Notice Law - N12 - (Compensation Under 48.1)

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Date Retrieved:	2024-04-26
CLNP Page ID:	629
Page Categories:	Personal Use Application (LTB)
Citation:	Notice Law - N12 - (Compensation Under 48.1), CLNP 629, <https://rvt.link/9m>, retrieved on 2024-04-26
Editor:	MKent
Last Updated:	2024/03/18

Residential Tenancies Act, 2006

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.

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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.

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55.1 If the landlord is required to compensate a tenant under section 48.1, 49.1, 52, 54 or 55, the landlord shall compensate the tenant no later than on the termination date specified in the notice of termination of the tenancy given by the landlord under section 48, 49 or 50. 2017, c. 13, s. 9; 2020, c. 16, Sched. 4, s. 8.

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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.

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83 (4) The Board shall not issue an eviction order in a proceeding regarding termination of a tenancy for the purposes of residential occupation, demolition, conversion to non-residential rental use, renovations or repairs until the landlord has complied with section 48.1, 49.1, 52, 54 or 55, as the case may be. 2017, c. 13, s. 17; 2020, c. 16, Sched. 4, s. 17 (1).

D'Angelo v Chamberlain, 2021 CanLII 139416 (ON LTB)

1. On January 22, 2021, the Landlords served a N12 notice with a termination date of March 31, 2021. The Tenant did not vacate the rental unit. The Landlords filed a L2 application on February 26, 2021.

2. At the hearing on July 28, 2021, the Tenant raised two preliminary issues: (a) the service of the N12 upon which this application was based; (b) the compensation required by sections 48.1 of the Residential Tenancies Act, 2006 (the 'Act'). My interim order of August 10, 2021 addressed both of those issues. I directed that the Landlords produce Mr. Little and the person who served the N12, Gerald Finton, and identified the issue as to whether the Landlords had provided compensation to the Tenant as required by the Act.

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23. Consistent with subsection 73(1) of the Act, it is my view that where a landlord provides monetary compensation in connection with an aborted attempt to secure vacant possession of a rental unit pursuant to section 48, the tenant is obliged to return the compensation and it constitutes a liquidated debt owing by the tenant to the landlord that can be recovered by the landlord through legal process.

24. What the Landlords purport to have done in this case is rely on waiver of the liquidated debt owing to them by the Tenant as a result of the aborted N12 as the compensation required by section 48 in connection with the second N12 they served in January of 2021.

25. The fact that the Landlords wish to rely on the waiver or forgiveness of a liquidated debt owing by the Tenant to provide the compensation required by section 48 is not the issue. Section 48.1 does not require that a landlord pay an amount to a tenant. It requires that a landlord compensate the tenant and in much the same way as a landlord can provide the compensation required by section 48.1 by waiving or forgiving rent owing for a period prior to the termination date in the applicable N12, a landlord can provide the compensation by waiving or forgiving a liquidated debt owing by the tenant to the landlord as at the termination date in the N12 and equal to one month’s rent. [See, for example, TNT-05879-18 (Re), 2018 CanLII 113853 (ON LTB)] However, in same way as a landlord who wishes to waive rent is required to clearly and unequivocally advise the tenant prior to the termination date set out in the N12 that the rent is being waived or forgiven, a landlord is required, in my view, to clearly and unequivocally advise the tenant prior to the termination date that the liquidated debt is being waived or forgiven as compensation. A tenant is only ‘compensated’ by the waiver of a debt at such time as the landlord waives that debt such that it is no longer recoverable against the tenant. That takes place only where the landlord clearly and unequivocally waives payment or forgives the debt.

26. In my view, it is not unreasonable or unfair to require a landlord who wishes to waive a liquidated debt (or rent) owing by the tenant to the landlord clearly and unequivocally advise the tenant prior to the termination date set out in the N12.

