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RTA - Special and Exempt - Joint Business/Residential

. Zeta Psi Elders Association of Toronto v. Kavanaugh

In Zeta Psi Elders Association of Toronto v. Kavanaugh (Div Court, 2022) the Divisional Court endorsed the 'predominant purpose' test for RTA 5(j) 'Joint Business/Residential Accomodation' exception to the application of the RTA:
[1] Sean Kavanaugh appeals the decision of the Landlord and Tenant Board dated September 23, 2021 holding that the Residential Tenancies Act, 2006, S.O. 2006, c.17 did not apply to his tenancy because of the exemption in s. 5(j) of the Act. That section provides that the Act does not apply with respect to “premises occupied for business or agricultural purposes with living accommodation attached if the occupancy for both purposes is under a single lease and the same person occupies the premises and the living accommodation”.

[2] The Board found that the predominant purpose of the tenancy between the parties was to operate a business - namely, an Airbnb short-term rental business - in the residential premises. Therefore, the Board held that the exemption in s. 5(j) of the Act applied.

[3] An appeal lies to this Court only on a question of law (see s. 210(1) of the Act).

[4] The appellant has not demonstrated any error of law. The Board applied the predominant purpose test, which is the correct legal test (see Tauro v. Yu, 2018 ONSC 7319 (S.C.J.) at para. 33). Essentially the appellant challenges the findings of fact that the predominant use of the premises was for an Airbnb business and the Airbnb business was the appellant’s only source of income.


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Last modified: 02-04-23
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