Small Claims Court is something every small landlord in Ontario should know about. As a landlord who's been through the wringer with tenant issues, I know that knowledge empowers. 

At the time of this article being published in October 2024, I myself am going through the Small Claims Court process to recover rent arrears up to $35,000 by my former tenants.

It has been a long, thorough, and exhausting process. The silver lining is that I have an avenue to share everything that I’ve learned along the way! 

Watch this reel, I'm telling you why I ended up in this situation. Sigh!

I lost $35,000 as a dumb landlord.
Didn’t sign the Ontario Standard Lease.
Didn’t collect picture of I.D. Only saw it.
Didn’t fill out an official application.
Didn’t call previous landlords for references.
Didn’t verify bank account funds.
Didn’t ask for credit scores or report.
Didn’t get notable references.
Didn’t do rent reporting to the credit bureaus.
Didn’t check public incorporation business details.
Didn’t check the authenticity of their driving license.
Neighbours didn’t even know that I was the owner of the house.
Tenants worked a cash business for themselves.
Worst of all, dumbest of all, I was in a rush to rent it out.
Don’t ever be in a rush. Please make informed decisions.
- Weiting Bollu, co-founder, Openroom

Poetic, isn’t it. 

I paid a hefty price. And I’m not alone. I hope one day experiences like mine are almost unheard of. Until then, you and I need to know what recourse we have against losses we incur, such as pursuing our cases in Small Claims Court.

What is the Small Claims Court?

Small Claims Court is like a simplified version of the regular court system. It is a special part of the Superior Court of Justice that helps people solve disputes involving relatively small amounts of money. Here’s how it fits into Ontario’s and Canada’s court system:

1. Supreme Court of Canada: The highest court in the country. It handles important cases that affect the whole country. People only go to this court if their case is very complicated and has been through other courts first.
2. Ontario Court of Appeal: This is for cases where people believe the lower court made a mistake. It doesn't look at new evidence but reviews decisions from the lower courts.
3. Superior Court of Justice: This is a general court in Ontario that handles serious civil cases (like personal injury or property disputes), family law, criminal cases, and also appeals from the small claims court.‍
4. Small Claims Court: A part of the Superior Court, the small claims court is where people can resolve simpler disputes, typically involving amounts up to $35,000. It’s meant to be quicker and easier than other courts. Lawyers aren’t always required, and the rules are less formal.

How much is considered a small claim?

Now, let's talk about money in Small Claims Court. The current claim limit is $35,000. That means if your tenant owes you $35,000 or less, you can file your claim here. 

Each province in Canada has its own court to address small claims. The claim limit and processes also differ according to province. I did some research on the relevant courts and current claim limits to give you an idea of what I’m talking about:

As you can see, there are some significant differences between each court on what constitutes a small claim. Why? That’s a good question for another article one day!

Can I also claim property damages?

Yes. It's important to note that this court doesn't just handle monetary claims. You can also use it for the return of personal property valued at $35,000 or less. For example, if a tenant takes appliances or furniture that belong to you when they move out, and it's worth less than $35,000, you can file a claim here.

According to the Ontario Guide to Small Claims Court, you can sue for claims for damages, such as:

• property damage
• clothes damaged by a dry cleaner
• personal injuries
• breach of contract

When should I consider going to Small Claims Court?

It’s a valid question to ask yourself. As landlords, we often find ourselves in situations where the Small Claims Court becomes our go-to solution. I've identified three primary reasons why we turn to this legal avenue. 

#1 Recovering Unpaid Rent from Tenants

Unpaid rent is a nightmare we've all faced at some point. I remember when a tenant left me high and dry with several months of unpaid rent. The Small Claims Court became my beacon of hope after going to the Landlord and Tenant Board. It's the place to go when your tenant has moved out and still owes you rent money.

The court process allows you to seek a judgment for the unpaid amount, which can then be enforced through various means. It's not always a quick fix, but it's a solid step towards recouping your losses and maintaining your business's financial health.

Watch the video where I talk about my experience with unpaid utilities.

#2 Seeking Compensation for Property Damage

Property damage beyond normal wear and tear is another common reason landlords turn to Small Claims Court. I once had a tenant who decided to "redecorate" by painting the walls black and punching holes in the doors. The repair costs were significant, and in Ontario, the last month’s rent (LMR) is not a damage deposit so that means you have to go to court to get any of it back.

