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RTA - Personal and Purchaser Possession


Part 2

. Elkins v. Van Wissen

In Elkins v. Van Wissen (Ont CA, 2023) the Court of Appeal considers (and allows) an appeal from an earlier Divisional Court RTA s.210 appeal on an RTA 57(1) ['Former tenant’s application where notice given in bad faith'] compensation application, resultant from an earlier s.49(1) purchaser possession Notice of Termination.

In these quotes the court focusses on the temporally-variable aspect of the mandatory s.49 'bad faith' assurances:
[1] In Ontario, the law permits landlords to evict tenants to allow the landlord, or certain members of the landlord’s family, to move in. The law extends such “own use” eviction power to purchasers, but the eviction must be made in good faith.

[2] Section 49(1) of the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (the “RTA”), empowers a landlord who has entered into an agreement of purchase and sale to, in certain circumstances, give a tenant a notice terminating the tenancy on behalf of the purchaser, if the purchaser “in good faith” requires personal possession of the residential rental unit. And, pursuant to s. 57(1)(b), the Landlord and Tenant Board (the “Board”) may make certain orders if it determines, among other things, that the landlord gave a s. 49 termination notice “in bad faith”.

[3] This appeal addresses the following questions. Where a landlord terminates a tenancy pursuant to s. 49(1) of the RTA: (1) how is the Board to determine whether the landlord acted in bad faith within the meaning of s. 57(1)(b); and (2) must the Board assess the purchaser’s good faith requirement in s. 49(1) when making that determination?



[23] As noted, the Vendor Landlords gave the Tenants a notice terminating their tenancy pursuant to s. 49(1) of the RTA.

[24] Section 49(1) stipulates that a landlord may, “on behalf of the purchaser”, give notice terminating the tenancy, “if the purchaser in good faith requires possession” of the rental unit for residential occupation. It reads as follows:
49(1) A landlord of a residential complex that contains no more than three residential units who has entered into an agreement of purchase and sale of the residential complex may, on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession of the residential complex or the unit for the purpose of residential occupation by,

(a) the purchaser;

(b) the purchaser’s spouse;

(c) a child or parent of the purchaser or the purchaser’s spouse; or

(d) a person who provides or will provide care services to the purchaser, the purchaser’s spouse, or a child or parent of the purchaser or the purchaser’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located. [Emphasis added.]
[25] The Tenants’ T5 Application was made pursuant to s. 57(1)(b) of the RTA, the relevant parts of which read as follows:
57(1) The Board may make an order described in subsection (3) if, on application by a former tenant of a rental unit, the Board determines that,


(b) the landlord gave a notice of termination under section 49 in bad faith, the former tenant vacated the rental unit as a result of the notice or as a result of an application to or order made by the Board based on the notice, and no person referred to in clause 49 (1) (a), (b), (c) or (d) or 49 (2) (a), (b), (c) or (d) occupied the rental unit within a reasonable time after the former tenant vacated the rental unit;

... [Emphasis added.]
[26] Under s. 57(3), the Board may make orders that include requiring the landlord to pay the tenant certain sums, abate rent, and pay administrative fines to the Board. Section 57(3) also empowers the Board to make any other order it “considers appropriate”. It reads:
(3) The orders referred to in subsection (1) are the following:

1. An order that the landlord pay a specified sum to the former tenant for all or any portion of any increased rent that the former tenant has incurred or will incur for a one-year period after vacating the rental unit.

1.1 An order that the landlord pay a specified sum to the former tenant as general compensation in an amount not exceeding the equivalent of 12 months of the last rent charged to the former tenant. An order under this paragraph may be made regardless of whether the former tenant has incurred any actual expenses or whether an order is made under paragraph 2.

1.2 An order that the landlord pay a specified sum to the former tenant for reasonable out-of-pocket moving, storage and other like expenses that the former tenant has incurred or will incur.

2. An order for an abatement of rent.

3. An order that the landlord pay to the Board an administrative fine not exceeding the greater of $10,000 and the monetary jurisdiction of the Small Claims Court.

4. Any other order that the Board considers appropriate.

B. The Board Errors

[39] In my view, the Board made the following three errors on questions of law: (1) it erred in its approach to determining whether, pursuant to s. 57(1)(b) of the RTA, the Vendor Landlords acted in bad faith in giving the s. 49 Termination Notice; (2) it erred by failing to consider the Purchasers’ good faith, as required by s. 49(1); and (3) it failed to grapple with the evidence and the issues necessary for resolution of the T5 Application.

