Corporate Owners - Re: Personal Use (RTA)

🥷 Caselaw.Ninja, Riverview Group Publishing 2025 ©
Date Retrieved:	2025-09-23
CLNP Page ID:	1661
Page Categories:	[Personal Use Application (LTB)]
Citation:	Corporate Owners - Re: Personal Use (RTA), CLNP 1661, <https://rvt.link/c5>, retrieved on 2025-09-23
Editor:	MKent
Last Updated:	2025/09/11

Residential Tenancies Act, 2006, S.O. 2006, c. 17

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. 2006, c. 17, s. 48 (1); 2017, c. 13, s. 7 (1); 2021, c. 4, Sched. 11, s. 31 (1).

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(5) This section does not authorize a landlord to give a notice of termination of a tenancy with respect to a rental unit unless,

(a) the rental unit is owned in whole or in part by an individual; and

(b) the landlord is an individual. 2017, c. 13, s. 7 (2).

...

202 (1) In making findings on an application, the Board shall ascertain the real substance of all transactions and activities relating to a residential complex or a rental unit and the good faith of the participants and in doing so,

(a) may disregard the outward form of a transaction or the separate corporate existence of participants; and

(b) may have regard to the pattern of activities relating to the residential complex or the rental unit. 2006, c. 17, s. 202.

Slapsys (1406393 Ontario Inc.) v. Abrams, 2010 ONCA 676 (CanLII)

[13] Furthermore, by its language, s. 202 obligates the Board to ascertain the true substance of transactions, activities and the good faith of the parties when making findings on an application. It allows the Board to disregard the separate corporate existence of the parties to the transaction in doing so. These are matters that are relevant to an enquiry under s.48. As a result, we are satisfied that s. 202 is relevant to the determination of an application under s. 48 of the Act.

[14] For these reasons, we are satisfied that s. 48 is available to permit a tenancy to be terminated for the personal use of the sole shareholder of the corporate owner of rental premises. Accordingly, we do not give effect to this ground of appeal.

[15] The appellant further submits that, in any event, the landlord was precluded by issue estoppel from seeking the tenant’s eviction. The landlord had a previous unsuccessful application by the landlord under s. 48. However, the Divisional Court was correct in holding that the change in circumstances that the landlord’s family was expecting an additional child was evidence upon which the Board could conclude that issue estoppel did not apply.

[16] Finally, we see no reason to disturb the Divisional Court’s conclusion that there was evidence upon which the Board could conclude as it did on the issue of good faith.

SWL-52948-21, RVGP 301 (ONLTB)

9. In this instance, I find that while the Landlord was an individual at the time the Notice was served, pursuant to section 202 of the Act, the true Landlord is a corporation. The real substance of the transfer was to evade the Act’s prohibition on corporate Landlord’s serving N12s under section 48(5). It was undisputed that Never Rest Farms Ltd. was the Landlord at the start of the tenancy. It was the Landlord’s own evidence that he transferred title to his name to meet the requirements of section 48 of the Act. I recognize that the definition of “landlord” in section 2(1) of the Act includes an owner of a rental unit. However, John Sauve acquired his ownership in the rental unit from a corporation that he alone controls for the sole purpose of being able to evict the Tenants. This interpretation is consistent with the intent of section 48(5) of the Act, which is to deny corporate Landlord’s the right to evict Tenant’s for Landlord’s own use applications.

10. As I have found that Never Rest Farms Ltd., a corporation, is the true Landlord, the N12 Notice of Termination served on July 13, 2021 does not comply with section 48 of the Act.

TSL-01347-18-RV (Re), 2020 CanLII 30947 (ON LTB)

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Determinations:

1. The Landlord requested a review of TSL-01347-19 issued on March 5, 2019.

2. The Landlord sought a review on the ground that the member committed an error of fact which amounted to an error of law because when she dismissed the Landlord’s application for not being compliant with s. 48(5) because the landlord was corporation and as the section provides, a corporation cannot serve an n12 notice for Landlord’s own use.

3. The Member’s found that the rental unit is owned in part by the Landlord, MD and a numbered company. This is correct, however, the actual Landlord id MD who has been the Landlord since the rental unit was purchased.

4. The Landlord testified that he has owned the property since 2003 when he purchased it under power of sale.

5. He acknowledged that in 2007, he transferred 50% of the ownership of the property to a numbered company that is owned in part by his father and in part by him and the transfer was done for cash flow purposes. The Landlord was unable to produce a parcel register to prove ownership, however he was able to produce other documentation that confirmed that the Landlord is the legal owner.

6. Section 48(5) does not require the property to be wholly owned by an individual, 48(5)(a) only requires it to owned in part by individual. I am satisfied that the rental unit is owned in part by an individual therefore his request to review is granted.

s. 48(5) provides:

Application

(5) This section does not authorize a landlord to give a notice of termination of a tenancy with respect to a rental unit unless,

(a) the rental unit is owned in whole or in part by an individual; and

(b) the landlord is an individual. 2017, c. 13, s. 7 (2).

Agnew v Bourgette, 2025 ONLTB 30736

12. However, having considered the evidence before me, including the landlord and tenant relationship with the corporation throughout the tenancy and the timing of the 1 percent share transfer, I find that the sole purpose of the share transfer was to enable the named Landlords to terminate the tenancy of the Tenants, as they specifically knew that their corporation could not do so. The sole purpose for the change in ownership was to evade the prohibition contained in section 48(5) of the Act. I make this finding for the reasons that follow.

13. Section 202(1) of the Act states:

In making findings on an application, the Board shall ascertain the real substance of all transactions and activities relating to a residential complex or a rental unit and the good faith of the participants and in doing so,

(a) may disregard the outward form of a transaction or the separate corporate existence of participants; and

(b) may have regard to the pattern of activities relating to the residential complex or the rental unit.

14. Taking into consideration Section 202 (1) of the Act and the facts before me, I find that although the Landlords own a nominal interest in the rental unit, the true Landlord is the Corporation, a corporate entity. All parties agreed that the Tenants pay their rent solely to the Corporation and have done this since June 2024. When I asked the Landlords about why the Tenants only pay the Corporation, the Landlords stated it was done this way at the request of their accountant. In other words, it was an intentional decision to have the Corporation as the Tenants’ landlord when they obtained ownership of the building.

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16. In the case of Pinto v. Regan and White v. Regan, 2021 ONSC 5502, the Divisional Court stated that in considering the application of section 202 of the Act, the Board is obligated to ascertain the real substance of the transactions and activities regarding the rental unit and the good faith of the parties regarding the notice of termination. They held that the Board must consider the evidence to determine the elements of good faith, including how the parties conducted themselves towards each other at the end of their relationship.

17. Further, in the recent case of Lokhouse v. Ewing, 2024 ONSC 6789, the Divisional Court reaffirmed that even closely held corporations may not serve a notice of termination under section 48(5) of the Act.