Lease Assignment (LTB)
15. The Tenants were entitled by section 95 of the Act to assign their lease to another tenant with the approval of the Landlord. The Landlord had the right to refuse the assignment to a potential assignee. However, s.95(5) of the Act states that “[a] landlord shall not arbitrarily or unreasonably refuse consent to an assignment of a rental unit to a potential assignee”.
16. From the uncontroverted evidence presented at the hearing, it appears that the Landlord did act unreasonably in systematically refusing consent to every proposed assignment that was presented to him. Since the Landlord already had post-dated rent cheque payments in hand, he obviously saw little incentive to cooperate with the process of finding a new tenant.
17. The Tenants appeared to have been unaware of their right under s. 95(4) of the Act to terminate the tenancy on 30 days’ notice whenever the Landlord refused to accept a proposed assignee. Be that as it may, I conclude that the Landlord failed to comply with s. 95(5) of the Act and that the facts establish that he would have been unlikely to accept any assignee that was presented by the Tenants.
10. The primary purpose of the assignment provisions of the Act is to ensure that tenants have an avenue to legally end their tenancy when some sort of unexpected event occurs that leaves them unable to give proper notice or complete the lease term. The other possible avenue to resolve this problem is a consent agreement to terminate between the landlord and the tenant; but if a landlord refuses consent, assignment is the tenant’s only option other than abandonment.
11. That is why subsection 95(1) gives tenants the right to assign their rental unit. This right to assign is subject to the landlord’s consent. Where the landlord refuses consent the tenant has the right to terminate the tenancy on 30 days’ notice.
12. Where the requested consent is to assign to a specific named individual, the Act gives additional rights to the requesting tenant. Subsection 95(5) says that a landlord shall not arbitrarily or unreasonably refuse consent to a potential assignee. So where a tenant goes to the trouble of finding a replacement tenant, the landlord has a positive obligation to act reasonably in response. At a minimum, this means giving the potential assignee an opportunity to apply for the rental unit.
13. Here, although the Landlords stated he was welcome to apply at the same time as other prospective tenants, they were not willing to consider him as a potential tenant until the Tenant gave the full 60 days’ notice and terminated her tenancy. As the primary purpose of the assignment provisions is to help tenants avoid that result, this was not a reasonable response on the part of the landlords. Rather they should have asked the tenant to get NH to fill out their standard application form and screened him as a potential tenant.
14. Where a landlord unreasonably refuses consent to assign to a tenancy to a specific prospective tenant like here, the Tenant has an additional right. She can file an application with the Board pursuant to s. 98(1). That is what the Tenant has done here.
15. So given all of the above, I am satisfied that the Landlords unreasonably refused consent to assign to NH.
11. The Landlord’s evidence is that AD did not provide information requested by the Landlord’s agent, BP, including a completed rental application, which would detail AD’s identity, employment and income, etc. AD asked for and received a copy of the Landlord’s standard lease agreement and application. Some discussion took place, including of the clause that postdated cheques be provided ‘as a courtesy’. BP then discovered AD was already under an agency agreement with another agent, and as such, he could not discuss anything further with him until that agreement was up, the next day. BP felt that AD’s responses were vague, he was trying to negotiate the terms before applying for the unit and did not provide asked for information. As such, the Landlord decided not to enter into any further discussions with AD and on December 9, 2014, informed AD by email “thanks for your interest, but we won’t be exploring this further with you at this time.”
12. I am unable to conclude that the Landlord arbitrarily or unreasonably refused to assign the unit to AD. The issue of post-dated cheques was raised in AD’s email, so were other issues. The Landlord determined on the basis of the initial communications that AD was not a suitable candidate. AD did not appear as a witness. As such, the best evidence before me of the communications between the parties and the reason they did not proceed to an offer or agreement is the direct evidence of the Landlord’s witnesses.
6. On February 2, 2015, the parties executed an Assignment Agreement (Exhibit 5), and the Tenant paid the required $150.00 fee to the Landlord to cover the advertising and administrative costs involved in the assignment of the unit. The Tenant alleges, and the Landlord did not dispute this evidence, that, on February 2, 2015, he was told to advertise the unit at a monthly rent of $1,145.00 and to “forget about [his] lease”.
9. The Landlord’s representative submitted that Exhibit 5 shows that the Landlord consented to the assignment of the unit. The Landlord’s representative further submitted that Section 95 of the Residential Tenancies Act, 2006 (the ‘Act’) does not state that a landlord cannot place conditions on its consent to an assignment and, as such, it was not unreasonable for the Landlord to insist that a prospective assignee sign a tenancy agreement for one year at a higher monthly rent.
10. The Tenant’s claim is that, by demanding that the unit be advertised at a higher rate and requiring AS to sign a new tenancy agreement for one year, the Landlord arbitrarily or unreasonably refused his request to assign the unit.
12. Subsection 95(8) says, in part: “If a tenant has assigned a rental unit to another person, the tenancy agreement continues to apply on the same terms and conditions and… the assignee is liable to the landlord for any breach of the tenant’s obligations… if the breach or obligation relates to the period after the assignment…” (emphasis added)
14. Based on the evidence presented, while I find that on the surface, the Landlord clearly was agreeable to providing its consent to assign the unit, the fact that the Landlord insisted on a higher monthly rent and required that AS execute a new one-year tenancy agreement as part of the condition for assigning the unit, in my view this had the same effect as if the Landlord had not granted consent to assign the unit.
15. I find that by imposing the higher monthly rent and the requirement that a prospective assignee sign a new one-year tenancy agreement, the Landlord, in essence, unreasonably withheld consent to the assignment of the unit.