(1) Incorrect approach for determining bad faith under s. 57(1)(b)

[40] The Tenants’ T5 Application was brought pursuant to s. 57(1)(b) of the RTA. Section 57(1)(b) required the Board to determine whether the Vendor Landlords gave the s. 49 Termination Notice “in bad faith”. The Board decided that matter based on a single consideration: at the time the Vendor Landlords served the s. 49 Termination Notice, the Vendor Landlords said they had “no reason not to believe it was the [Original] Purchasers’ intention for a family member to move into the unit”. This is an unduly narrow approach for determining bad faith under s. 57(1)(b) and, in my view, amounts to an error of law. My view rests on a contextual interpretation of ss. 49(1) and 57(1)(b). It is buttressed by a consideration of Board jurisprudence on this matter.

(a) A contextual interpretation of ss. 49(1) and 57(1)(b)

[41] The modern approach to statutory interpretation requires that the words of ss. 49(1) and 57(1)(b) “be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27, at para. 21, quoting Elmer Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87.

[42] The RTA and its predecessor are remedial legislation with a tenant protection focus: Honsberger v. Grant Lake Forest Resources Ltd., 2019 ONCA 44, 431 D.L.R. (4th), at para. 19; Price v. Turnbull’s Grove Inc., 2007 ONCA 408, 85 O.R. (3d) 641, at para. 26. The purposes of the RTA are set out in s. 1. The first purpose listed is “to provide protection for residential tenants from…unlawful evictions”. To ignore events after a landlord gives a tenant a s. 49 termination notice limits the Board from fulfilling its responsibility to determine bad faith under s. 57(1)(b) and undermines the RTA’s stated purpose of providing tenants with protection from unlawful evictions.

[43] On a plain reading of ss. 49(1) and 57(1)(b), the landlord’s conduct is linked to the purchaser’s good faith. Section 49(1) permits the landlord to, on behalf of the purchaser, give the tenant a termination notice so long as the purchaser, in good faith, requires possession of the rental unit for the purpose of residential occupation. Section 57(1)(b) requires the Board to determine, among other things, whether the landlord gave the s. 49 termination notice in bad faith. When ss. 49(1) and 57(1)(b) are read together, it is clear that the object of those provisions is to prevent the sale of a property from being used to unlawfully evict a tenant. Accordingly, the Board must consider all the evidence before it that is relevant to the landlord’s bad faith under s. 57(1)(b). It is an error of law for the Board to restrict its consideration to the evidence at the point in time when the landlord gives the tenant a s. 49 termination notice. This case makes that point.

[44] As a result of artificially narrowing the assessment of bad faith to when the s. 49 Termination Notice was given, the Board failed to consider that, after the notice was given but before the sale of the Property closed, the Vendor Landlords and/or their lawyer knew that title to the Property would be taken in the name of Embleton Homes Inc., a corporation. A corporation cannot personally occupy a residence for residential purposes. This information must surely be relevant to the Board’s determination of the Vendor Landlords’ bad faith under s. 57(1)(b).

[45] It could be argued that s. 57(1)(b) implicitly limits Board scrutiny to the landlord’s knowledge when it gives the s. 49 termination notice. However, such an interpretation runs afoul of s. 202(1) of the RTA. Under s. 202(1), the Board is required, when making findings on an application, to ascertain the “real substance of all transactions and activities relating to…a rental unit and the good faith of the participants”. Limiting the assessment of a landlord’s bad faith to that single point in time when the s. 49 termination notice is given precludes the Board from both ascertaining the true substance of the transaction between the landlord and the purchaser and conducting a fair assessment of their good faith.