In such cases, the Small Claims Court provides a platform to present evidence of the damage, repair costs, and seek compensation. It's crucial to document everything thoroughly - before and after photos, repair invoices, and professional assessments can make or break your case.

#3 Resolving Disputes with Contractors or Service Providers

As landlords, we often work with contractors and service providers to maintain our properties. Sometimes, these relationships can sour. I've had my fair share of disputes over incomplete work, overcharging, or subpar services.

The Small Claims Court offers a structured way to resolve these conflicts when direct negotiation fails. It's particularly useful for disputes involving amounts within the court's jurisdiction. Remember, thorough documentation of contracts, communications, and any work performed (or not performed) is key to building a strong case.

Is it worth it?

Ah, is it? 

This is probably the most important question I’ve had to ask myself. I had already gone through a two-year long ordeal just to get my house back. 

It's important to think about whether the person or company you're claiming from can actually pay. If they:

• are unemployed,
• are bankrupt,
• have no personal assets or money of their own,
• don't own anything valuable (like a car) that isn't already under a lease,
• have stopped doing business, or
• have other debts to settle.

Small Claims Court will help you recover what is owed to you by assessing everything your debtor owns - their assets, savings, investment, etc. and recover certain amounts from these sources. If these assets are not there, there is essentially no source to get the money from.

Why should I opt for Small Claims Court?

Small Claims Court is designed to be more straightforward, quicker, and less expensive than higher courts, making it accessible for individuals without legal training. However, as simple as it seems, there are still complexities to navigate, and having some guidance can make a big difference. Here's why Small Claims Court might be the right path for you and what to consider along the way over other more complex courts.

Simpler Process

The procedures in small claims court are designed to be user-friendly. The rules are less complex, making it easier for individuals without legal training to navigate the system. For instance, forms are straightforward, and hearings are generally informal. 

Take this with a grain of salt, though. When I say simpler, I mean in comparison to court processes in the Superior courts. The law is still a highly complex field. 

Faster Resolution

Small claims cases are typically resolved more quickly than those in higher courts. Because these cases involve smaller amounts of money and fewer legal complexities, they can be scheduled sooner, and hearings often last only a short time. This efficiency allows parties to receive a judgment and move on without lengthy delays, which can be common in the Superior Court.

Reduced Need for Lawyers

While parties can hire lawyers, it’s not always necessary in small claims court. The simplified procedures mean many individuals can effectively present their cases on their own. 

Okay, but, let’s talk about this.

 As much as I’d like to say it's an easy, straightforward, and hassle-free process, it is not. Having legal representation can help ensure that all documents are correctly filled out, filed on time, and that the appropriate evidence is presented in a compelling manner. Lawyers/paralegals are trained to understand the intricacies of the law and can provide valuable advice on the merits of a case, potential defenses, and negotiation strategies.

As an example, the Landlord and Tenant Board (LTB) is also designed to ensure any party can represent themselves. I made so many mistakes in my application, delayed the process, and gained slivers of white hair. I found myself much more confident working alongside a paralegal.

There have been many success stories of landlords representing themselves, don’t get me wrong! I just wasn’t one of them. 

Do I need a lawyer?

Here are some ways you can determine if you need to hire a paralegal or lawyer. Read the simplified guide to suing someone in Small Claims Court. Go through the forms outlined there. How do you feel? 

If you have questions, I’d like you to have the opportunity to obtain some expert advice on your case. At Openroom, I collaborate with legal representatives who specialize in landlord/tenant cases to help you navigate this process. They provide anywhere between 15 to 30 minutes of free legal consultation. 

I do not make any commission from this. I mean it when I say I hope my experience one day becomes unheard of in Canada. 

Lower Costs

The filing fees for small claims court are generally lower than those for higher courts, making it more accessible for people with limited financial means. 

At this point in your legal journey, you’ve lost a lot of money, and you’re still paying to continue the process. Lower fees can go a long way.

Preparing to File a Claim in the Small Claims Court of Ontario

Preparing to file a claim in the Small Claims Court of Ontario can feel overwhelming. At this point, you may or may not be working with a paralegal. Maybe you’re going to fill out the forms on your own and then have a paralegal ensure that everything looks good and ready to go. 

Whatever your circumstances, let’s briefly go through the process.

Gathering Evidence and Documentation

When I first prepared for Small Claims Court, I learned the hard way that thorough documentation is crucial. You need to gather every piece of evidence related to your claim. This includes your lease agreement, rent receipts, photos of property damage, and any correspondence with your tenant.

