Notice Law - N12 (Landlords Own Use (Family))
- 1 Residential Tenancies Act, 2006
- 2 TSL-62768-15-RV2 (Re), 2015 CanLII 100191 (ON LTB)
- 3 TST-94128-18 (Re), 2018 CanLII 123282 (ON LTB)
- 4 TSL-80642-16 (Re), 2017 CanLII 28814 (ON LTB)
- 5 CEL-61051-16-RV (Re), 2016 CanLII 100338 (ON LTB)
- 6 NOL-01991-10 (Re), 2010 CanLII 48821 (ON LTB)
- 7 TSL-08570-10 (Re), 2010 CanLII 76079 (ON LTB)
- 8 MacDonald v. Richard 2008 CarswellOnt 638
- 9 TEL-92093-18 (Re), 2018 CanLII 113210 (ON LTB)
- 10 Personal Use Applications
- 11 Compensation v. Betterment in Awarding Damages
- 12 Defects in the N12
48 (1) A landlord may, by notice, terminate a tenancy if 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 by,
- (a) the landlord;
- (b) the landlord’s spouse;
- (c) a child or parent of the landlord or the landlord’s spouse; or
- (d) a person who provides or will provide care services to the landlord, the landlord’s spouse, or a child or parent of the landlord or the landlord’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.
- (2) The date for termination specified in the notice shall be at least 60 days after the notice is given and shall be the day a period of the tenancy ends or, where the tenancy is for a fixed term, the end of the term.
- (3) A tenant who receives notice of termination under subsection (1) may, at any time before the date specified in the notice, terminate the tenancy, effective on a specified date earlier than the date set out in the landlord’s notice.
- (4) The date for termination specified in the tenant’s notice shall be at least 10 days after the date the tenant’s notice is given.
- (5) This section does not authorize a landlord to give a notice of termination of a tenancy with respect to a rental unit unless,
- (a) the rental unit is owned in whole or in part by an individual; and
- (b) the landlord is an individual.
48.1 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 the landlord gives the tenant a notice of termination of the tenancy under section 48.
56 Where a rental unit becomes separately conveyable property due to a consent under section 53 of the Planning Act or a plan of subdivision under section 51 of that Act, a landlord may not give a notice under section 48 or 49 to a person who was a tenant of the rental unit at the time of the consent or approval.
10. It is my belief that the Legislature intended to use the term “residential occupation” in section 48 of the Act to apply to those situations where the rental unit will either be lived in by the landlord or becomes incorporated into the landlord’s main living quarters. If a landlord is living in a house in which the basement of the complex is rented out, I am satisfied they are entitled to effectively reclaim use of the entire house by seeking possession of the rental unit for residential storage. It is not uncommon in many single family homes to have the basement used in whole or in part for storage of property owned by its occupants. Where the intended purpose of the rental unit is to become incorporated into the landlord’s main living quarters there is no change of use, it is residential occupation. “Residential occupation” cannot reasonably be restricted in these circumstances to only include that portion of a house used for activities such as sleeping, cooking or entertaining. To suggest otherwise would mean that a landlord would have to effectively abandon the remainder of the house and live solely in the basement in order to establish an intention to use a basement for residential occupation.
17. The law is clear that “residential occupation” as it is used in s.48(1) of the Act (under which the Landlords served the N12) does not include temporary full-time use.
18. The Ontario Divisional Court in the case of MacDonald v. Richard (2008) O.J. 6076 (Ont. Div. Ct.) (“MacDonald”), ruled that temporary full-time occupancy of a residential unit (which in MacDonald was four months) does not constitute “residential occupation” as contemplated in s.48(1) of the Act. MacDonald has been followed by the Board in a number of decisions, including TSL-2128-11; TSL-52712-14; TSL-62689-15; TSL-76374-16; and TSL-80318-16.
15. I agree with the Tenant that vacancy does not change the status of a residential unit. If the Landlord had used the vacant units for a purpose that was not residential (storage of the Landlord’s property, for example), the status of the units may have changed. However, choosing to keep units unoccupied does not, in itself, convert the units from residential to otherwise. Residential units may remain residential whether they are occupied or not. Thus, there continue to be four residential units in the residential complex.