[46] As Board member Lynn Mitchell stated in CET-67272-17 (Re), 2017 CanLII 70040 (Ont. L.T.B.), at para. 20:
20. [L]imiting the question of good faith to an exploration of the mind of the Landlord at the instant of serving the N12 notice, and to ignore all the surrounding circumstances, would lead to results inconsistent with the objects of the Act. To require the Tenant to establish what was in the mind of the Landlord at the instant of the N12 notice service, without regard to the surrounding circumstances and to the behaviour of the Landlord between the service of the N12 notice and the termination date, would upset the balance of interests which the Act aims to achieve. The good faith obligation attaching to an N12 notice must surely survive the instant of its service.
(b) Board jurisprudence

[47] Other Board decisions similarly demonstrate a broader approach to the bad faith inquiry under s. 57(1)(b), one that considers the parties’ conduct prior to, at the time of, and subsequent to the giving of the s. 49 termination notice. As I have explained, this broader approach results in a fairer, more meaningful assessment of bad faith in s. 57(1)(b) and accords with the purpose of the RTA to prevent unlawful evictions.

[48] One such case is TST-94914-18 (Re). There the Board found bad faith on the part of the landlords on facts arising after the s. 49 termination notice had been given. The tenants contested their eviction, and the Divisional Court issued a stay of eviction. The purchaser then advised that she could not complete the sale. Despite this, the landlords had the sheriff enforce the eviction when the stay was lifted. The landlords ultimately sold the property to a different buyer. The Board found that, while the landlords had not acted in bad faith when they served the s. 49 termination notice, they did act in bad faith in enforcing the eviction order with knowledge that the sale to the original purchaser had no prospect of closing.

[49] Below, the Divisional Court considered TST-94914-18 (Re) but declined to apply its reasoning on the basis that it could be distinguished from this case. I agree that the two cases differ factually. However, those factual differences do not account for the different legal approaches taken in determining bad faith under s. 57(1)(b). For the reasons given above, in my view, the approach taken by the Board in TST-94914-18 (Re) in determining bad faith is correct in law whereas the approach taken in this case is not.

[50] At para. 22 of Duarte v. 2132338 Ontario Ltd., 2021 CanLII 146522 (Ont. L.T.B.), a Board decision issued after the decision was rendered in this case, the Board stated:
22. [I]n relaying the Purchaser’s intentions to terminate the tenancy, the Landlord does not serve as a mere messenger with no duties or obligations to the Tenants. By conveying the Purchaser’s stated intention to occupy the rental unit, the Landlord initiated events that had the serious consequence of ending the tenancy and compelling them to relocate their family…As a result, I find that the Landlord had a duty to the Tenants to exercise some due diligence to confirm the good faith intentions of the Purchaser before putting the eviction in motion. Otherwise, an unscrupulous purchaser would be free to use a landlord as a straw man to divest tenants of their housing and thereby evade the statutory protections afforded to them under the Act.
[51] I agree.
. Grewal and Eilers v. Nukkala

In Grewal and Eilers v. Nukkala (Div Court, 2023) the Divisional Court, in allowing an appeal, clarified that the burden of proof for personal possession terminations lays on the landlord:
The LTB erred in law

[8] Paragraph 31 of the LTB decision states that "…the Tenants here must lead sufficient evidence to establish it is more likely than not the Landlord did not give the Tenants the N12 notice of termination in good faith." This is an incorrect statement of the law. As counsel for the LTB notes in his factum: “It is the Landlord, as the applicant, who bears the burden of establishing on the balance of probabilities that the Landlord in good faith requires possession of the rental unit for the purpose of residential occupation for a period of at least one year in accordance with section 48(1) of the Act.”

[9] This erroneous statement of the law was also expressed by the Member while hearing the evidence. For example, during the cross-examination of the Landlord, the Chair stated that “the burden of proof is on the tenant to provide evidence that the landlord does not intend to move into the rental unit.” This caused the Tenants’ representative to move on in his examination.

[10] Counsel for the LTB submits that despite the erroneous statement of the law, the LTB nevertheless applied the correct test in paragraphs 36-38 of the decision. At paragraph 36 the LTB said that “with the evidence before me and on the balance of probabilities I prefer the evidence submitted by the landlord.” I draw no comfort from that language as, earlier in the decision, at para. 33, in describing the civil standard of proof on a balance of probabilities, the LTB stated: “Here, in my view, the Tenant’s evidence has not met the required standard.” This clearly placed the burden on the Tenant and undermines the LTB’s assessment of the evidence on “the balance of probabilities” in paragraph 36.

