“Pay to Say”: The Controversial New Rule Blocking Tenants From Court (Unless They Pay Up)

Bill 60 Deep Dive: The Ultimate Guide for Ontario Landlords, Tenants, Buyers, and Sellers

Bill 60, formally known as the Fighting Delays, Building Faster Act, 2025, has officially shaken up the landscape of rental housing in Ontario. Whether you are a seasoned investor, a first-time renter, or someone looking to buy or sell a tenanted property, these changes are not just “fine print”—they fundamentally alter your rights, timelines, and financial obligations.

This comprehensive guide breaks down every critical aspect of the new legislation, offering detailed analysis, practical scenarios, and checklists to keep you compliant and protected.

What is Bill 60?

At its core, Bill 60 was introduced by the Ontario government with the stated aim of “reducing red tape” and clearing the massive backlog at the Landlord and Tenant Board (LTB). For years, both landlords and tenants have suffered from wait times that can stretch to 8-12 months for a simple hearing.

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While the goal of speed is universally appreciated, the methods used in Bill 60 have sparked intense debate. The legislation aggressively shortens timelines for evictions and limits certain tenant defenses, tilting the procedural balance significantly.

The 4 Key Changes You Must Know

1. The “Cash for Keys” Trade-Off (N12 Compensation)

Old Rule: If a landlord wanted to move into their unit (or move a family member in), they had to give 60 days’ notice and pay the tenant 1 month’s rent as compensation.
New Bill 60 Rule: Landlords can now avoid paying the 1-month compensation if they provide a longer notice period of 120 days (4 months) instead of the standard 60 days.
- Note: This specifically applies to Section 48 (Landlord’s Own Use).
- Strategy: This creates a “Time vs. Money” decision for landlords. If you are cash-poor but have time, you can save money. If you need the unit fast, you pay the compensation for the 60-day exit.

2. “Pay to Say” (Rent Arrears Hearings)

Old Rule: If a landlord filed for eviction due to unpaid rent (L1 application), the tenant could show up at the hearing and raise “new issues” like maintenance problems or harassment to explain why they withheld rent.
New Bill 60 Rule: Tenants can no longer raise these issues at an arrears hearing unless they:
1. Provide advance written notice.
2. Pay 50% of the alleged rent arrears into the Board or to the landlord before the hearing can proceed with those arguments.
- Impact: This effectively bars tenants who are withholding rent due to severe disrepair (and have spent the money on repairs or other needs) from using that defense without a significant upfront payment.

3. The 7-Day Eviction Clock (N4 Notice)

Old Rule: If a tenant missed rent, the landlord gave an N4 notice. The landlord had to wait 14 days after the notice was served before they could file an application with the LTB.
New Bill 60 Rule: The waiting period has been slashed to 7 days.
- Impact: This cuts a week off the eviction timeline. If rent is due on the 1st and unpaid, an N4 can be issued on the 2nd, and the LTB filing can happen as early as the 9th or 10th.

4. Slashed Appeal Windows

Old Rule: Parties had 30 days to appeal an LTB decision to the Divisional Court or request a review.
New Bill 60 Rule: The appeal window is reduced to 15 days.
- Impact: You must have your legal counsel and paperwork ready immediately after a decision is rendered.

Pros and Cons Analysis

For Landlords

Pros	Cons
Faster Cash Flow Recovery: The 7-day filing window means you get into the LTB queue faster when rent goes missing.	Strict Procedural Compliance: Shorter timelines mean zeromargin for error. If you mess up a date on a 7-day notice, the LTB will toss your case, and you start over.
Reduced Frivolous Defenses: The “50% payment rule” stops tenants from using maintenance complaints solely as a stall tactic during non-payment hearings.	Marketability Risks: Using the 120-day notice to save money might turn off potential buyers who want vacant possession quickly (more on this below).
Cost Savings: Saving one month’s rent on N12 evictions can amount to $2,000 – $4,000 in savings for patient landlords.	Public Perception: The “Pay to Say” rule is controversial; aggressive use may damage your reputation or lead to tenant activism/rent strikes.

For Tenants

Pros	Cons
Longer Move-Out Time (Option): If a landlord chooses the compensation waiver route, you get 4 months (120 days) to find a new home instead of just 2.	Financial Barrier to Justice: If you withheld rent because your heat was broken, you now need to come up with 50% of that back rent just to have your day in court.
Clearer Timelines: The crackdown on delays might mean that if you file a T6 (Maintenance) application, you actually get heard faster than before.	Speed of Eviction: The 7-day N4 period leaves very little time to seek help from rent banks or social services before legal action starts.
	Loss of Compensation: You may lose that critical 1-month rent payment that often served as a moving deposit for your next apartment.

