Simon's Megalomaniacal Legal Resources

RTA - Bad Faith Compensation [RTA s.57]

. Akbari et al. v. Blenkinsop et al.

In Akbari et al. v. Blenkinsop et al. (Div Court, 2024) the Divisional Court considered (and dismissed) a 'landlord's' appeal. I parenthesize the term 'landlord' because that's a primary issue in the case, as the appellant was not the landlord as the common law understands that, but rather another tenant (I'll refer to them here as the 'appellant') - and only a landlord by virtue of the RTA definition [s.2 "landlord", (a)], which reads:

“landlord” includes,

(a) the owner of a rental unit or any other person who permits occupancy of a rental unit, other than a tenant who occupies a rental unit in a residential complex and who permits another person to also occupy the unit or any part of the unit,

(b) the heirs, assigns, personal representatives and successors in title of a person referred to in clause (a), and

(c) a person, other than a tenant occupying a rental unit in a residential complex, who is entitled to possession of the residential complex and who attempts to enforce any of the rights of a landlord under a tenancy agreement or this Act, including the right to collect rent; (“locateur”)

During the course of the LTB proceedings, the Board found "that the Appellant had permitted the tenants to occupy the rental unit with the knowledge of the Landlords" [para 10], and thus presumably that the category that the appellant fell under was "any other person who permits occupancy of a rental unit". As well, the building owners - although they were parties - did not attend either at the LTB or the court level. The case isn't clear on this and my best guess is that this other tenant was acting as a property manager [para 5,11].

The appellant issued a 'personal possession' termination [RTA s.48] on behalf of the owners, and in that "identified himself on the Notice as both 'a Landlord and a Representative'" [para 6], and the tenants then vacated without an LTB application. When the tenant's subsequently learned that the property was listed for sale (within one year), they applied to the LTB for a "Bad Faith Application with the LTB pursuant to s. 57", which is a recently-passed tenant-compensation provision applying to several categories of terminations, including that for personal possession termination under RTA s.48. There is an evidentiary provision [RTA 57(5)] that renders the 'listing the property for sale within one year' as creating a rebuttable presumption that the termination was in 'bad faith' .

The result of the s.57 compensation application was that the LTB held that the appellant was legitimately acting for the owners and ordered "that both the Landlords and the Appellant were jointly liable to pay compensation to the tenants in the amount of $7, 253" [para 12]. A review (reconsideration) was conducted but resulted in no change in the order. Subsequently, the appellant commenced this Divisional Court RTA s.210 appeal, to which the owners were non-participating parties. The appellant argued - unsuccessfully and solely - that the Board erred in law "by finding him jointly liable, pursuant to s. 57 of the RTA, for serving the Eviction Notice in bad faith because the LTB did not analyze the separate roles and responsibilities of the Landlords and the Appellant ..." [para 17]:

[30] For the reasons that follow, the appeal is dismissed. There is no requirement in the RTA for the LTB to adjudicate and apportion responsibility and liability as between multiple Landlords in the event of a breach of the s. 48 of the RTA.

[31] Section 1 of the RTA states as follows:

The purposes of this act are to provide protection for residential tenants from unlawful rent increases and unlawful evictions, to establish a framework for the regulation of residential rents, to balance the rights and responsibilities of residential Landlords and tenants and to provide for the adjudication of disputes and for other processes to informally resolve disputes. 2006, c. 17, s. 1.

[32] The balancing of rights referenced in this section is between residential Landlords and Tenants. It is, specifically, not a statute designed to address the balancing of rights between multiple Landlords with respect to a specific residential unit.

[33] Nowhere in this consumer protection legislation is there language requiring the LTB to make such inquiries and determine issues as between multiple Landlords.

[34] If the legislation required the LTB to make an inquiry and determination with respect to determining and apportioning responsibilities and liability as between multiple Landlords, as part of an inquiry to determine whether there has been a breach of s. 48 of the RTA, the RTA would clearly and unequivocally state this. It does not.

[35] As well, such a statutory scheme runs contrary to the general purpose of the legislation. For example, it would require tenants who file a bad faith application pursuant to s. 57 to participate in a process that could stretch out extensively beyond a finding a violation of s. 48 in order for the Tribunal to apportion responsibility and liability among multiple Landlords.

[36] Such a process could be factually complicated and legally lengthy. It could involve extensive evidence determining contractual rights and responsibilities between any number of Landlords with respect to a specific property.

[37] There are also numerous other methods or processes to apportion liability among multiple Landlords, including, but not limited to, contractual arrangements between Landlords who are owners and their agents, such as the Appellant. In many (if not most) instances that would involve the hearing of evidence with respect to the contractual relationships between Landlords. In many instances, the Tenants would have no knowledge of any such contracted arrangements.

[38] The purpose of s. 202 of the RTA is to assist the Tribunal in determining the real nature of the relationship between Landlords and Tenants. It is not to require the Tribunal to determine the relationship between multiple Landlords in the event of a breach of the RTA.

[39] Had the legislature mandated that the LTB address and apportion responsibility for breaches of s. 48 of the RTA, it would have been an error in law for the LTB not to undertake such an inquiry. However, as this requirement is not mandated or directed by the RTA, there can be no error of law due to a failure of the LTB to make such an inquiry and determination.