I recommend creating a timeline of events and organizing your documents chronologically. This approach helped me present a clear, coherent case to the court. Remember, judges appreciate well-prepared plaintiffs who can efficiently present their evidence.

Have a look at what I did

I have a gift for you! 

If you want to see how I arranged ALL my documents in one neat package, you can have my Evidence Package Preparation Template for free.

The purpose of this document is to prepare individuals who have a Court or Tribunal coming up. It’s all about being ready for the day of the hearing. We built this because we’ve heard too many situations where landlords and/or tenants send evidence in inefficient ways that make it unhelpful for everyone. 

Determining the Proper Defendant(s)

Identifying the correct defendant(s) is more complex than you might think. In my experience, it's not always just the tenant's name on the lease. If there are multiple tenants or guarantors, you may need to name them all in your claim.

I once made the mistake of not including a guarantor in my claim, which complicated the enforcement process later. Learn from my error and double-check all relevant parties before filing. If you're unsure, it's worth consulting with a paralegal or lawyer to avoid potential pitfalls.

Calculating the Claim Amount

Calculating your claim amount accurately is crucial. When I first did this, I underestimated some costs and couldn't claim them later. Your claim can include unpaid rent, property damage costs, and even court fees.

Be precise and provide a detailed breakdown of your claim. If you're including future rent loss, make sure to explain your calculation method. Remember, the Small Claims Court has a limit of $35,000, so if your claim exceeds this, you might need to consider other legal options or be prepared to abandon the excess.

Filing a Claim in Ontario's Small Claims Court

Filing a claim in Ontario's Small Claims Court can be a bit overwhelming, but I've been through it and I'm here to guide you through the process. It's not as complicated as it might seem at first, and with the right approach, you can navigate it successfully.

Completing the Plaintiff's Claim Form

The Plaintiff's Claim Form is your first step in the court process. I remember staring at this form, feeling lost. But trust me, it's manageable. You'll need to provide details about yourself (the plaintiff), the defendant (your tenant), and your claim. Be specific about the amount you're claiming and why. I learned that clarity is key here - the court needs to understand exactly what you're asking for and why.

Make sure to include all relevant dates, amounts, and a clear description of the events leading to your claim. If you're claiming for property damage, for example, detail each item and its cost. I once forgot to include the cost of repainting after a tenant's unauthorized "redecoration," and I couldn't add it later. Learn from my mistake!

Paying the Required Court Fees

Court fees are an unavoidable part of the process. The amount varies depending on how much you're claiming, but don't let this deter you. I view it as an investment in protecting my rights as a landlord. You can pay these fees online or in person at the courthouse. If you're filing online, have your credit card ready. If you're going in person, check what payment methods they accept beforehand.

Remember, if you win your case, you can usually add these court fees to the amount the defendant owes you. I always include these in my claim amount now. It's a small detail, but it can add up, especially if you're dealing with multiple cases.

Serving the Defendant(s) with Court Documents

Serving the defendant is crucial - if it's not done correctly, your case could be dismissed. After filing, you'll receive a stamped copy of your claim. This needs to be served to the defendant within 6 months. I've found that hiring a process server is worth every penny. They know all the rules and can provide proof of service, which you'll need for the court.

If you're dealing with a tenant who's moved out and you don't know their new address, don't panic. I once had to get creative and serve a tenant at their workplace. If you know nothing about where your tenant lives or works, you can try skip tracing. 

In essence, skip tracing is detective work focused on finding people who are difficult to locate, using various research methods and information sources. Read the Landlord’s Guide to Skip Tracing to learn more.

If you’re serving the tenant on your own, just make sure you follow the court's rules to the letter. The last thing you want is to have your case thrown out over a technicality in serving documents.

The Small Claims Court Process for Landlords

As a landlord who's been through the Small Claims Court process, I can tell you it's not as intimidating as it might seem. Remember, this is your chance to recoup losses and protect your rental business.

Attending the Settlement Conference

The settlement conference is your first face-to-face encounter in the court process. I remember feeling nervous, but it's actually an opportunity to resolve your dispute without a trial. A judge will mediate this informal meeting between you and the defendant. You'll discuss the issues and explore settlement options.

I've found it helpful to come prepared with a clear idea of what you're willing to accept. Be open to negotiation, but don't feel pressured to settle for less than what's fair. If you can't reach an agreement, the judge will help narrow down the issues for trial and might even provide an opinion on the likely outcome.

