Tenant Broke the LTB Payment Plan? How Ontario’s Section 78 Lets a Landlord Skip the New Notice — and Where It Stops

Section 78 of the Residential Tenancies Act runs on paper: six documents, each one depending on how the one before it was written. If you are about to sit down in LTB mediation, this is the paper trail to read first.

I’m Arthur Zhao, a real estate broker with AZ Real Estate Partners. Picture a landlord waiting while a Board mediator types up the terms a tenant has just agreed to: the arrears paid down in instalments, rent on time every month until the balance is cleared. The landlord is about to be asked to sign, and the dollar figures are the obvious thing to check. This article is about a different line of the draft, and about the five other pieces of paper that will depend on it if the tenant later falls behind.

Section 78 of Ontario’s Residential Tenancies Act gives landlords a way back to the Landlord and Tenant Board without serving a fresh notice of termination. It is narrow by design, and every limit it has is written into a specific document. So rather than walk through the section clause by clause, I will walk through the documents in the order they appear.

Document 1: the original application sets the ceiling

Section 78 is only open to a landlord who previously applied to the Board for an order terminating the tenancy or evicting the tenant. That previous application does more than open the door. Under s.78(1), the conditions in the later settlement or order must be ones that, if the tenant does not meet them, would give rise to the same grounds for terminating the tenancy as were claimed in the previous application. In other words, whatever you put in the original application is the frame the rest of the paper trail has to fit inside.

The original application also decides whether money can come back through section 78. Under s.78(3), a landlord can ask for a payment order in the later application only if two things are true: the previous application asked for arrears of rent or compensation for damaged property, and the settlement or order on it requires the tenant to pay rent, some or all of the arrears, or that compensation. If neither the application nor the settlement put money on the table, the later application is about possession only.

One boundary worth naming: if the original application was for arrears, the tenant’s separate right to pay what is owing and void an eviction order sits in section 74, a different mechanism with its own rules. It is covered in its own article and is not repeated here.

Document 2: the settlement or order, and the one sentence that does the work

Section 194 lets the Board try to settle any matter in an application through mediation or another dispute resolution process. According to the Residential Tenancies Act (2006, as consolidated in 2026), a settlement under that section qualifies for section 78 only if it did two things at once:

• it imposed conditions on the tenant that, if not met, would give rise to the same grounds as the original application; and
• it provided that the landlord could apply under this section if the tenant did not meet one or more of those conditions.

The second bullet is the sentence that is easy to overlook while everyone is negotiating amounts and dates. A settlement can be detailed, signed and fully performed for months and still not support a section 78 application if that clause is missing. The same two requirements apply when the paper is a Board order rather than a mediated settlement.

Two more features of section 194 belong on your radar before signing. First, s.194(2) allows a mediated settlement to contain provisions that contravene the Act, which gives the parties room to agree to terms the Act would not otherwise impose. Second, that latitude has a stated limit in s.194(3): for a rental unit other than a mobile home, a land lease home or a site for either, the largest rent increase that can be agreed to in a settlement is the guideline plus 3% of the previous year’s lawful rent.

Document 3: your affidavit, built from records you keep after signing

Under s.78(2), the application has to include a copy of the settlement or order and an affidavit setting out what conditions were not met and how they were not met. The Board’s L4 instructions handle this as a Form L4 Declaration that must be completed with the application.

If you are also asking for money, s.78(4) adds a list of specifics the affidavit must contain:

• any new arrears that arose after the date of the settlement or order;
• NSF cheque charges from financial institutions and NSF administration charges incurred after that date, to the extent not reimbursed;
• where there was a section 194 settlement, the amounts payable under it for damage, arrears, NSF charges, and reimbursement of the original application fee;
• the rent deposit: its amount, the date it was given, and the last period for which interest was paid;
• the amount and date of each payment made under the settlement or order, and what each payment was for.

That last item is the one to start tracking the day the settlement is signed. A running ledger of each instalment, its date and what it was applied to is the raw material the affidavit is assembled from.

Document 4: the L4 application and its 30-day clock

The application itself is the Board’s L4 form, listed by Tribunals Ontario as Application to End a Tenancy and Evict a Tenant – Tenant Failed to Meet Conditions of a Settlement or Order. According to Tribunals Ontario (2026), L4 is among the applications that can be filed online through the Tribunals Ontario Portal.

Two features of the L4 route come straight from the statute. It is filed without notice to the tenant (s.78(1)), which is what lawyers call an ex parte application. And it has a hard deadline: under s.78(5), it shall not be made later than 30 days after a failure of the tenant to meet a condition. The statute counts from the tenant’s failure, not from the day the landlord notices it or decides to act.

Document 5: the order the Board can issue

If the Board finds the landlord is entitled, s.78(6) lets it make an order terminating the tenancy and evicting the tenant. Where the landlord asked for money and the s.78(3) conditions are met, s.78(7) lets the Board also order payment of amounts such as compensation under section 86, arrears that arose after the settlement or order, allowable NSF charges, and unpaid amounts that were payable under the terms of a section 194 settlement.

Two further powers shape what the final number looks like. Under s.78(7.1), the Board may cancel the previous order and order payment of any amount still unpaid under it. And under s.78(8), the Board shall credit the tenant with any rent deposit and the interest on it that would be owing on termination. The deposit recorded in your affidavit is therefore not only a disclosure item; it is subtracted from what the tenant is ordered to pay.

Document 6: the tenant’s motion to set aside, and where section 78 stops

Because the order was made without notice, the statute gives the tenant a way back in. Under s.78(9), the tenant may bring a motion to the Board, on notice to the landlord, to set aside the order within 10 days after it is issued. Under s.78(10), once the Board receives that motion, the order is stayed and cannot be enforced under the Act or as an order of the Superior Court of Justice while the stay lasts.

After a hearing, s.78(11) gives the Board three outcomes:

• (a) set the order aside if any of the s.78(1) criteria are not satisfied — this is where a missing section 78 clause or a condition that does not match the original grounds surfaces;
• (b) set the order aside if, having regard to all the circumstances, it would not be unfair to do so;
• (c) lift the stay, effective immediately or on a future date the Board specifies.

Under s.78(12), when the Board sets an order aside under clause (b), it may also amend the original settlement or order. So the without-notice route is a fast first step, not a final one: the documents you prepared at Documents 1 through 3 are what gets tested at this hearing.