Notice Law - N12 (Purchasers Own Use (Family))
- 1 Residential Tenancies Act, 2006
- 2 CEL-61051-16-RV (Re), 2016 CanLII 100338 (ON LTB)
- 3 TEL-68199-16-RV-IN2 (Re), 2016 CanLII 52857 (ON LTB)
- 4 CEL-66528-17 (Re), 2017 CanLII 60097 (ON LTB)
- 5 NOT-01191 (Re), 2009 CanLII 77998 (ON LTB)
- 6 TSL-80642-16 (Re), 2017 CanLII 28814 (ON LTB)
- 7 TET-14624-11 (Re), 2011 CanLII 101409 (ON LTB)
- 8 NOL-07603-12 (Re), 2012 CanLII 30318 (ON LTB)
- 9 TSL-76546-16 (Re), 2016 CanLII 71338 (ON LTB)
- 10 Planning Act, R.S.O. 1990, c. P.13
- 11 Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34
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.
- (3) The date for termination specified in a notice given under subsection (1) or (2) 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.
- (4) A tenant who receives notice of termination under subsection (1) or (2) 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.
- (5) 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.
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.
7. Both the Landlord's Legal Representative and the Tenant's Legal Representative agreed that they were not aware of any prior or precedent cases where section 49 of the Act was relied upon to terminate a tenancy where there was not a sale of the full property but only the addition of a second owner to the title.
8. At the review hearing it was confirmed that the purchase price for the half interest in the property would be secured by a promissory note. The employee would not be required to pay the Landlord any amount at the time of the “sale”. This reinforces the unique circumstances of this “sale”.
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.
14. Reasonable determinations and interpretations of the Act are not interfered with on review.
17. The Landlord and the employee seem to want a guarantee that the employee will be permitted to move into the rental unit before they go ahead with the “sale”. There is no guarantee. Even an actual owner may not get the eviction order they are hoping for since it is mandatory for the Board to consider relief from eviction under section 83 of the Act.
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.
2. With respect to the first ground for the review set out above, it would appear that the evidence before the Member was that the purchaser and his large extended family intends to occupy the entire residential complex which is a single family home with a separate basement apartment. The current upstairs occupant and the Tenants share laundry facilities so there are interior connections between the upper part of the residential complex and the lower.
3. The Landlord argues that although the purchaser’s affidavit refers to his grandparents wanting to move into the rental unit that is not actually what is being proposed. The purchaser intends to occupy all of the residential complex and in essence return it to a single family home. It is fair to say the affidavit can be interpreted in that manner.
8. Further, this conclusion is actually a misstatement of the evidentiary question the Member had to explore and answer. This application is not a bad faith application by the Tenants under section 57 of the Act; it is an application by the Landlord under section 69 based on notice of termination served under s. 49(1). That provision says in part:
- 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…
9. This section requires the Board to make findings that:
- The residential complex has three or fewer residential units in it;
- The landlord and a purchaser have entered into a purchase and sale agreement for the residential complex; and
- The purchaser genuinely intends to move into the rental unit.
13. I say this because the Member was required to make a finding that the Landlord and the purchaser had entered into a genuine purchase and sale agreement. The Tenant’s witness is a real estate agent and he testified as to irregularities around the purported sale. The Tenants were attempting to argue that the Landlord was so motivated to get rid of them as demonstrated by the history of failed eviction attempts that she would go so far as to invent a purchaser and a phony purchase and sale agreement. Although the Member was correct in that each application must stand on its own the Tenants were entitled to attack the Landlord’s credibility concerning the genuineness of the purchase and sale agreement; demonstrating the Landlord may have motive to invent the purchase and sale agreement was a strategy that should have been open to them. Refusing to let them do so was a denial of procedural fairness and a serious error.
12. The parties have a month-to-month tenancy which commenced on July 1, 2007. The parties agree than on April 20, 2017 the Landlord served the Tenant with an N12 Notice of Termination for purchaser’s own use with a termination date of June 30, 2017. As noted above, the rental period runs from the 18th to the 17th of the month. Therefore, I find that this notice does not comply with the notice requirements contained in section 49(3) of the Residential Tenancies Act, 2016 because the specified termination date is not the day a period of the tenancy ends.