Preparing for Trial in Small Claims Court

If your case goes to trial, preparation is key. I learned this the hard way when I wasn't as organized as I should have been for my first trial. Start by reviewing all your documents and evidence. Make copies of everything - the court will need them, and so will the defendant.

Practice presenting your case. I found it helpful to explain my situation to a friend, as it helped me organize my thoughts. Remember, you'll need to prove your case, so make sure you have solid evidence to back up each claim. If you have witnesses, prepare them for what to expect in court.

Presenting Your Case at Trial

On trial day, arrive early and dress professionally. When it's your turn to present, speak clearly and stick to the facts. I was nervous my first time, but I reminded myself that the judge wants to understand what happened, not judge my public speaking skills.

Present your evidence in a logical order, usually chronologically. Explain each document or piece of evidence as you present it. Be respectful, even if the defendant says something you disagree with. You'll have a chance to respond. 

Remember, the judge's decision is based on the evidence presented and the relevant laws, not on emotions or personal opinions.

Enforcing a Judgment from the Small Claims Court of Ontario

Winning a judgment in Small Claims Court is just half the battle. 

Now, with a court order from Small Claims Court, you can finally enforce the decision in meaningful ways apart from asking the tenant to pay you what is owed. There are two ways you can recover arrears owing to you - through Garnishment and/or writ of seizure.

Understanding Enforcement Options

After you win your case, the court doesn't automatically collect the money for you. I learned this the hard way when I naively thought the money would just appear in my account. In reality, it's up to you to take action. 

One option is a writ of seizure and sale, which allows the sheriff to seize and sell the debtor's property. Another is garnishment, where you can claim money from the debtor's wages or bank account. 

Requesting a Writ of Seizure and Sale

A writ of seizure and sale sounds dramatic, and it can be. It gives the sheriff the power to seize and sell the debtor's property to pay your judgment. I've used this method when I knew my former tenant owned valuable assets.

To get a writ, you need to file a request with the court. It's then sent to the sheriff's office. Remember, the sheriff won't automatically act on the writ - you need to provide them with information about the debtor's assets. 

This can be tricky, but it's where your detective skills come in handy. I once tracked down a tenant's vehicle information, which led to a successful seizure.

Examination Hearing

An examination hearing can be a crucial tool when enforcing a judgment proves challenging. This process is particularly useful when you're unable to locate a former tenant's assets or employment information. It's essentially a court-ordered interview that allows you to question the debtor about their financial situation.

To initiate an examination hearing, you must file a request with the court. Upon approval, the debtor is served with a notice to attend. During the hearing, you'll have the opportunity to inquire about their income, expenses, assets, and debts. 

It's advisable to prepare a comprehensive list of questions beforehand. Be thorough in your inquiries - cover topics such as bank accounts, employment, vehicles, and any other potential sources of income or assets.

It's important to note that the debtor is under oath during this process. Failure to appear or refusal to answer questions can result in them being found in contempt of court. The potential legal consequences often encourage debtors to cooperate or even propose a payment plan. 

While an examination hearing doesn't guarantee immediate payment, the information gathered can be invaluable for future enforcement efforts, providing a clearer picture of the debtor's financial situation and potential avenues for recovery.

Garnishing Wages or Bank Accounts

Garnishment is an effective method for recovering money owed, particularly when dealing with employed tenants or those with a steady income. This approach has proven especially valuable in cases where tenants are working but refusing to fulfill their financial obligations.

Garnishment is covered in more detail in How to enforce an LTB order in Small Claims Court. Read it to get a proper grasp on the process.

To initiate wage garnishment, you must obtain information about the debtor's place of employment. For bank account garnishment, you'll need the debtor's banking details. Once you've gathered this information, you submit a notice of garnishment to the court. 

This notice is then served to the debtor's employer or bank, who are legally obligated to withhold a specified portion of the debtor's wages or funds for your benefit. While this process may not yield immediate results, it often provides a consistent and dependable means of recovery once established.

Concluding Thoughts

If there’s one thing I’ve learned from this whole process, it’s that being prepared is everything. Small Claims Court isn’t a magic fix, but it’s a solid step in getting back what’s rightfully yours, whether it’s unpaid rent or property damage. I’ve made plenty of mistakes along the way (trust me, more than I’d like to admit), but each one has been a lesson in how to navigate this system better. If you’re a landlord in Ontario dealing with tenant issues, take a deep breath—you’ve got this! 

Feel free to reach out to me. My bi-weekly newsletters come directly from me. I respond to subscribers’ comments and questions there. I’d love to hear from you.

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