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29. In the case of an application under section 48, the requirement that the landlord compensate the tenant is a fundamental requirement of the Act. Pursuant to subsection 83(4), the Board has no jurisdiction to make an order terminating the tenancy and evicting the tenant unless compensation has been provided by the landlord. In my view, it is fundamental that a tenant faced with the prospect of being evicted based on a notice given under section 48 come to the hearing before the Board clearly understanding how the landlord is purporting to have complied with section 48.1 of the Act such that the Board has jurisdiction under subsection 83(4) to make the order being requested by the landlord.

30. I admit that Mr. Moak’s argument is superficially attractive given the practical reality that it is all too common for the Board to find N12 notices prepared by landlords or their legal advisors to be defective or improperly served, or for a landlord to not compensate a tenant prior to the termination date in the N12 as required by section 55.1 thereby forcing the landlord to ‘start over’ by serving a new N12 and commencing a new L2 application to secure vacant possession. Allowing the compensation to automatically ‘rollover’ to the landlord’s subsequent attempt to terminate the tenancy and evict the tenant might result in the operation of the Act being more efficient for landlords in those circumstances. That is not, however, consistent with the purposes of the Act and does not, in my view, best attain the objectives of the Act.

31. In order to rely on the compensation provided to the Tenant in connection with the aborted N12 for the purposes of the second N12, the Landlords were required to clearly and unequivocally advise the Tenant prior to March 31, 2021, that the obligation to return the compensation was being waived. The Landlords did not do this. For that reason, I find that the Landlords have not compensated the Tenant as required by sections 48.1 and 55.1 of the Act and I am unable to make an order terminating the tenancy and evicting the Tenant based on this application.

608598 Ontario Ltd v Tuteja, 2022 CanLII 55130 (ON LTB)

16. I therefore find that the Landlord did not comply with the statutory compensation requirement described above prior to the termination date on the notice of termination. The Landlord made no express waiver until the affidavit of December 8, 2021, after the termination date had passed.

Exercise of discretion under s. 190(2)

17. The question therefore turns on whether I might exercise any discretion afforded to me by s. 190(2) of the Act to extend the deadline for the payment of compensation contained in s. 55.1, and allow the compensation to be paid after the termination date contained in the N12.

18. Upon consideration of the submissions made to me, I am electing not to exercise any discretion afforded under s. 190(2) to extend the deadline given in s. 55.1.

19. The statutory requirement that the Landlord pay compensation within a defined timeframe is unambiguous, and a measure designed to protect a Tenant. The Tenant is entitled to the protections provided by the Act and not required to demand that the Landlord respect their statutory obligation relating to compensation. If the Landlord is to rely upon giving compensation by way of a “credit”, the Landlord ought to be held to strict performance of completing that act prior to the termination date.

20. An inchoate intention of a Landlord to provide compensation by a statutory deadline ought not be forgiven by the discretionary powers under s. 190(2). To do so would make a mockery of the tenant protections contained in the Act, and would potentially allow intention, rather than action, to be the standard of compensation being properly given. Setting aside such a mandatory statutory requirement should be the exception, not the rule.

TNT-05879-18 (Re), 2018 CanLII 113853 (ON LTB)

8. Section 48.1 of the Act provides that, when a landlord gives a tenant a notice of termination under section 48 of the Act on the ground that the landlord requires possession of the rental unit for the purpose of residential occupation, the landlord “shall compensate a tenant in an amount equal to one month’s rent”.

9. It is noteworthy that section 48.1 does not state that the landlord must pay compensation of one month’s rent to the tenant; rather, it states that the landlord must compensate that tenant in an amount equal to one month’s rent. That compensation could be provided in a form other than a payment of one month’s rent. For example, a reduction equal to one month’s rent in outstanding rent arrears or a waiver of the payment of rent for one month could be compensation equal to one month’s rent. So long as a landlord compensates a tenant in an amount equal to one month’s rent, the requirement of section 48.1 may be satisfied.

