5. The Occupants hired a moving truck for several hours, they had help from friends to move their belongings, they signed a new lease for a new apartment and they left the rental unit. The fact that they left behind some garbage and unwanted items does not mean that they did not completely move out.
6. The second dispute between the parties is when, if ever, the Occupants returned the keys to the Landlord.
17. The fact that the Occupants slid the keys under the door means that they no longer were able to gain access to the unit. That is the very essence of giving up vacant possession.
9. In Benedetto v. Dineen, (2006) CarswellOnt 3233 the Court held that the only proposition for the Board to consider is whether vacant possession occurred. In Benedetto v. Dineen four prospective tenants provide a rental deposit to a landlord who told them the deposit was not refundable. The Tenants decided not to rent because they could not find guarantors as required by the landlord. The Board found that vacant possession had not been given to the tenants. The court found that no lease was signed and vacant possession had not been given.
10. In Musilla v. Avcan Management (2010) ONSC 5425 the court found a tenancy agreement had been entered into when the rental application was accepted by the Landlord. The essential terms of the agreement were set out in the rental application. The Musilla v. Avcan Management case resembles the recent decision of the court in Opara v. Cook (2008) O.J. No. 1934 (Div Ct). There the Court upheld a decision of the Board dismissing a tenant’s application for a refund because the Court observed that the tenancy agreement came into effect the day the parties reached an agreement on the rental unit and the deposit being paid.
11. Having regard to the words set out in section 107 (1) it is noted that the landlord is to return the deposit if vacant possession is “not given” to the prospective tenant. I interpret the words “not given” to mean that it is the refusal or inability of the landlord to provide the premises that triggers the obligation to return the deposit to the prospective Tenant.
12. In this case, the Landlords refused to give vacant possession to the Tenant because he had not satisfied them of the obligation to changeover the utility account. What distinguishes this case from Benedetto v. Dineen, Musilla v. Avcan Management Inc. and Opara v. Cook is the superintendent’s interference with the utility provider. For some reason the superintendent felt it appropriate to share with the utility the information relayed to the Landlords by way of the rental application despite the fact that the rental application clearly stated that the information contained would be kept confidential. I have no doubt that had the superintendent simply confirmed to the utility company that the prospective Tenant intended to occupy the rental unit the utilities would have been connected in his name. With respect to the superintendent’s argument that she routinely shares rental application information with the utility provider because she believes she must do so does not make it legal or appropriate. Absent consent of the Tenant, the superintendent is under no obligation to share information with the utility provider. Indeed mandatory privacy legislation now in effect in the Province of Ontario makes it unlawful.
13. Having determined that the superintendent interfered with the Tenant’s effort to perform his obligation under the contract, making it financially impossible to change the utilities over into his own name, I can not find that the Landlords were willing to give vacant possession to the Tenant. On the contrary, it was the Landlords position that the Tenant was only entitled to the key once he had performed his obligation under the contract. The Landlords are not entitled to hold the Tenant bound to his agreement and then interfere to the extent that the Tenant is unable to meet his obligation. The Landlords were entitled to keep the deposit only if they offered vacant possession which in this case, they did not.
14. While I appreciate that the Landlords believed they were being prudent in their business dealing with the Tenant because they did not want to give possession of their rental unit to a Tenant who had not connected the power, or worse, they did not want to “foot” the Tenant’s power bill. However, this prudence took precedence over the Landlords statutory duty to provide the Tenant with vacant possession. I find that the Landlords refused to give the Tenant vacant possession of the rental unit.
14. If the meaning of a word is not statutorily defined, or is a legal “term of art”, words should be given their plain meaning (i.e. dictionary meaning).
5. D.L.S undertakes to hold the monies paid in accordance with paragraph 2 (iii) above in Trust and to release such monies to A.D.L when vacant possession of the unit is provided to the Landlords on or before December 1, 2016.
- (i) Vacant possession means delivery of the keys to the unit to D.L.S together with instructions that D.L.S advise the Landlords’ solicitor that vacant possession has been surrendered;
- (ii) However, D.L.S agrees to otherwise return the balance, in the sum of $3,000.00, to the Landlords’ solicitor if vacant possession is not provided in the above-prescribed manner.
19. The issue with respect to “possession” arises because of the wording of s. 87(1) of the Act which says: A landlord may apply to the Board for an order for the payment of arrears of rent if,
- (a) the tenant has not paid rent lawfully required under the tenancy agreement; and
- (b) the tenant is in possession of the rental unit.
- [Emphasis added.]
21. So this concept of being in possession not only dictates whether or not the landlord can apply to the Board for an order requiring the tenant to pay money, but it also is tied to the landlord’s right to an order for daily compensation for use and occupation of a rental unit.
