to Court of Queen’s Bench or Canada Revenue Agency to satisfy an unpaid debt or judgement of a landlord.
 

This policy does not apply to situations where the Branch re-directs rent.

Occasionally tenants receive notice to pay their rent to someone other than their landlord. This happens most frequently when:
 

• the landlord doesn’t make their mortgage payments; the mortgagee gives the tenants a Notice of Attornment;

• the landlord doesn’t pay their common element fees for a rental unit in a condominium complex; the condominium corporation gives the tenant a simple notice to pay them the rent;

• the landlord owes money to Canada Revenue Agency; Canada Revenue Agency issues a Notice of Garnishment;

• there is a change of landlord.

Often when a tenant receives this kind of notice, they worry about the landlord’s reaction. They’re concerned that the landlord may give them notice to move if they pay the rent to someone else.

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When someone other than a landlord wants to collect rent, the Branch suggests that they give the tenants a signed written notice:

• outlining the reason why they want the rent. For example: The landlord has not paid the mortgage for the rental unit or residential complex.;

• explaining their right to collect the rent; For example: The landlord signed a mortgage agreement giving the mortgagee the right to collect rent if the landlord missed mortgage payments.;

• advising the tenant that they will protect the tenant against any claim by the landlord for the rent; this is often called an "indemnification" or "save harmless" clause.

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The Branch generally uses mediation to resolve "entitlement" disputes. But if there’s a dispute or disagreement, the Branch has the authority to decide who is entitled to receive rent.

If a tenant pays rent to someone other than their landlord, the landlord may try to terminate the tenancy for non-payment of rent. The landlord may also apply to the Branch for an Order of Possession. As long as:

• the tenant provides proof that they paid their rent; and
   
• there is evidence to show that the person who collected the rent was entitled to receive it;

it’s unlikely the Branch would make an Order against the tenant.

When a mortgagee collects rent, the Branch considers them to be a landlord. They are then responsible for all the duties of a landlord under the Act and any tenancy agreement. The mortgagee must give each tenant a Notice to Tenant–Change of Landlord form with the new landlord’s name and phone number and information on the tenant’s security deposit.
 

Overview

A tenant contacts the Branch because they’ve been asked to pay rent to someone other than their landlord. An officer contacts all involved parties to try to resolve the issues. If necessary, the officer makes a decision on who is entitled to the rent.
 

Steps

1. The officer encourages the tenant to discuss their concerns with their landlord and whoever is trying to collect the rent.
    

2. If there is a dispute between the landlord and the other party over the rent, the tenant may ask the Branch to decide who is entitled to the money.
    

3. The officer contacts the landlord and the other party to discuss the tenant’s concerns. If necessary, the officer may ask the landlord and the other party for information to support their claim of entitlement to the rent.
    

4. If the officer is not able to resolve the problem through mediation, the officer may order the tenant to pay their rent to the Branch. The Branch holds the rent until there is a decision on who’s entitled to the money.
    

5. The officer reviews the information received from the landlord and other party. The officer issues a decision about who is entitled to the rent. In some cases, the officer may hold a hearing to decide the case.
    

6. Anyone directly affected by the officer’s decision may appeal it to the Residential Tenancies Commission.
    

7. If there is no appeal and the Branch holds rent, the officer pays the money to the person who is entitled to receive it. If there is an appeal, the Branch continues to hold the money until there is a final decision.

Notice to Tenant-Change of Landlord...........Form 4/Residential Tenancies Regulation

For more information on mediation, see Mediation in this Section.
For details on rent redirects by the Branch, see Repairs in Section 4 and Utilities in Section 5.
For details on hearings, see Hearings in Section 11.
 

March, 2004 *

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