To collect unpaid rent in Newfoundland and Labrador, you must register your Residential Tenancies order at the Supreme Court, and then use the Office of the High Sheriff to garnish the former tenant’s wages or bank accounts. Registration and garnishment filing fees generally cost around $100 to $150 CAD.
Understanding Rent Collection in Newfoundland and Labrador
Getting your property back from a non-paying tenant is a relief, but it often leaves you with thousands of dollars in lost income. If you were awarded a money order by the Residential Tenancies Division (RTD) for unpaid rent or property damage, the tenant is legally obligated to pay you. However, whether you own property in Gander, Labrador City, or St. John’s, the RTD does not collect the money for you. A money order is just a formal recognition of the debt; you are solely responsible for enforcing it.
Collecting a debt from a former tenant can be a frustrating game of cat-and-mouse. 🚨 Often, tenants who fall behind on rent will move away without leaving a forwarding address, making it difficult to find them. To actually force them to pay, you must navigate the provincial Judgment Enforcement Act. This law allows you to seize money directly from the tenant’s employer or their bank account, but it requires precise legal steps.
Because tracking down a former tenant and drafting the correct enforcement documents is highly technical, it is highly recommended to seek help. Many landlords in Newfoundland and Labrador hire a commercial law firm to handle their debt recovery. A lawyer has access to resources for “skip tracing” (locating the tenant) and knows exactly how to coordinate with the Sheriff’s office to aggressively pursue your unpaid rent.
Step-by-Step Process in Newfoundland and Labrador
Turning your RTD order into actual cash in your bank account requires utilizing the legal enforcement system. You cannot harass the tenant at their new workplace or take their belongings yourself. Here is the legal step-by-step process for debt recovery.
Step 1: Obtain the Final Money Order
The first step is ensuring you have a final, certified money order from the Residential Tenancies Division. 📄 This document must clearly state the exact dollar amount the former tenant owes you. You must wait until the standard 10-day appeal period has passed, confirming that the tenant has not attempted to appeal the RTD decision to a higher court.
Step 2: Register the Order with the Supreme Court
An RTD order is not automatically enforceable. You must bring your certified RTD order to the Supreme Court of Newfoundland and Labrador. By paying a small administrative fee, you will register the document, transforming it from an agency ruling into an official Judgment of the Court. This is a mandatory step before any legal seizure can occur.
Step 3: Locate the Tenant and Their Assets
You cannot garnish a bank account if you don’t know where the tenant banks. 🔍 Before instructing the Sheriff, you need actionable intelligence. Your lawyer can help you perform “skip tracing” to find the tenant’s new home address or place of employment. If you know the tenant’s bank (perhaps from old rent cheques or e-transfers), this information is incredibly valuable for the next step.
Step 4: Issue a Notice of Garnishment
Once you know where the tenant works or banks, you will file a Notice of Garnishment through the Office of the High Sheriff. The Sheriff will serve this notice to the tenant’s employer or their bank (like CIBC, RBC, or a local credit union). The employer or bank is then legally required to freeze a portion of the tenant’s wages or account funds and send that money to the Sheriff’s trust account, which is then forwarded to you.
Step 5: Seize and Sell Personal Property (Alternative)
If the tenant does not have a traditional job or a bank account, but they own valuable assets, you have another option. You can instruct the Sheriff to seize the tenant’s personal property, such as a vehicle, boat, or recreational equipment. The Sheriff will tow the item away and sell it at a public auction, using the proceeds to pay off your judgment. However, this is only viable if the item has significant equity and isn’t fully financed by a bank.
How Much Does it Cost in Newfoundland and Labrador?
You will need to spend a little money upfront to enforce your judgment, but these enforcement costs are generally added to the total debt the tenant owes you. 💰 Here are the estimated costs in CAD:
| Expense Type | Estimated Cost (CAD) |
|---|---|
| Supreme Court Registration Fee | $30 – $50 |
| Notice of Garnishment (Sheriff Fee) | $50 – $100 per institution |
| Private Skip Tracing (Finding Tenant) | $200 – $500 |
| Lawyer Fees (Enforcement Strategy) | $750 – $2,500+ |
How Long Does the Process Take?
Debt collection is rarely a fast process. If you already know where the tenant works and banks, setting up a garnishment can take about 4 to 6 weeks. However, if the tenant has gone into hiding or changes jobs frequently, it can take 6 to 12 months (or sometimes years) to successfully track down and seize the funds you are owed.
Frequently Asked Questions (FAQ)
How long is my money order valid in Newfoundland?
Once registered with the Supreme Court, a judgment is generally valid for 10 years. If the tenant currently has no money, you can bide your time and garnish their wages years later when they finally get a stable job.
Can I hire a private collection agency?
Yes, you can sell the debt to a private collection agency or hire them to pursue the tenant. However, private agencies can only ask for the money and report it to credit bureaus. Only the Office of the High Sheriff has the legal power to forcibly garnish wages.
Can the Sheriff garnish their entire paycheck?
No. By law, a tenant is allowed to keep a certain portion of their wages to survive (known as the exemption amount). The Sheriff can only garnish a percentage of their net pay, which means it may take several months of small deductions to fully pay off your judgment.
What happens if the former tenant declares bankruptcy?
If the tenant officially files for bankruptcy or a Consumer Proposal, an automatic legal stay is put in place. All garnishments must stop immediately. You will become an unsecured creditor and must file a claim with their Licensed Insolvency Trustee, though you will likely only receive pennies on the dollar.
Can I garnish the tenant’s new landlord to get their damage deposit?
No, you cannot typically garnish funds held by a third party for a specific legal purpose like a new damage deposit. Garnishments are generally restricted to employment income, bank accounts, and accounts receivable.
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