Real-World Scenarios

Scenario A: The “Patient” Landlord

Situation: Sarah owns a condo downtown. Her daughter is graduating university in 5 months and needs the unit.

Action: Sarah serves an N12 notice now, opting for the 120-day termination date.

Result: Sarah does not have to pay her tenant the standard $2,800 compensation. The tenant gets 4 months to find a place, and Sarah saves nearly $3,000.

Scenario B: The “Emergency” Repair Defense

Situation: Mark, a tenant, stops paying rent because his roof is leaking and destroying his furniture. He owes $4,000 in back rent.

Bill 60 Impact: The landlord files for eviction. Mark wants to show photos of the roof at the hearing. The adjudicator asks, “Have you paid $2,000 (50%) of the arrears?” Mark has not.

Result: Mark is blocked from raising the maintenance issue as a defense against the eviction. The eviction for non-payment is likely granted, and Mark must pursue a separate (and later) application for the roof.

Critical Advice for Buyers and Sellers of Tenanted Properties

This is the most complex area of the new bill. The distinction between Landlord’s Own Use (Section 48) and Purchaser’s Own Use (Section 49) is vital.

For Sellers

The “Compensation Trap”: If you are selling a tenanted property, do not assume you can waive the compensation for the buyer. The legislation specifically amends Section 48 (Landlord’s Own Use). It is legally risky to assume this applies to Section 49 (Purchaser’s Own Use).
Recommendation: If your buyer wants vacant possession, stick to the standard 60-day N12 and pay the compensation. Using the 120-day rule to save a few thousand dollars could spook a buyer who doesn’t want to wait 4 months to close.
Marketing: If you have a long closing (e.g., 5-6 months), you might be able to use the 120-day notice before listing or early in the process to clear the unit cost-effectively, but consult a paralegal first.

For Buyers

Closing Dates: If you are buying a tenanted property for your own use, demand a standard 60-day N12. Do not let the seller try to save money with the 120-day notice unless you are perfectly happy waiting 4+ months to move in.
Vacant Possession Clauses: Ensure your Agreement of Purchase and Sale (APS) has a strict clause requiring the Seller to provide vacant possession. With the new appeal window shortened to 15 days, you will know sooner if a tenant is fighting the eviction, allowing you to walk away or renegotiate faster.

Actionable To-Do Lists

For Landlords

[ ] Update Your Forms: Ensure you are using the newest versions of N4 and N12 forms that reflect Bill 60 changes. Old forms may be considered defective.
[ ] Audit Your Arrears: If a tenant is late, issue the N4 on day 2. Mark your calendar for Day 8 to file the L1 application (down from Day 15).
[ ] Budget for Legal: If you plan to use the 120-day notice, verify with a legal professional that your specific scenario qualifies for the compensation waiver.

For Tenants

[ ] Don’t Withhold Rent: Under Bill 60, withholding rent is riskier than ever. Pay your rent, and file a separate T6 (Maintenance) application immediately if repairs are needed.
[ ] Act Fast on N4s: If you receive a 7-day notice, contact a rent bank or legal clinic immediately. You have half the time you used to have.
[ ] Check the Notice: If a landlord gives you 120 days notice and doesn’t pay compensation, make sure they are actually moving in. If they re-rent it or sell it, you can file a T5 (Bad Faith) application for significant damages.

Conclusion

Bill 60 is a double-edged sword. It offers speed and cost-saving potential for landlords but demands rigorous adherence to new, tighter schedules. For tenants, it strips away financial leverage and safety nets, making “paying rent on time” the only safe harbor. Whether you agree with the politics or not, understanding these rules is the only way to survive in Ontario’s new rental reality.

Bill 60 protest video This video provides visual context on the public reaction and protests regarding Bill 60, highlighting the intensity of the debate surrounding these changes.

🚨 Critical Action: Are Your New Notices Legal?

Bill 60 has eliminated your margin for error. The new 7-day N4 timelines and the complex N12 compensation waivers mean a single mistake on paperwork can lead to your LTB application being dismissed—forcing you to start over, or worse, facing substantial bad-faith fines.

Don’t rely on outdated templates or guesswork. Ensure your documentation is 100% compliant with the new Fighting Delays, Building Faster Act before you file.

Protect Your Investment: Book a Bill 60 Compliance Audit

Click below to schedule a rapid, 15-minute audit with a licensed paralegal specializing in Ontario landlord-tenant law.

We will confirm if:

Your 7-day N4 is properly timed and served.
Your 120-day N12 compensation waiver is legally applicable to your scenario (Section 48 vs. Section 49).
Your selling strategy complies with the new purchaser use rules.

Protect your legal right to the unit and save thousands in potential compensation and fines.

[ CLICK HERE TO ENSURE COMPLIANCE NOW ]