16. This interpretation is also consistent with the objective of the Act. In Matthews v. Algoma Timberlakes Corp.,  O.J. No. 2710 (C.A.) (‘Matthews v. Algoma’), the Court of Appeal states, at paragraph 22: “Given the remedial nature of the [Residential Tenancies] Act, its provisions must be interpreted liberally to ensure the realization of its objectives.” At paragraph 32, the Court concludes: “The purpose of the legislation is to provide protections to tenants.”
1. The basic facts of this case are undisputed. The Landlord entered into an agreement with his employee and was supposed to transfer a half interest in the property to his employee. This change or addition to title of a second owner was supposed to be completed on November 1, 2016.
2. The application was filed on September 15, 2016 prior to the planned change in title.
3. At the review hearing, it was confirmed that the sale of a half interest in the property or addition to title did not occur. The employee does not want to buy a portion of the property unless he is sure he can move into it. The Landlord's Legal Representative stated the planned sale of a half interest in the property is on hold until the review request is resolved.
13. The Member’s determination in paragraph 16 of the order that section 49 of the Act was intended to apply to a situation where the property was fully sold and the Landlord would no longer be the owner of the property is a reasonable interpretation of section 49. Since the property has not been sold, the requirements of section 49 have not been met.
18. Even if the review were granted and I interpreted section 49 in a different manner than the hearing Member, relief from eviction under section 83 of the Act would be granted in the current circumstances of this case. The potential addition of a second owner to title is tentative and uncertain at this point in time.
It is ordered that:
1. The Landlord’s review request is denied.
2. On the date that the Notice To Terminate a Tenancy at the End of the Term For Landlord's or Purchaser's Own Use Form N12 was served to the Tenant, the applicant Landlord had already purchased the residential complex and was already the ‘Landlord’.
3. The Landlord had not entered into and agreement of purchase and sale at the time notice of termination (for use by the purchaser’s spouse) was served to the Tenant.
4. The Landlord’s notice of termination is defective.
4. In Wiazek v. Arnstrong  O.J. No. 2737 (Gen. Div) involved a case where the Landlord wanted the house to store his personal possessions but planned to continue to live in his girlfriend’s house and would therefore only be at his own house part of the time. The court dismissed the landlord’s own use application as the landlord would not be residing on a full time basis.
1 For purposes of this decision we will accept, without specifically deciding, that the standard of correctness will apply, as that is the standard more advantageous to the appellant. We are of the view that the Review Decision by Member Ellacott on June 19, 2007 that "temporary full-time occupancy for four months does not constitute the purpose of residential occupation as contemplated by the Residential Tenancies Act, 2006" is correct. That conclusion is supported by case law directly on point that has held that a landlord is not entitled to evict an existing tenant in order to provide accommodation for his daughter on summer break from university: Wiazek v. Armstrong, (1994) O.J. No. 2737 (Ont. Gen. Div.) . See also, McDonald v Smith, (1993) O.J. No. 1680 (Ont. Gen. Div.) . It is also an interpretation that is consistent with the intention of the legislation, which is remedial in nature and directed towards the protection of tenants, including protecting the security of tenure for tenants. Accordingly, this appeal is dismissed. Costs fixed at $ 1000.00 payable by the appellant.
4. AS says that her son in good faith requires possession of the rental unit for the purpose of residential occupation.
5. On any application before the Board the person who makes an allegation has the burden of leading sufficient evidence to establish that it is more likely than not that their version of events is true. In this case that burden falls on the Landlords. For the reasons that follow, I find that the AS has led insufficient evidence to establish that her son genuinely requires possession of the rental unit for the purpose of residential occupation.
18. Based on the evidence before me, I am satisfied that the Landlord increased the rent from $1,300.00 to $1,600.00 in September 2017. The Landlord failed to provide any documentary evidence to support her testimony and failed to effectively challenge the Tenant’s testimony under cross-examination. The Tenant provided the Board with several pieces of documentary evidence to support his testimony and he presented his testimony in a detailed and consistent manner. I find the Tenant’s testimony to be credible.
19. It is important to note that, by increasing the rent from $1,300.00 to $1,600.00, the Landlord violated several sections of the Act including section 110, subsection 111(1), subsection 116(1) and subsection 120(1).
28. Based on the evidence before me, I am satisfied on the balance of probabilities that the Landlord served the notice of termination in retaliation for the Tenant exercising his legal right not to pay an illegal rent increase.