10. In this case, the Landlord alleged that there was damage to the rental unit for which the Tenants were responsible. The Landlord stated that the repairs would cost more than $1,000.00. He and the Tenants met, discussed the issues and, according to the Landlord and his father, RZ, the parties agreed to settle their respective claims by offsetting the Landlord’s claims against the amount payable to the Tenants and by payment of a net payment of $1,400.00 to the Tenants.

11. The Tenant, RD, did not deny that he agreed to accept the payment of $1,400.00 as alleged by the Landlord, although he claims to have been coerced into that agreement. He does not dispute that the $1,400.00 payment was made by the Landlord, but seeks payment of the $1,100.00 balance.

12. There is nothing in the evidence before me to suggest that the Tenants were coerced into the agreement. The Landlord and his father may well have persuaded or convinced the Tenants that the proposal was a fair and reasonable way of resolving the issues between them, but there is no evidence of threats or improper pressure upon the Tenants.

13. I am satisfied that the parties agreed that the Tenants’ entitlement to compensation was satisfied by a cash payment of $1,400.00 and by a waiver by the Landlord of any claims for damage by the Tenants to the rental unit. By entering into that agreement, the Tenants agreed that the value of the compensation they were receiving was equal to one month’s rent ($2,500.00).

TNL-18322-19-RV (Re), 2020 CanLII 30940 (ON LTB)

5. The first allegation relates to the Member’s findings with regard to the Landlord’s payment of compensation to the Tenant pursuant to section 48.1 of the Residential Tenancies Act, 2006 (the’Act’).

8. The Member held a hearing on the preliminary issue of whether compensation had been paid within the period statutorily required by the Act, that is, before the termination date on the N12 Notice of Hearing, September 30, 2019.

9. The Member heard extensive testimonial evidence from both parties, and he also had documentary evidence to consider. The Tenant gave inconsistent evidence about when she had first been offered the one month’s rent compensation by the Landlord, pursuant to section 48.1 of the Act.

10. The Member reviewed the evidence during the hearing, concluding that the Tenant’s testimonial evidence had been inconsistent. He offered his finding with regard to this issue, on a balance of probabilities, during the hearing: that the Landlord had offered the Tenant one month’s rent compensation within the time required, in compliance with the Act.

11. The Member also reviewed the evidence within the body of the order itself, and he concluded that the Landlord had offered the Tenant the compensation pursuant to section 48.1 of the Act personally on September 19, 2019, and again by registered mail on September 21, 2019. The Member therefore concluded that compensation had been paid in compliance with the time limitations in section 55.1 of the Act.

TEL-89446-18 (Re), 2018 CanLII 113149 (ON LTB)

8. Section 48.1 of the Residential Tenancies Act, 2006 (the ‘Act’) states a landlord is obligated to compensate the tenant one month’s rent when the landlord requires the rental unit for their own use. Here, the Tenant has failed to pay rent since November 2017; therefore, one month’s rent will be waived in full satisfaction of section 48.1.

TSL-11797-19 (Re), 2020 CanLII 31423 (ON LTB)

13. The Tenant testified that she had not believed that the Landlord was returning to Canada at the time he served the N12. The Tenant did state that she currently doubt the good faith of the Landlord, but stated that she did not want to leave the unit as she has been looking for a home to purchase or an alternative rental unit and has not been able to do so to date. The Tenant testified that she has bid on a home in the purchasing process and was unsuccessful and needs additional time to find housing for herself and her children.

14. The reasonableness of the Landlord’s intention is not for the Board to determine, rather the consideration is the sincerity of the intention for possession. The case of McLean v. Mosher (1992), 1992 CanLII 7625 (ON SC), 9 O.R. (3d) 156 (Ont. Gen. Div.) stated:

A landlord need not establish that his requirement is reasonable, only that he bona fide wanted and genuinely had the immediate intention to occupy.