[11] Further, in paragraph 37 of the decision, the LTB rejected a suggestion by the Tenant that undermined the Landlord’s assertion that she would live in the unit for one year. In doing so, the LTB failed to appropriately consider the veracity of the Landlord’s position. Additionally, in paragraph 38, the LTB dismissed a submission by the Tenant when it stated that it did not lead to a conclusion that the Landlord did not “genuinely intend to move into the rental unit.” This supports the conclusion that the LTB put the burden on the Tenant to rebut the Landlord’s assertions rather than subjecting the Landlord’s evidence to scrutiny.
. Zarei v. Afsharian

In Zarei v. Afsharian (Div Court, 2023) the Divisional Court considered that a landlord's termination for personal possession - where they wanted possession for purposes of a sale, was not valid:
[9] In addition, I am not persuaded that there is an arguable injustice in the LTB’s substantive disposition of this case when account is taken of the appellants’ version of events. On the appellants’ version, they sought to oust the tenants from the premises for resale of the home and they resorted to a claim that they wanted the premises for their personal use to achieve this goal. This is not a proper use of a claim for personal use of leased premises.

[10] It appears that the premises was re-let for a higher rent, as found by the LTB, and then subsequently sold. The tenants could have remained in the premises until sale and until a subsequent purchaser had a valid “personal use” claim to recover the premises. The tenants left the premises on the basis of the landlord’s recourse to an “own use” application during the summer of 2021, when COVID-19 conditions made relocating more difficult, and the tenants now find themselves in less desirable premises at higher rent. In all the circumstances, if the landlords had been present at the hearing and given their account of events, it appears that the result of the hearing would have been the same.
. Schram v. Thompson

In Schram v. Thompson (Div Court, 2022) the Divisional Court emphasized the need for cross-examination of sworn evidence, particularly when the RTA required a sworn statement from the intended occupant that they require the premises [for 'personal possession' termination under s.72]:
[34] The RTA, s. 183, provides that the Board must adopt the “most expeditious method of determining” a matter that gives all parties an opportunity to “know the issues and be heard on the matter.” Where evidence can affect the outcome of a decision involving a person’s housing, a tenant should be able to test that evidence by cross-examination: Manikam v Toronto Community Housing Corporation, 2019 ONSC 2083 at para 44. Implicit in this principle is that the evidence must be sworn evidence given orally or in an affidavit.

[35] In considering an unsworn, untested statement from the Landlord that her son had moved into the unit and in failing to give the Tenant the ability to cross-examine on that evidence, the Board did not give the Tenant a right to be fully heard. Further, the Landlord’s statement did not establish the date on which her son had begin to occupy the unit – a critical issue in light of the Board’s stay order made immediately following the Tenant’s eviction. The Board evidently missed this point: if the son began to occupy the unit after the Board’s stay order, then the son’s occupancy, itself, was arguably a breach of the Board’s stay order and an abuse of process.

[36] This breach of the requirements of procedural fairness is starker when s.72(1) of the RTA is considered. It provides:
The Board shall not make an order terminating a tenancy and evicting the tenant in an application under section 69 based on,

(a) a notice of termination given under section 48… unless the landlord has filed with the Board an affidavit sworn by the person who personally requires the rental unit certifying that the person in good faith requires the rental unit for his or her own personal use for a period of at least one year….
The Act is express that sworn evidence was required from the proposed occupant. Fairness required that sworn evidence be provided by the Landlord. The Board proceeded based on an unsworn statement from the Landlord and nothing from the occupant.

[37] In all the circumstances, we conclude that the Tenant was denied procedural fairness when the Board accepted and relied solely upon the Landlord’s unsworn statement to find that the Landlord’s son was occupying the unit. For this reason alone, the Board’s decision on remedy cannot stand.


[43] On the basis of these facts, the Landlord abused the process of the Landlord Tenant Board to obtain the initial order terminating the tenancy. There is no evidence that the unit was occupied at the time the Board made its stay order on March 13, 2020 and it is likely that the landlord re-leased the unit to C.C. in 2020 in breach of the Board’s stay order.

[44] If a third-party tenant, without notice of these circumstances, was in possession of the unit today, the Tenant could not be restored to the unit without displacing that subsequent tenant. In such a case, issues could arise about the Board’s jurisdiction to oust the subsequent tenant in favour of the original tenant, and the test for exercising such jurisdiction, if it exists. They do not arise in this case. Where an alleged occupant is not a tenant, but is a family-member occupant, and the alleged occupation is either a ruse or a tactic to further a landlord’s abuse of the process of the LTB, the Board has jurisdiction pursuant to SPPA, s. 23(1) and RTA, s. 31(1)(f), to order that the tenant be restored to the unit. That is this case.