13. Further, o agreement of purchase and sale or affidavit of the purchaser was submitted in evidence.
14. Without the agreement of purchase and sale, there is no evidence that the Landlord in fact has entered into a sale as required by section 49(1) of the Act.
15. With respect to the absence of an affidavit, section 72(1) of the Act states that:
- The Board shall not make an order terminating a tenancy and evicting the tenant in an application under section 69 based on a notice of termination under section 48 or 49 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.
16. I find that Section 72 (1) of the Act has not been satisfied and the application must be dismissed.
6. Sub-section 49(1) of The Residential Tenancies Act 2006 states: “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”
7. I find that on May 26, 2009 the Landlords had not entered into a confirmed agreement of purchase and sale with respect to the Tenants’ rental unit. The Landlords were not entitled to serve the Tenants with a notice of termination simply because they anticipated a possible sale.
8. I find that the Landlord’s improper notice of termination substantially interfered with the Tenants’ reasonable enjoyment of the rental unit or residential complex for the 43 day period between May 26, 2009 (the date improper notice was served) and July 8, 2009 (the date the Landlords’ improper notice was rescinded).
9. I determine that the Tenants are entitled to a 30% lump sum rent rebate of $254.46. This amount represents 30% of the lawful rent for the 43 day period noted under paragraph 9.
1. At the hearing the Tenant raised a preliminary issue. The Tenant submitted that the residential complex contains four residential units and, as a result, the Landlord was not entitled to serve an N12 Notice of Termination (‘N12 notice’) because s.49(1) of the Residential Tenancies Act, 2006 (the ‘Act’) provides that a Landlord may only serve an N12 for purchaser’s use if the residential complex contains three or fewer residential units.
3. It is uncontested that the residential complex is a house, and that the basement of the house is a residential unit, currently occupied by a tenant. The Tenant lives in a unit on the second floor of the house. It is uncontested that at the time that the N12 notice was served on the Tenant, the only tenants in the house were the Tenant and the basement tenant.
5. The Landlord had leased the main and second floor of the house to an organization (the ‘organization’), who in turn rented rooms on the main and second floor of the house to its clients. At the hearing the Landlord submitted a copy of its lease with the organization, which makes it clear that the intent of the organization is to rent out several units to its clients.
6. It is uncontested that the organization rented the main and second floors of the house as three residential units. The Tenant was a client of the organization and the Tenant’s original tenancy agreement was with the organization.
7. On February 26, 2016, the City of Toronto (the ‘City’) issued to the Landlord an Order to Comply, which required that the Landlord either bring the house into compliance with the legal requirements of a multi-unit dwelling or convert the house into a single-family dwelling.
8. At the time that the Landlord received the Order to Comply, the lease between the Landlord and the organization was in force.
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.
17. In section 2 of the Act, “residential unit” is defined as “any living accommodation used or intended for use as a residential premises” and includes a room in a boarding house.
20. Section 55 creates a two year period after a severance before that severance takes legal effect for the purposes of determining whether a residential complex contains the requisite number of residential units to mandate certain rights for tenants associated with a termination for conversion to non-residential use. In the circumstances of this case, the Tenant should be granted a similar degree of protection as that provided to tenants by s.55 of the Act. Applying the logic of s.55 of the Act and the reasoning in Matthews v. Algoma, I find that because the Landlord formed the intention to convert the two vacant units in the residential complex to non-residential use less than two years prior to serving the N12 notice, these units are still to be treated as residential units as of the date the N12 notice was served.
21. Accordingly, the Landlord’s application must be dismissed because an N12 notice for purchaser’s own use can only be served if the residential complex contains three or fewer residential units.
See Also: Defining a Rental Unit
1. The Tenants moved out of the rental unit because the Landlord gave the Tenants a notice of termination (‘Form N12’) indicating that a purchaser of the residential complex required possession of the rental unit for their own residential occupation.
2. The agreement of purchase and sale relied on by the Landlord to give the Tenants a notice of termination under section 49 of the Residential Tenancies Act 2006, (the ‘Act’) is not an agreement of purchase and sale but rather a lease with an option to purchase.