29. Subsection 83(3)(c) of the Residential Tenancies Act, 2006 (the 'Act') says “without restricting the generality of subsection (1), the Board shall refuse to grant the application where satisfied that …”the reason for the application being brought is that the tenant has attempted to secure or enforce his or her legal rights”. [Emphases added]
Personal Use Applications
13. The obligation of the Board in considering applications for Landlord’s own use is to consider the circumstances of each case in relation to the criteria laid out by the leading cases of the Divisional Court:
- Beljinac v. Salter 2001 CanLII 40231 (ON SCDC), (2001) O.J. No. 2792 (Div. Ct.), (“Salter”) when referring to Justice Steele’s reasons in Feeney v. Noble (1994), 19, O.R. (3d) (Div. Ct.), stated that:
- “…the test of good faith is a genuine intention to occupy the premises and not the reasonableness of the landlord’s proposal.” And in the more recent decision of Fava v. Harrison, 2014 ONSC 3352 (CanLII) the Divisional Court, in considering this issue in the context of the Act found as follows:
- “We accept, as reflected in Salter, supra, that the motives of the landlord in seeking possession of the property are largely irrelevant and that the only issue is whether the landlord has a genuine intent to reside in the property. However, that does not mean that the Board cannot consider the conduct and the motives of the landlord in order to draw inferences as to whether the landlord desires, in good faith, to occupy the property.”
1. Edward E. Macko, a tenant of 19 years at the above address, received a notice of termination of tenancy from his landlord Mary Wasik. The notice indicated that the landlord had entered into an agreement of purchase and sale and that the purchaser, Paul P. Soultanis, was going to move into the above address. Paul P. Soultanis did not move into the above address.
9. The question that remains is whether Landlord Mary Wasik can be held liable for the dishonesty of purchaser Paul P. Soutanis.
20. Each party to the real estate transaction got something. The landlord/ vendor received money, or the promise of money. The purchaser got the property. The tenant, who was not a party to the real estate transaction, received a notice of termination.
21. The Tenant Protection Act protects the tenant in this scenario. It is up to the landlord / vendor to protect herself when the purchaser enlists the landlord / vendor for service of the notice of termination. Perhaps some sort of warranty that survives closing should be obtained from the purchaser to the effect that the purchaser shall save harmless the vendor from the consequences of applications such as this. There may be other approaches. The real estate bar will figure something out.
22. The salient fact is that the tribunal will hold the landlord / vendor liable for the bad faith of the purchaser in these circumstances.
4. "Bad Faith” may be defined as “… the opposite of ‘good faith,’ generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfil some duty or some contractual obligation, not prompted by honest mistake as to one’s rights or duties, but by some interested or sinister motive.” Term ‘bad faith’ is not simply bad judgment or negligence, but rather implies the conscious doing of a wrong because of dishonest purpose or moral obliquity ….”: See Black’s Law Dictionary, 6th Ed. St. Paul: West Publishing (1990), p. 139.
13. On any application before the Board, the burden rests on the applicant to prove their case on the balance of probabilities. In this case, the Tenants must prove on a balance of probabilities that they were given the notice of termination in bad faith, and moved out because of the notice of termination and the Landlord did not move into the unit within a reasonable time after the Tenants moved out.
26. The evidence before me suggests on a balance of probabilities that what the Landlords really wanted to do was to raise the rent and to raise it unlawfully, and that they served the N12 as a means of obtaining more income from the rental unit when the Tenant refused to accept the Landlords’ demand for an illegal rent increase.
27. I do not accept Landlord S.T.’s evidence that he only wanted to meet with the Tenant to understand her intentions going forward and that he never discussed the rent. His testimony is inconsistent with his January 16, 2017 email to the Tenant which states the following:
- “We sincerely appreciate your loyalty as one of our most valued residents and as a token of our appreciation, we are pleased to provide you with the lease renewal options and incentives. I appreciate your patronage and would like to speak with you about a new term and a new lease.”
28. I also do not accept the Landlord S.T.’s evidence that the Tenant’s email dated January 25, 2017 was an attempt to entrap him in the future. If the email was not an accurate reflection of Landlord S.T.’s intention regarding the rent, it would be reasonable to assume that he would have clarified the issue, particularly for an individual he described as a valued resident. Instead, he responded on January 26, 2017 with, “I will send you my answer with regard to the unit soon.” The following day the Landlords served the Tenant with a N12 notice.