[45] The Tenant may be entitled to other remedial orders as a consequence of the Landlord’s abuse of process and the Tenant’s consequent dispossession from his home since March 2020 – a period of more than 2.5 years during which the Tenant says he has had to live in a shelter. We are not positioned to grant additional remedial orders on the record before us, nor does justice require that we do so because of the effect of ongoing delay. We remit this issue back to the Board.
. Elkins v. Van Wissen

In Elkins v. Van Wissen (Div Ct, 2022) the Divisional Court had a nasty case of bait-and-switch against tenants. During a landlord sale, an N12 [Notice to Terminate at End of Term for Landlord's or Purchaser's Own Use] was issued purporting to require the purchaser's occupation of the premises, but then - 10 days before closing - the purchaser's lawyer delivered notice of an assignment of the sale to a corporation. The tenants, having voluntarily vacated the premises shortly after closing, then filed a T5 [Landlord gave a Notice of Termination in Bad Faith], which they lost at the LTB [see para 13 for essence of these reasons]. On appeal to the Divisional Court the court essentially held that the tenants could not make out the required RTA s.210 'question of law', and so the appeal was dismissed.

The primary mischief of the case seems to lie in the statutory 'switching' of the duty of honesty (and thus the locus of the 'bad faith'), which was initially located on the purchaser at the notice stage [RTA s.49(1): "the purchaser in good faith requires possession of the residential complex"] - and then upon the seller at the application stage [RTA 57(1)(b): "the landlord gave a notice of termination under section 49 in bad faith"] - which the purchaser took advanatage of.

That, and the s.210 'question of law' limitation at the Divisional Court, seemed to put the nails in the tenants' case. However there is no mention of the RTA 202 "real substance of all transactions and activities" provision which applies to all applications, not only termination and eviction applications (of which this wasn't). It may be that a failure of the LTB and the court to consider s.202 may constitute an error of law. Certainly the cost award against the tenants ($6,500) shows little sympathy for them in what appears to be an obvious unfairness in terms of the policy behind the RTA.

Here's the Divisional Court's ruling on the bad faith T5 application:
Issue 1: The T5 Decision

[21] The issue is whether the Member erred in law in dismissing the Appellants’ T5 claim on the ground that they had failed to establish that the Sellers issued the N12 notice in bad faith.

[22] The Member articulated and applied the three-part test set out in s. 57(1)(b) of the RTA. He held that the Tenant must establish all three of the following on a balance of probabilities:
First, that the landlord gave a notice of termination under section 49 of the RTA (the N12 notice) in bad faith;

Second, that the Tenants vacated the rental unit as a result of the (N12) notice or a Board order based on the (N12) notice;

Third, that the Purchaser did not move into the rental unit within a reasonable time after the Tenants vacated.
[23] The Member held that the first part of the test under s. 57(1)(b) requires a consideration of the landlord’s intention when the N12 is given. The change of purchasers under the APS and the title direction took place well after the N12 was given.

[24] The Sellers argue that the Appellants have not raised a question of law on the T5 issue. Rather, at best, what the Appellants argue are mixed questions of fact and law. Further, whatever the intention of the Purchasers, the inquiry under section 57(1)(b) of the RTA was the intention of the Sellers acting as the landlord under the RTA. When the N12 was provided to the Appellants, the Sellers had an APS for the property with people rather than a corporation. The APS had a clause requiring vacant possession so the Purchasers’ family could move in. There was no evidence before the LTB that the Sellers had colluded or were acting on information that would have allowed a finding of bad faith to be made against them when they issued the N12. Their evidence was that at the time of service, they had no reason to disbelieve the Purchasers’ stated intention that vacant possession was required for a family member to occupy the rental unit.

