Mitigating Losses - Rent (LTB)

Boardwalk General Partnership v Fraser, 2013 CanLII 95665 (ON SCSM)

1. This is a damage assessment sought by Boardwalk General Partnership, the owner of an apartment building at 812 King St. W., Kitchener against Paul Fraser, a tenant in Apartment 408 in that building beginning in December, 2008.

2. According to the Affidavit of Service filed Mr. Fraser was served personally on July 4, 2012. He was noted in default on August 13, 2012.

13. I was not referred to, but have considered Yonge Pleasant Holdings Ltd. v. Dragonov (1995), 1995 CarswellOnt 2946 (O.C.G.D.). Mr. Justice Gibson in that case distinguished Lees and held that where the landlord gives notice to terminate a month to month tenancy the landlord cannot claim damages for loss of rent after the date of termination.

18. Section 15 of the Residential Tenancies Act, supra, on the other hand, abolishes acceleration clauses altogether. The right of a landlord to both terminate the tenancy for fundamental breach by the tenant and claim loss of future rent otherwise due under the contract is, in effect, an acceleration of the rent due over the life of the contract, since the landlord may give notice and bring the claim before the period of the tenancy has expired. Accelerated rent clauses are void under the new Act. This alone is a reason to find against the plaintiff on this issue.

21. Moreover, since the Residential Tenancies Act alters the common law with respect to termination for non-payment of rent, abolishes acceleration clauses, requires notice in Form N4 and provides options to the tenant which do not exist at common law, it is my view that the Act has overridden the common law and eliminated the landlord’s option to terminate the lease and claim damages for loss of future rent.

26. In summary, I find that the authorities following Lees are distinguishable having been decided under a former statute which had a less complete code of landlord remedies and damages than the Residential Tenancies Act applicable to this case. I find that the Residential Tenancies Act does comprise a complete, exhaustive code of landlord remedies in the event of early termination, and that those remedies do not include damages for loss of future rent when the tenancy has been terminated by the landlord. I also find that, the tenancy having been terminated not by the landlord’s notice but by the order of the board, there is no room for an election of remedies by the landlord as contemplated in Highway Properties, supra, and that the remedy held in that case to be available in commercial lease cases is not available in residential tenancy cases under the Residential Tenancies Act. I further find that if the commercial lease remedy recognized in Highway Properties does apply to residential tenancies in Ontario, the notice required under the principles in that case must be given at the time of notice of termination by the landlord, and that was not done here.

27. I therefore do not allow any damages to the plaintiff for loss of rent between the date of vacation of the premises by the tenant and the date of possession by the new tenant.

Braks v Bailey, 2013 CanLII 57485 (ON SCSM)

17. The issue then becomes whether the defendant’s failure to give the otherwise valid notice in writing prevents it from being effective in these circumstances. Pursuant to s. 43(1) of the Act a notice shall be in Form N9, although any written notice will suffice if it complies with the other requirements of s. 43(1), by virtue of s. 212 of the Act.

18. It has been held that the notice requirements under the Act are to be strictly interpreted, whether the notice is given by the landlord or the tenant: George V. Apartments Ltd. v. Cobb, (2002) O.J. No. 5918 (Div. Ct.). The requirement that notice be given in writing applies despite any agreement between the parties to the contrary or any waiver, by virtue of s. 3(1): see Nistap Development Corp. v. McIntyre, (2009) O.J. No. 2960 (Div. Ct.). Those appellate authorities are binding on this court.

19. I therefore find that although Ms. Bailey gave notice on January 24, 2012 of termination effective March 31, 2012, in law that notice was invalid because it was not given in writing. Ms. Bailey therefore breached the month-to-month tenancy by moving out on March 31, 2012 without having given valid notice under the Act. The question then becomes what damages result from that breach.

22. There is a mitigation issue to consider. I accept Ms. Bailey’s evidence that Ms. Braks sought to re-rent the property based on a significant rent increase from $1,100 to $1,350 and that this was too high for the market. I also accept Ms. Braks’ evidence that she felt unsure whether the defendant would be leaving at the end of March or at the end of June when the alleged 12-month term ended, and based on that uncertainty she told prospective tenants she was unsure which date the property would be available. These factors would inevitably tend to deter prompt re-rental of the property at the price which Ms. Bailey had been paying.

23. I find that the plaintiff failed to mitigate based on those circumstances. In my view the most fair disposition of the mitigation issue is to find that the damages should be reduced by half. Therefore the loss of $1,375 is reduced to $677.50, and applying the interest credit of $77 the net amount is $600.50.