22. So the question is what does the phrase “in possession” mean? The leading and definitive case on the meaning of this phrase in the Act is found in the Court of Appeal’s decision in 1162994 Ontario Inc. v. Bakker, 2004 CanLII 59995 (ON CA) (‘Bakker’). It says (at paragraphs 18 to 22):
- …I think the requirement that the tenant be "in possession of the rental unit" at the time of the application reflects a determination that rent arrears disputes can be resolved efficiently and fairly through the Tribunal where the tenant at the time of the application continues to have some connection with the rental unit and, therefore, some relationship with the landlord. Situations where that connection has been severed and the relationship gone are best resolved through the more formal court processes.
-  Some further assistance in defining "tenant in possession" is found by an examination of s. 86(2). That subsection provides that a landlord may be compensated for "the use and occupation" of a rental unit after notice of termination of the lease. A landlord can only be compensated, however, if the tenant is "in possession of the rental unit" when the landlord's application is made.This suggests that a "tenant in possession" is a person who was using or occupying the rental unit at the time of the application but does not necessarily indicate that the phrase is limited to users and occupiers.
-  Possession is a difficult concept to define. Both in common and legal parlance, it connotes some form of control over the thing said to be possessed: e.g. D. Dukelow, B. Nuse, The Dictionary of Canadian Law 2nd ed., (1995) Carswell at p. 916; The Shorter Oxford English Dictionary, Vol. II (1973) p. 1635. Clearly, possession in s. 86(1)(b) is not limited to immediate physical control. For example, a tenant who locks up a rental unit and leaves on an extended vacation, continues to exercise sufficient control over that rental unit so as to qualify as a "tenant in possession" for the purposes of s. 86(1)(b). In my view, possession of a rental unit refers to some form of control over that unit as demonstrated by factors such as access to, use of, or occupation of the unit.
-  There will be cases, although I would not think a great many, where a determination of whether the tenant was "in possession of the rental unit" at the time of the application will raise a difficult issue. In those cases, the Tribunal will have to decide, based on the evidence, whether there is a sufficient connection between the rental unit and the tenant to permit a finding that the tenant was "in possession" of that rental unit.
-  In this case, there was no connection between Bakker and the rental unit at the time the s. 86 application was commenced. Bakker exercised no control over that unit. He had unequivocally, completely, and permanently vacated the unit more than two years before the application.
- [Emphasis added.]
23. I would agree with the Tenant that just because a tenant does not return the keys does not necessarily mean a tenant will be found to be “in possession” for the purposes of the Act. I would also agree that it is not unusual for tenants to move out of a rental unit and leave belongings behind so the fact that some items were left in the rental unit is not determinative either.
24. Rather what Bakker directs the Board to do is to examine the evidence to determine the degree of connection with and the extent of control over the unit that the Tenant exercises.
21. Subsection 107(1) of the Act reads:
- “A landlord shall repay the amount received as a rent deposit in respect of a rental unit if vacant possession is not given to the prospective tenant”.
22. Subsection 13(2) of the Act also provides that a tenancy agreement takes effect when the tenant is entitled to occupy a rental unit, whether or not the tenant actually occupies the unit.
23. Subsection 21(1) contemplates that a tenancy agreement “…means a written, oral or implied agreement between a tenant and a landlord for occupancy of a rental unit.”
24. In my view, the facts before me disclose the existence of a contract between the Tenant and the Landlord. A contract is a legally binding agreement between two or more persons for a particular purpose. To be valid, a contract requires an offer, an acceptance of the offer and consideration.
25. What occurred here was a legally binding agreement between the parties. The application – completed by the Tenant – was an offer to lease the unit. The application itself includes the written provision that “…upon acceptance of the Rental Application by the Landlord, I/We shall hereby be bound to a Tenancy Agreement with the Landlord…”. The offer to lease was accepted by the Landlord on February 1, 2017 for a term from February 1, 2017 to January 31, 2018. Consideration was provided by the Tenant in form of payment for first and last month’s rent in the amount of $1.057.00.
26. Pursuant to this contract, at the start of the lease on February 1, 2017, the Landlord stood ready to provide its reciprocal consideration: to deliver vacant possession of the unit to the Tenant (in exchange for the payment of rent for February 2017). No evidence was presented that the Landlord, at any time, prevented the Tenant from taking possession of the unit or that the Landlord did not deliver vacant possession of the unit to the Tenant.
27. Based upon my finding above that there was a legally binding agreement between the parties – a tenancy agreement, the Landlord is allowed to retain the $1,057.00 paid by the Tenant for the rent for February 2017. While the Tenant repudiated the contract with the Landlord on February 6, 2017, the term of the binding lease had already begun. Faced with the Tenant’s position that he was not willing to continue with his obligations under the contract, the Landlord mitigated its losses by leasing the unit effective March 1, 2017.
28. The Landlord here has retained $1,057.00 for the monthly rent for the unit for February 2017 further to the legally binding contract between the Tenant and the Landlord. I am not satisfied, on balance of probabilities, that the Landlord has collected or retained money illegally. It was the Tenant’s act in repudiating the contract that prevented him from taking possession of the unit, not any action by the Landlord. This finding is consistent with the conclusion of the Ontario Divisional Court in Musilla v. Avcan Management Inc. (2010) ONSC 5425.
29. The Tenant’s application will be dismissed.