[25] The Appellants argue that the N12 was given in bad faith, as title to the residence was ultimately placed in the name of a corporation, and a corporation cannot personally occupy residential premises. Also, after closing, and after the Appellants vacated the residence, it remained vacant for five months. It was then only occupied for a short time by a relative of one of the directors of the corporate owners. Also, the evidence shows that the Purchasers desired to obtain income from the property. The Appellants submit this permits an inference to be drawn that there was never a genuine intention by the Purchasers to occupy the residence. The Appellants argue the Member ignored the evidence about how the title to the property came to be in the name of a corporation, and that the Purchasers were vague about their intentions for the use of the residence and ultimately what happened to the property. The Appellants assert these facts should have caused the Member to infer that the N12 was given in bad faith.

[26] I do not agree with the Appellants’ argument that the failure of the Board to infer bad faith amounted to an error of law. An appellate court is prohibited from reviewing a lower court or tribunal finding of fact if there was some evidence upon which the decision-maker could have relied to reach that conclusion: Housen v. Nikolaisen, 2002 SCC 33, at para. 1. This principle extends to inferences of fact: General Motors v. Johnson, 2013 ONCA 502, at para. 51. In declining to make the inferences urged by the Appellants, the Member wrote that he had considered all the evidence. There was evidence upon which he could make the finding that he did.

[27] The Appellants also argue that the Member erred in law in restricting his consideration of bad faith to the Seller’s knowledge at the time the notice of termination was given. In support of that argument, Ms. Elkins cited an LTB case - File No. TST-94914-18, 2019 LNONLTB 592 – in which the Board held that the landlord’s duty of good faith extends beyond the time the notice of termination is served. This was the additional issue referred to earlier upon which the parties were invited to make written submissions. Contrary to the submissions of the Respondents, this was not an issue of the panel “going in search of a wrong to right”. It was a circumstance of being alive to an issue raised during the submissions of self-represented individuals and following that issue to a place where logic dictated. TST-94914-18 was not referred to at the Board hearing in the present case – it was under reserve at the time.

[28] In TST-94914-18, Member Solomon held that the landlord’s duty of good faith extends beyond the time the notice of termination is served and found bad faith on the part of the landlord:
22. In many other cases, the Board has found that an unforeseen change in circumstances that results in the person listed in the N12 Notice being unable to occupy the rental unit does not constitute bad faith (see, for example, TST-66921-15, TST-87559-17, TST-80046-16). I agree that this is a case where an unforeseen change of circumstances resulted in CM failing to take occupancy of the rental unit. This change of circumstances was the agreement of purchase and sale falling through. I am satisfied that the Landlords did not foresee this happening when they served the N12 Notice.

23. However, I also agree with the following statement from the Board’s order TST-87742-17-RV, which the landlord submitted: “the Landlord’s obligation to act in good faith extends beyond the time the notice of termination is served”. I take this statement to mean that bad faith is not confined to the moment in time when a landlord gives a tenant an N12 Notice. I find that bad faith can extend to the period between when the N12 Notice was given, and the time when a tenant moves out.
[29] The Appellants characterize the issue as a “bad faith period” and argue that the LTB must consider the sellers’ faith (good or bad) up to the time a tenant vacates. The Sellers countered this argument by submitting several decisions of the LTB which the Board held that only the circumstances at the actual time the N12 is delivered are to be considered.

[30] In my view, TST-94914-18 should be restricted to its own unique facts. In that case, prior to the date the sale of the property was to close, the landlords obtained an eviction order based upon their N12 notice of termination. The tenants appealed the order and obtained a stay from the Divisional Court. As a result of the stay, the landlord was unable to complete the sale on the date set for closing. At some point following the aborted closing, the purchaser advised that landlord he could not complete the sale because he no longer qualified for the same mortgage rate. With knowledge that the sale of the rental unit would not be completed, the landlords asked the sheriff to enforce the writ of possession (the Divisional Court stay had been lifted as a result of the tenants failing to comply with conditions of the stay). The landlord then relisted and sold the rental unit to another buyer.

[31] The Board found that the landlords had not acted in bad faith when they served the N12 notice of termination. The Member accepted that at the time notice was given, the landlord genuinely believed that the purchaser would move into the rental unit following closing. However, she found that the landlords acted in bad faith when they asked the sheriff to enforce the Board’s eviction order knowing that there was no prospect of the sale closing.

[32] In the present case, the sale of the rental unit was alive at the time the Appellants moved out. The Sellers could not have been expected to refuse to close or to get into a dispute with the Purchasers with the potential of litigation. I am therefore unable to accept the Appellant’s argument based upon the decision in TST-94914-18.

