Arrears of Rent & New Owners (LTB)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-11-22
CLNP Page ID:	2377
Page Categories:	[Payment of Rent (LTB)]
Citation:	Arrears of Rent & New Owners (LTB), CLNP 2377, <https://rvt.link/c3>, retrieved on 2024-11-22
Editor:	Sharvey
Last Updated:	2024/04/17

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Tam v Koebel, 2021 CanLII 76807 (ON LTB)

6. The Landlord and New Owner agreed that the Landlord ceased to be the owner of the subject unit on November 30, 2020, shortly after the issuance of the Order. Ownership transferred to the New Owner on December 1, 2020. The Tenant still occupies the unit.

7. I noted that if the matter proceeded only in the name of the Landlord without naming the New Owner, the Landlord would not be entitled to seek enforcement of any eviction. The Landlord’s representative concurred on this point and indicated that the Landlord did not now seek termination of the tenancy. The Landlord now sought only an order for payment of the rental arrears to November 30, 2020.

8. The matter before me was a de novo hearing of the Landlord’s L1 application. When ownership of a property changes between the time the L1 application was filed and the hearing of the application, there can be a solid argument for amending the application to add the new owner and hearing the request for termination on the basis of non-payment of rent to the date of the hearing.

Shamoon v Prior, 2022 CanLII 118689 (ON LTB)

2. For reasons outlined in Interim Order TNL-32960-21-IN and TNL-33173-21IN dated October 18, 2021, eviction cannot be granted pursuant to the L1 Application, and accordingly the only remedy I have considered is the Landlord’s claim for rent arrears pursuant to section 87 of the Residential Tenancies Act, 2006 (Act).

3. The applicant Landlord, Shameran Shamoon, sold the residential complex to Sakeena Ghulam Nabi and Marziye Gholami, with a closing date on or about October 31, 2021. The applicant Landlord, Shameran Shamoon, served and filed an amendment to the application adding, Sakeena Ghulam Nabi and Marziye Gholami, as parties to this application as Landlords. The amendment was accepted at the hearing.

4. Rent owing for the rental periods commencing November 1, 2021 to date, being the period in which Sakeena Ghulam Nabi and Marziye Gholami have been owners of the residential complex, have been separately addressed in a consent order in application TNL-32960-21. Accordingly, this order applies only addresses the rent arrears owing by the Tenant for the period up to October 31, 2021.

5. The Tenant owe $14,425.00 in arrears of rent for the period from September 1, 2020 to October 31, 2021.

6. The Tenant was in possession of the rental unit on April 17, 2021, the date the application was filed.

7. The lawful monthly rent is $1,500.00.

8. The Tenant has made $6,300.00 payments since the application was filed, which includes the waiver of rent due July 1, 2021 as statutory compensation for the N12 notice of termination that forms the basis of application TNL-32960-21.

9. As noted above, the applicant Landlord, Shameran Shamoon, sold the residential complex to Sakeena Ghulam Nabi and Marziye Gholami, with a closing date of October 31, 2021. I must therefore consider whether the applicant Landlord is entitled to proceed with this application. Section 18 of the Residential Tenancies Act, 2006, (the “Act”) provides that “Covenants concerning things related to a rental unit or the residential complex in which it is located run with the land, whether or not the things are in existence at the time the covenants are made.” The payment of rent, including arrears, is a covenant of a lease, and accordingly the right to rent is a right that runs with the land. Upon a change of ownership, these covenants and rights automatically pass to a new owner. In effect, the right to receive arrears therefore becomes a right of a new landlord.

10. The application before me was properly brought by applicant Landlord, Shameran Shamoon when still the owner of the property and a landlord within the meaning of the Act, and therefore a proper applicant for an application for arrears under section 87 of the Act.

11. The successor Landlords, Sakeena Ghulam Nabi and Marziye Gholami, through their representative, indicated that they waive their interest in the pre-closing arrears in favour of the applicant Landlord, Shameran Shamoon, to whom the benefit of the arrears order should be directed. As no authority has been presented to me that indicates that such a direction is improper, I find that in these circumstances I can issue an order requiring the Tenant to pay rent arrears to the applicant Landlord for the time period up to the date of the sale of the rental unit.

Anjema v An, 2022 ONLTB 7253 (CanLII)

6. Section 18 of the Act says: “Covenants concerning things related to a rental unit or the residential complex in which it is located, run with the land, whether or not the things are in existence at the time the covenants are made.” It is commonly accepted that what this provision means is that when a property is sold and there are sitting residential tenants, the tenancy agreements “run with the land” meaning they remain in place on the same terms and conditions as existed prior to the sale. The new owner steps into the shoes of the old landlord.

7. The primary purpose of the provision was to abolish the common law distinction between covenants in esse (which ran with the land) and covenants in posse (which did not). At common law examples of covenants which have always been said to run with the land include the obligation to pay rent and the landlord’s obligation to provide the tenant with quiet enjoyment. As a result of section 18 of the Act it is quite commonplace for successor landlords to bring applications for arrears of rent where the arrears of rent owing cover the period both before (that they have inherited) and after the sale.

8. In this case, based on the evidence before the Board I find that the applicant Landlord is entitled to an order for the arrears that are owing to them. I say this because at the time the application was filed, on January 26, 2022, the former Landlord was still the Landlord in accordance with the definition under the Act. Further, the arrears being claimed by the (now) former Landlord are owed to them and have not transferred to the new Landlord. Furthermore, the parties expressly agreed within the properties purchase and sale agreement that the arrears were not transferred to the new Landlord for the period that they did not own the building.