Over-Payment of Rent
2. The Tenants' claim that the Landlord raised the rent illegally is not barred by subsection 135(4) of the Residential Tenancies Act, 2006 (the 'Act'). In Price v. Turnbull's Grove Inc., (2007) O.J. No. 2177 (C.A.), the Court of Appeal for Ontario determined that a rent increase that is collected without first giving a proper notice of rent increase is void. and is therefore a legal nullity. As such, the Court of Appeal determined that the one-year limitation period under subsection 135(4) is not applicable, as a limitation period cannot apply to a legal nullity.
4. However, subsection 17(1) of the Ontario Real Property Limitations Act imposes a six year limitation period on the Tenants' claim. The subsection reads: "No arrears of rent. or of interest in respect of any sum of money charged upon or payable out of any land or rent, or in respect of any legacy, whether it is or is not charged upon land, or any damages in respect of such arrears of rent or interest, shall be recovered by any distress or action but within six years".
6. The Landlord collected rent in excess of the amount allowed by the Act. The Landlord did not serve the Tenants a notice of rent increase to raise the rent from $900.00 a month to $1,100.00 a month, effective September 1, 2012. However, because of the six year limitation period under the Real Property Limitations Act, the Tenants' claim for excess rent is limited to rent collected starting February 1, 2013.
It is ordered that:
1. The Landlord shall pay to the Tenants the sum of $12,800.00. This amount represents excess rent the Landlord collected from September 1, 2013 to May 31, 2019.