[33] The decision on the T5 application focused on findings of fact and the application of a statutory test to the facts as found. Those determinations are ones which members of this specialized tribunal are asked to make regularly. There is no error of law in the Member’s determination that there was no bad faith on the part of the Sellers in giving the Appellants the N12 on March 7, 2018. I would therefore dismiss the appeal of the LTB’sdecision on the T5 application.
. 2212369 Ontario Inc. v. Vora

In 2212369 Ontario Inc. v. Vora (Div Court, 2022) the Divisional Court considered whether a statutory compensatory payment [under s.49.1] in relation to a termination by the landlord for occupation by a purchaser, could be made prior to the service of the notice of termination date:
[7] The relevant portion of Section 49.1 of the Act provides as follows:
49.1 (1) A landlord shall compensate a tenant in an amount equal to one month’s rent or offer the tenant another rental unit acceptable to the tenant if,

(a) the landlord gives the tenant a notice of termination of the tenancy on behalf of a purchaser under subsection 49 (1) or (2);
[8] Section 49.1 makes it mandatory for a Landlord to compensate a tenant if it gives the tenant a notice to terminate under s. 49. It does not specify that the compensation can only be paid after the notice has been given.

[9] Section 55.1 of the Act requires that the compensation be paid prior to the termination date specified in the Notice to Terminate. In this case that condition was satisfied.

[10] There is no provision in the Act that states that the compensation that the landlord is required to pay under s. 49.1 must be paid after the Notice to Terminate is served. Nor were we given any persuasive principled reason why the Act should be interpreted in this manner. In fact, to do so might work an injustice. For example, if a landlord advises a tenant that they will be providing them with a Notice to Terminate under s. 49 and the parties agree that the landlord will pay the tenant their entitlement to compensation prior to the serving of the notice, the Appellant’s submission would allow to the tenant to accept the payment before the notice is served and then demand that the landlord make another payment after the notice is served.
. Riddell v. Huynh

In Riddell v. Huynh (Div Ct, 2021) the Divisional Court granted a tenant's appeal on a 'purchaser possession' termination when the prior landlord had tried several times to evict and the 'sale' was to her brother. At the LTB hearing the landlord (who was pursuing the eviction on behalf of her brother) redacted the purchase price from the APS, and the Board restricted cross-examination on this key issue:
[10] In one area, however, the Board erred in law and the error gave rise to substantive unfairness to the tenant. The critical issue before the Board was the bona fides of the purported sale from the landlord to her brother. As a long line of cases before the Board shows, where the sale transaction is to a close family member, this is a warning sign, or flag, that the transaction may not be genuine. In this case, the unit was not exposed to the open market. No real estate agent was involved. It was a private deal. The agreement of purchase and sale was disclosed, but the price of the transaction was redacted. The appellant requested a complete copy of this critical document. This request was denied by the Board and no proper justification was given for denying this request.

[11] This was no “fishing expedition”. The price was one of the critical indicia to consider in determining the bona fides of the transaction. So were payment terms and financial arrangements that were made to meet those payment terms. Although the prior applications to evict the tenant for “personal use” did not give rise to an issue estoppel or res judicata, they did provide context for the dispute. So, too, did the history of conflict, including evidence adduced by the tenant that the landlord had recently tried to impose another illegal rent increase and had threatened to sell the unit if the tenant did not accede to the improper demand for rent. Just days after this, the landlord purported to agree to the sale to her brother.

[12] There were many “alarm bells” that this was another attempt by the landlord to oust the tenant without a proper justification. The tenant was entitled to test the evidence relevant to this issue, and this included full details of the sale transaction. These were proper questions, the Board erred in disallowing them, and this error may have affected the outcome. If the price and the payment arrangements did not reflect reasonable commercial terms, the inference that the transaction was not genuine would have become more and more irresistible.

[13] On my reading the erroneous ruling respecting full disclosure of the terms of the sale transaction followed as an extension of the Board’s efforts to constrain the appellant’s conduct in the hearing within reasonable bounds. The Board’s discretion is broad in respect to the conduct if hearings, but not so broad as to preclude a party from testing critical evidence on a key issue in dispute.


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Last modified: 10-12-23
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