29. For these reasons, I am satisfied that the notice was given in bad faith.
 In our view, it is clear from the Member’s reasons, read as a whole, that the Member did not misstate the law in MacDonald nor did he decide the outcome of this case solely on the basis of MacDonald. The Member correctly stated s. 48(1) of the Act and the test in that section that applied. The Member further referred to the cases cited in MacDonald, and to other Board cases, in which occasional occupation of a unit by a landlord’s family was held not to be sufficient to displace a tenant. The Member then applied the principles from those cases to the facts before him to conclude that the proposed intermittent use of the unit by Sedat did not entitle the Landlord to terminate the existing tenancy pursuant to s. 48(1) of the Act.
Compensation v. Betterment in Awarding Damages
22. Rent differential should reflect the additional rent that the Tenants have to pay but it should not require the Landlords to pay for any betterment in housing. One could argue that here there was no betterment because the Tenants no longer have a single family home where their family can all live together. On the other hand, the Tenants and their family now have two kitchens which is one more than they had before. Given all of the circumstances here it seems to me that a fair rent differential amount would take into account this additional kitchen, apportion a value to that kitchen and deduct it from the differential awarded.
Defects in the N12
4. Section 48 of the Residential Tenancies Act, 2006 (‘the Act’) sets out that a Landlord may terminate a tenancy if the Landlord in good faith requires possession of the rental unit for the purposes of residential occupation by the Landlord. The section goes on to specify that the termination date on the Notice to Terminate at End of the Term for Landlord’s or Purchaser’s Own Use (Form N12) must be at least 60 days after the notice is given and must be the day a period of the tenancy ends.
5. The Landlord testified that the tenancy is month to month, and rent is due on the first of every month. This means the period of the tenancy is monthly, and the period of the tenancy begins on the first day of the month and ends on the last day of the month. Therefore, to be in compliance with section 48 of the Act, the termination date on the Landlord’s N12 notice must be the last day of the month. In this case, as the termination date of the notice was not the last day of the month, the notice is in contravention of section 48 of the Act.
9. Section 48.1 of the Act states that a landlord must compensate a tenant in an amount equal to one month’s rent or offer the tenant another rental unit acceptable to the tenant if the landlord gives the tenant an N12 notice of termination of the tenancy under section 48.
10. Section 73.1 of the Act sets out that if a landlord compensates a tenant under section 48.1 after serving a notice of termination under section 48, and the Board refuses to grant the landlord’s application for an order terminating the tenancy and evicting the tenant based on the notice, the Board may order that the tenant pay back the compensation to the landlord.
11. In this case, I am satisfied that the Landlord compensated the Tenant as per section 48.1.
12. If the facts before me were that the Tenant was still in possession of the rental unit and the application was being dismissed because of invalidity of the N12 Notice, I would order the Tenant to refund the compensation to the Landlord. However, in this case, I am satisfied that the Tenant vacated on February 4, 2018, as a direct result of being served with the N12 notice. This is established by the fact that she contacted the Landlord on January 23, 2018 to advise that she could not move out by February 1 as demanded by the N12, but managed to secure new accommodations and vacated within the first week of February 2018. In my view, the intent of section 48.1 is to require a landlord to pay the tenant compensation equal to one month’s rent where the landlord obtains vacant possession of the rental unit for the purpose of residential occupation. That is exactly what happened in this case, and the Tenant is entitled to keep the compensation she was given by the Landlord.
13. I do not agree that just because the Tenant did not vacate by the termination date in the N12 (flawed as it may be), it follows that the Landlord is entitled to a refund of the compensation paid to the Tenant. There is nothing in the Act to support such an interpretation. In fact, the Tenant was entitled to stay in the rental unit past the termination date on the N12 notice and await a hearing of the Landlord’s application. The N12 notice itself indicates that the tenant may choose not to voluntarily move out of the rental unit by the termination date and can instead require the landlord to file an application at the Board and prove the merits of their claim at a Board hearing. Tenants who exercise this right do not lose their entitlement to compensation pursuant to section 48.1 of the Act.