15. I find therefore that the reasonableness of the Landlords’ intention to move into this rental unit, verses any other that they own, is not relevant to the issues of intention or good faith. Although alternatives may be available to the Landlords, it is not for the Board to determine what unit would be “most reasonable” for the Landlords to reside in; the Board’s determination is whether there is good faith and genuine intention to reside in the unit.

TNL-05995-18 (Re), 2018 CanLII 113815 (ON LTB)

1. Pursuant to section 48.1 of the Residential Tenancies Act, 2006, (the 'Act'), a landlord who has served a Form N12 Notice of Termination is required to give the tenant compensation in the amount of one month of rent. Section 55.1 of the Act requires a landlord who is obligated to give compensation to a tenant under s.48.1 to pay that compensation no later than the termination date in the N12 notice. In this case the termination date is August 31, 2018. The Act does not speak to how this compensation is to be paid.

2. It was the evidence before me that the Tenant has not paid the rent for June 2018 but has paid the rent for July 2018. To meet the requirement of section 48.1, the Tenant’s arrears of rent shall be reduced by one month’s rent, in satisfaction of the Landlord’s obligation to pay compensation to the Tenant of one month’s rent.

TNL-03124-18 (Re), 2018 CanLII 57606 (ON LTB)

3. At the hearing, the Tenant’s representative raised a preliminary issue based on section 55.1 of the Residential Tenancies Act, 2006 (the ‘Act’). This section follows from section 48.1 of the Act requiring a landlord to compensate a tenant in an amount equal to one month’s rent if the landlord, in good faith, requires the rental unit for the purpose of residential occupation. Section 55.1 of the Act requires this compensation to take place no later than on the termination date specified in the notice of termination of the tenancy given by the landlord. The termination date in this case was May 31, 2018.

4. It was only at the hearing held on June 4, 2018, that the Landlord provided the cheque for one month’s compensation to the Tenant. Section 55.1 of the Act is plain, as is the Schedule B form, that this compensation must be paid no later than the termination date in the Form N12 Notice. In addition, subsection 83(4) of the Act clearly provides that no eviction order shall be issued in a proceeding regarding a termination of a tenancy for the purpose of residential occupation until the landlord has complied with section 48.1 of the Act.

5. Previous case law has provided that compensation provisions, such as section 55.1 of the Act, are part of legislative reforms designed to protect tenants from unlawful evictions under the guise of landlord’s own use applications. The language of that section is very clear. The Landlord did not provide any reasonable excuse for not having paid the compensation, and she had ample opportunity to do so between the first hearing date on May 3, 2018, and the second hearing date on June 4, 2018.

6. As a result of the Landlord’s failure to comply with the strict requirements of section 55.1 of the Act, I dismiss the application.

TST-02091-18 (Re), 2019 CanLII 87057 (ON LTB)

2. On May 10, 2018, the Tenants received an N12 Notice of Termination from the Landlord stating that the Landlord was ending the tenancy because he intends to move into the rental unit. The termination date in the N12 Notice is July 31, 2018.

3. The Tenants moved out of the rental unit pursuant to the N12 Notice by July 31, 2018.

4. The Landlord never paid the Tenants one month’s compensation as he was required to do under sections 48.1 and 55.1 of the Residential Tenancies Act, 2006 (the “Act”).

5. Accordingly, pursuant to section 135(1.1) of the Act, the Landlord is deemed to have retained money in contravention of the Act.

6. Therefore, the Landlord is ordered to pay the Tenants compensation in the amount of $1,700.00, which is equal to one month’s rent.

CEL-79759-18 (Re), 2018 CanLII 140440 (ON LTB)

3. The Landlord is required to pay the Tenants one month compensation before the date of termination on the N12 Notice and before an eviction order can be issues in accordance with section 55.1 and 83(4) of the Residential Tenancies Act, 2006 (the 'Act').

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6. The Landlords have not paid the Tenants the one month compensation required.

