Guarantor Obligations for Rent (LTB)

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Date Retrieved:	2024-04-30
CLNP Page ID:	2376
Page Categories:	[Payment of Rent (LTB)]
Citation:	Guarantor Obligations for Rent (LTB), CLNP 2376, <https://rvt.link/bq>, retrieved on 2024-04-30
Editor:	Sharvey
Last Updated:	2024/04/17

HMV Properties Inc., and Elgin Lycett and Dayne Lycett ONSCSM No. 60929/09

18 HMV's position is that having guaranteed the rent payable under the tenancy agreement, Dayne Lycett remained liable to pay rent during the deemed month-to-month renewal provided for by section 38 of the Residential Tenancies Act, 2006.

19 Dayne Lycett's position is that the tenancy agreement that he co-signed was for a one-year term and that he had no obligation to HMV following the expiry of that term.

20 In Kar v. Chung, a case not cited in argument, the Court of Appeal, reversing a decision of the Divisional Court, held that the deemed renewal provided for in subsection 104(1) of the Landlord and Tenant Act did not apply to guarantors, that landlords and tenants are deemed to have renewed their tenancy agreements but that guarantors are not deemed to have done anything. While the language in section 38 of the Residential Tenancies Act, 2006 is not identical to that in subsection 104(1) of the predecessor Act, it does not differ in any material respect and accordingly, the result must be the same.

21 For the reasons given, the action is dismissed.

Kar v. Chung, 2001 CanLII 8600 (ON CA)

[1] We disagree with the reasoning of both Mr. Justice Murphy and the Divisional Court.

[2] The lease was entered into on May 4, 1997 and it was to expire on May 4, 1998, subject to the tenant’s right to renew for another year on giving 60 days notice. The tenant did not give notice. The Landlord and Tenant Act R.S.O. 1990, C. L.7 was then in force. Section 104(1) of that act provided as follows:

Subject to subsection (2), upon the expiration of a tenancy agreement for a fixed term, the landlord and the tenant shall be deemed to have renewed the tenancy agreement as a monthly tenancy agreement upon the same terms and conditions as are provided for in the expired tenancy agreement.

[3] The legislation does not purport to affect or apply to guarantors. The guarantor in this case is not deemed to have done anything. There was no language in the guarantee itself dealing with renewals. In those circumstances it seems to us that the guarantee expired at the end of the first year.

[4] Part of the award of the Divisional Court was for damage to the premises. There was no evidence whether it occurred during the first year or after the guarantor’s liability had ceased.

[5] In these circumstances the order of the Divisional Court is set aside and the judgment of the trial judge restored. The tenant is entitled to her costs here and below. Those costs are fixed, on consent, at $5000.