3. The Landlord knew or ought to have reasonably known that the agreement with the potential purchaser was not an agreement of purchase and sale. Therefore, the Landlord’s notice of termination was given to the Tenants in bad faith.
The residential complex is a two story single family home located in Durham Region.
The Landlord and the Tenants concluded a fixed term tenancy agreement commencing April 1, 2009 and ending on March 31, 2011. A copy of the tenancy agreement was submitted at the hearing and marked as exhibit # 8. The agreed upon rent was $1,350.00 per month.
The Landlord testified that he has acted in good faith and that he legitimately wished to sell the residential complex. After listing the property for sale on the Kijiji classifieds website, he was contacted by the purchasers. An Agreement of Purchase and Sale was eventually concluded on February 20, 2011.
The Landlord explained that the transaction was structured in this fashion because the purchaser was having difficulty qualifying for conventional bank financing. The offer made by the purchaser was the best one available to the Landlord and was therefore accepted by him.
The Agreement by the parties was prepared with the assistance of the Landlord’s lawyer. The Agreement provides for a sale price of $240,000.00 and an extended closing date of March 1, 2013. The purchaser was required to provide the Landlord with a $12,000.00 purchase deposit before occupying the residential complex. According to the Landlord, the purchaser paid $1,000.00 on March 1, 2011. The Tenant was permitted to start moving some of his belongings a few days prior to the “official” move in date of May 1, 2011. The Tenant then paid a further $8,300.00 to the Landlord on May 1, 2011 and $500.00 on May 4, 2011 towards the deposit for a total deposit payment of $9,800.00. The Landlord acknowledged that the amount paid by the purchase as a “deposit” was short of the $12,000.00 required under the terms of the Agreement. The Landlord further advised that the Tenant is currently required to pay $1,400.00 per month “to keep me going” until the transaction closes.
In my view, an option to purchase only becomes an agreement to purchase once the option is exercised. In this regard, the Tenants referred me to a decision of the Ontario District Court, 1803 Renaissance v. Asselstine (February 9, 1989 File # M-175618/89) where the Court considered the distinction between an agreement of purchase and sale and a lease with an option to purchase. His Honour Judge Conant noted that: “The distinction between an option to purchase and an Agreement of Purchase and Sale is that the latter creates a mutual obligations on one party to sell and the other to purchase; whereas, an option merely gives the right to purchase within a limited time without imposing an obligation to purchase. The option is a right acquired by the contract to accept or reject the present offer within a reasonable time in the future, and creates only an equitable, not possessory interest.”
The Landlord insists that the Agreement signed with the purchaser is a binding purchase contract and the Landlord has met all other requirements for giving a notice under section 49 of the Act including the minimum 60 day notice effective on the date a period of the tenancy ends.
The label given to the Agreement signed between the Landlord and the “Purchasers” does not determine its character. In this case, the Landlord has entered into a tenancy agreement with an option to purchase. The Landlord has effectively replaced the Tenants with another set of tenants at great inconvenience to the former.
1. Sub-section 49(1) of The Residential Tenancies Act 2006 states: “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.”
2. On January 29, 2012, the Tenant was served with a Notice To Terminate a Tenancy at the End of the Term For Landlord's or Purchaser's Own Use Form N12. The notice of termination was authored and served to the Tenant by DY. The notice named DY as ‘Landlord’.
3. DY purchased the residential complex from the ‘Vendor’ landlord. The property transfer was completed on February 1, 2012. DY had no status as a ‘Landlord’ on January 29, 2012 and she was not entitled to serve any notices of termination to the Tenant prior to February 1, 2012.
4. The Application to Terminate a Tenancy and evict a Tenant Form L2 is dismissed because the application is based upon an invalid notice of termination.
1. The property at issue has one commercial unit and three residential units. The rental unit is located on the ground floor, at the back of the building. It is a one-bedroom unit.
4. Subsection 49(1) of Residential Tenancies Act, 2006 (the 'Act') requires the Landlords to establish two points to support this application for termination of the tenancy. First, the Landlords must establish that they have entered into an agreement of purchase and sale for the property. Second, the Landlords must establish that the purchaser in good faith requires possession of the property for residential occupation by the purchaser.