7. Since the date of termination on the N12 Notice is November 30, 2018, the same day as the hearing, I did not recess the hearing for the payment to be exchanged rather I considered first whether relief from eviction is reasonable having also heard the merits of application CEL-78819-18.

8. I have considered all of the disclosed circumstances in accordance with subsection 83(2) of the Residential Tenancies Act, 2006 (the 'Act'), and find that it would not be unfair to grant relief from eviction pursuant to subsection 83(1) of the Act because of the following:

9. The Tenants are the mother and step father of the Landlord (MR). The intentions of the parties when the tenancy started was that it would be a permanent arrangement because the Landlord’s mother, the Tenant (MW) has terminal fourth stage cancer, she sold her house to live in the Landlords’ basement and the Tenants gave the Landlords a significant loan to renovate the basement, with the intention of moving in the unit.

It is ordered that:

10. The L2 application is dismissed.

TSL-06637-19 (Re), 2019 CanLII 134554 (ON LTB)

25. The Act requires compensation to be paid before the date on the notice of termination. The landlord testified that she issued a cheque to the Tenant dated July 31, 2019, however, as of the date of the hearing the Tenant had not cashed that cheque. Therefore, I find that Landlord has paid compensation as required under 55.1 of the Act.

TEL-07267-19-IN (Re), 2020 CanLII 61125 (ON LTB)

5. The Landlord’s application here says the Landlord will give the compensation to the Tenant in the future. At the hearing the Landlord indicated that the Tenant was not in arrears for the period ending November 30, 2019 and that she would give the Tenant the compensation right away.

6. As I explained at the hearing, that is not an option available to the Landlord. Pursuant to s. 55.1 the compensation is payable no later than the date of termination on the notice. As the date of termination on the Landlord’s notice is November 30, 2019, that means she had until November 30, 2019 to make payment. Subsection 83(4) says the Board is barred from issuing an eviction order where compensation has not been paid as required.

7. As a result, the Board has no jurisdiction to issue an eviction order based on the Landlord’s N12 notice of termination and that part of the application must be dismissed.

TNL-31874-21, RVGP 278 (ONLTB)

8. The Landlord asserts that the Tenant's e-transfer was declined by him on May 27, 2021, after the Tenant was advised the Landlord was waiving the rent for May of 2021 as compensation.

9. The Tenant acknowledged receiving the Landlord's e-mail on May 26, 2021. The Tenant asserts, however, that she did not receive any notice that the e-transfer that she triggered on May 1, 2021 had been declined by the Landlord and did she did not receive back the funds that were taken from her account on May 1, 2021 until here-transfer expired on June 23, 2021. The Tenant was charged a $5.00 fee because thee-transfer had expired. The Tenant produced her bank statement for May and June of 2021.

10. After hearing the evidence of the Landlord and the Tenant with respect to the issue of the e-transfer, and reviewing the Tenant's bank statement for the months of May and June of 2021, I find that the funds the Tenant sent to the Landlord for May 2021 rent did not come back into her bank account until June 23, 2021 when here-transfer expired. I accept the Tenant's evidence that she was not notified that the Landlord had declined here-transfer.

11. I find that the Tenant was not provided with compensation by May 31, 2021 as required but sections 48.1 and 55.1 of the Act. Whatever the intention of the Landlord, the Tenant did not have access to the money that the Landlord asserts was to be compensation until June 23, 2021. I do not accept the Landlord's argument that there was an obligation on the Tenant to follow-up and inquire into why the funds she e-transferred on May 1, 2021 had not been (re)deposited into her account by May 31, 2021. The obligation under section 48.1 and 55.1 of the Act to compensate the Tenant was on the Landlord and if the Landlord wished to provide that compensation by "waiving" rent that had already been paid by the Tenant it was his obligation to ensure that the funds were returned to the Tenant prior to May 31, 2021.

12. Based on my finding with respect to the issue of compensation, this application must be dismissed.