Partial rent payments: what landlords should (and shouldn't) accept

A tenant comes to you with $800 of an $1,400 rent owing and asks if they can pay the rest in two weeks. The instinct to say yes — to preserve the relationship and get something rather than nothing — is understandable. But how you handle that moment determines whether you keep your legal options open or quietly close them.

You are not required to accept partial rent

Ontario's Residential Tenancies Act makes rent due in full on the date specified in the lease. Landlords are not obligated to accept partial payment. That said, the law also does not prohibit accepting it — the question is how you do it, and what you document.

How partial payment affects an existing N4 notice

This is where landlords most often make a costly mistake. If you have already served an N4, accepting a partial payment does not void the notice — but it does change the amount you can claim. The N4 amount must be updated to reflect any payments received. If you later file an L1 and the amount on the N4 is higher than what is actually owing (because you accepted partial payment and didn't record it), the notice may be defective.

• Record every partial payment in the tenant ledger the day it is received.
• If you have a pending N4, note the updated balance — the LTB will ask for a current rent ledger at the hearing.
• Accepting partial payment does not restart the N4 clock or extend the termination date — the original notice remains in effect.
• If the tenant pays the full arrears on the N4 (not just part of it) before the termination date, the N4 becomes void and you must start over if they fall behind again.

Should you accept partial payment before filing an N4?

Before you have served any notice, accepting partial payment is lower-risk — you haven't started a legal process yet, and partial payment moves the balance in the right direction. The main risk is waiting too long while accepting partial amounts: arrears can grow faster than they are being paid down, and each additional month of non-payment adds time to any eventual LTB process.

The LTB's view on trying to work it out first

When an L1 application is heard, the Landlord and Tenant Board takes into account whether the landlord made reasonable efforts to work with the tenant before seeking eviction. A short, documented attempt to negotiate a repayment plan — especially for a tenant with an otherwise clean history — generally reflects well. It is also often faster than an LTB hearing.

Repayment agreements: the right way to formalize a partial payment plan

If you decide to accept partial payments, put a repayment agreement in writing. It should include the total amount owing, the installment schedule, and what happens if the tenant misses an installment. Keep it simple — one page, dated, signed by both parties.

A repayment agreement does not replace your right to serve an N4 if the tenant stops paying. It is a parallel document. If the tenant misses a scheduled installment, you can serve the N4 for the full outstanding balance at that point.

When not to accept partial payment

There are situations where accepting partial payment is likely to make things worse, not better:

• The tenant has a pattern of partial payments stretching over several months with no realistic path to clearing the arrears.
• You are close to a hearing date and accepting payment would complicate the ledger the board is about to review.
• The tenant has told you they are leaving voluntarily — accepting partial rent may complicate the end-of-tenancy accounting.
• The partial amount being offered is very small relative to what is owed, and accepting it would delay the LTB process without meaningfully reducing arrears.

Documenting partial payments properly

Documentation discipline is what keeps you protected regardless of what you decide. Every payment — partial or otherwise — should be recorded the day it is received, with the date, amount, and method. If you provide a receipt (required in Ontario when a tenant requests one), keep a copy. If you have a repayment agreement, keep the signed original. If you have email or text messages where the tenant acknowledged the balance, archive them.

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