17. Salter v. Beljinac, 2001 CanLII 40231 (ON SCDC), (2001) O.J. No. 2792 is the leading case involving a landlord’s own use application under section 48 of the Act. I find that the principle that was established in Salter can be applied to a purchaser’s own use application under section 49 of the Act. According to that case, the test of good faith is the purchaser’s genuine intention to occupy the premises and not the purchaser’s motives that influence that intention.
19. For the following four reasons, I find that the purchases do not in good faith require possession of the property for residential occupation.
20. First, when asked, IJ testified that he had not yet decided which unit he was going to occupy. Section 49 of the Act states that the landlord can serve a tenant with a notice of termination on behalf of a purchaser if “the purchaser in good faith requires possession of the residential complex or the unit”. Therefore, section 49 requires the purchaser to genuinely intend to occupy the entire residential complex (which includes the rental unit) or the rental unit alone. The fact that IJ could not conclusively say that he intends to occupy the rental unit means that one of the fundamental requirements of section 49 is not satisfied. IJ’s testimony also runs counters to the statement in his affidavit that he intends to occupy the property and the unit for his personal use.
21. Second, the Landlord has filed two applications with the Board seeking eviction of the tenants in two of the three residential units in the property. The Tenants testified that they spoke to the tenants in the third residential unit, the largest unit in the building with 3 or 4 bedrooms, and they said that the Landlords have not served them with an N12 Notice of Termination and they are not leaving. The Tenants testified that these main floor tenants are family friends of the Landlords. The Landlords were not present at the hearing. IJ testified that SB is a foreign investor and he lives in Barbados. Still, the Landlords did not submit any evidence of any kind to show that steps have been taken to obtain vacancy from the tenants in the third residential unit. Without this evidence, I find it reasonable to draw an adverse inference that the tenants in this unit have not been evicted. This also leads me to believe that IJ and his family intend to occupy the entire residential property.
22. Third, IJ did not testify about any work he intends to do to the property to convert it to a single-family home or to merge any of the units. Therefore, even if his mother was to occupy a separate unit from him and his wife, one unit would remain empty and there was no evidence before me of what the purchasers intend to do with this unit.
23. Fourth, the Tenants provided the following evidence, which was not disputed by the Landlords or IJ:
- The Landlords have served them with several N12 Notices of Termination over the past 5 years, all of which have been unsuccessful following hearings at the Board; and
- In November, 2015, one month before the agreement of purchase and sale was signed, the Landlords attempted to raise the monthly rent by $100.00, more than the legal guideline provided in the Act. After the Tenants refused, the Landlords raised the rent by a legal amount prescribed by the Act.
24. The Tenants’ evidence, when taken together with the three points I list above, suggest that the purchasers might have alternative reasons for evicting the Tenants unrelated to an intention to personally occupy the rental unit. My consideration of all the circumstances surrounding this tenancy is consistent with the decision in Fava v. Harrison, 2014 ONSC 3352, in which the Divisional Court stated that despite the decision in Salter (referenced above), the Board can “consider the conduct and motives of the landlord in order to draw inferences as to whether the landlord desires, in good faith, to occupy the property”. Although Fava was also decision in the context of a landlord’s own use application under section 48 of the Act, I find that the principle cited above can equally be applied to a purchaser’s own use application under section 49 of the Act.
25. Based on the reasons above, I am not satisfied on a balance of probabilities, that the purchaser in good faith require the residential complex or rental unit for the purpose of residential occupation.
52 (1) No person shall subdivide and offer for sale, agree to sell or sell land by a description in accordance with an unregistered plan of subdivision, but this subsection does not prohibit any person from offering for sale or agreeing to sell land by a description in accordance with a plan of subdivision in respect of which draft approval has been given under section 51.
1 (1) In this Act,
- “conveyance” includes an assignment, appointment, lease, settlement, and other assurance, made by deed, on a sale, mortgage, demise, or settlement of any property or on any other dealing with or for any property, and “convey” has a meaning corresponding with that of conveyance; (“acte translatif de propriété”, “transport”, “transporter”)
- “property” includes real and personal property, a debt, a thing in action, and any other right or interest; (“bien”)
See Also: Defining a Rental Unit