What happens if I miss rent or break my lease early?

This is general information only and not legal advice. Landlord–tenant rules vary by province and territory.

1. Your landlord’s process (notices, tribunals, regaining possession, relisting)

If you stop paying rent or leave early, your landlord may follow the legal steps available in their province/territory. In many parts of Canada, this involves:

1. Formal notices
   1. Your landlord serves a written notice for non-payment of rent or for ending the tenancy early.
   2. The notice will usually state how much you owe and by what date you must pay or move out.
2. Application to a housing/tenancy tribunal or court
   1. If the issue isn’t resolved, your landlord may apply to the local residential tenancy authority or tribunal (for example, the Landlord and Tenant Board in Ontario) to:
      1. End the tenancy, and/or
      2. Get an order for unpaid rent and regain possession of the unit.
3. Regaining possession of the unit
   1. Once a decision or order is issued (if required), your landlord follows the process to legally regain possession of the unit.
4. Relisting and re-renting
   1. After they regain possession, your landlord will typically relist and try to re-rent the unit.
   2. Any loss of base rent that falls within your Padder policy’s terms and limits may form part of a claim to Padder.

This legal process is between you and your landlord.

2. When Padder may reimburse the landlord

Padder may reimburse your landlord only if all of the following are true:

• There is an active Padder policy (Padder Guarantor or Padder Deposit) that matches your lease, and
• You are in lease default under that lease (for example, unpaid base rent, early break, failure to move in, abandonment, or unpaid last month’s rent), and
• Your landlord has followed the required legal process in your province/territory and can show a covered loss under the policy.

3. What communication to expect from Padder

If your landlord makes a claim involving your tenancy, Padder will:

• Contact you directly by email (and sometimes phone), and
• Explain:
  • What your landlord is claiming
  • Which period and how much base rent is involved
  • Whether the claim is approved, declined, or still under review

If a claim is approved and paid:

• Padder will confirm the amount paid to your landlord.
• Under your indemnity agreement, you then owe that amount to Padder, instead of owing it directly to your landlord.

You won’t be left guessing—Padder will outline what’s happening and what it means for you.

4. How to work with Padder to get back on track

If you’ve missed rent, broken your lease early, or know you’re at risk, the best thing you can do is stay engaged.

Do:

• Respond quickly to emails or calls from your landlord and from Padder.
• Provide context (job loss, emergency, timing issues) so we understand what’s going on.
• Share proof of any payments you’ve made if there’s confusion about what’s outstanding.

If Padder has paid your landlord under your policy:

• We’ll talk with you about repayment options, which may include:
  • A lump-sum repayment, or
  • A structured repayment plan designed around what’s realistically affordable for you.

Ignoring the situation is the worst option:

• If you don’t respond to Padder and don’t engage in a plan, your account may be sent to collections or pursued through other allowed remedies.