Rent Increase - Defective Notice (LTB)

Nanne v. 3011650 Nova Scotia Limited (Michipicoten Forest Resources), 2015 ONCA 391 (CanLII)

[10] Section 135(1) of the RTA enables a tenant of a “rental unit” to apply to the Board for an order that the landlord repay any money collected in contravention of the Act. In March 2012, the three respondents each filed with the Board applications for rent rebates against the Landlord by using the standardized Form T1 entitled “Tenant Application for a Rebate.” The respondents argued in their applications that the Landlord had imposed unlawful rents for the years 2009 through 2011 and, as a result, had collected rents for those years in excess of the lawful rents permitted under the RTA. The respondents contended that the rent increases imposed by the Landlord were void. They sought rent rebates in the following amounts: (i) Nanne - $4,353.96; (ii) Pasternak - $3,903.99; and, (iii) Campbell - $3,175.83.

[11] The Board held that the rents charged by the Landlord since 2008 were illegal and ordered the Landlord to pay the respondents rebates for the two years 2011 and 2012 – the maximum period recoverable due to RTA s. 135(4) – specifically, rebates of $1,181.11 to Nanne, $1,083.19 to Pasternak, and $926.68 to Campbell.

[17] The Divisional Court dismissed the Landlord’s appeal. The court found it unnecessary to determine the applicable standard of review as it held that the Board’s decision was correct. At paras. 22-23 of its reasons, the Divisional Court stated:

In my view, the Board correctly interpreted s. 50(3) and correctly observed that the Landlord’s interpretation of the subsection would lead to an absurd result. The wording of section 50(3) is directed at the parties entering into an agreement that has the effect of directly or indirectly providing for the use of the land for more than 21 years. In other words, for a lease to be void, it is the agreement entered into by the parties, not a statutory provision, that must have the effect of providing for a term of usage of more than 21 years. …

Such an interpretation is consistent with the legislature’s intention to prevent people from circumventing the subdivision control provisions of the PA by entering into leases with a term of more than 21 years and consistent with the remedial purpose of the RTA to protect residential tenants in Ontario. [Emphasis in original.]

Price v. Turnbull's Grove Inc., 2007 ONCA 408 (CanLII)

[23] I agree with the appellant that the challenged rent increase imposed by TGI in November 2002 was void by operation of s. 127(4) of the Act and, consequently, that it was of no [page647] legal force or effect. I also agree that ss. 141(1) and (2) of the Act do not operate in this case to render the void rent increase lawful. It follows, in my opinion, that the Divisional Court erred by failing to consider the effect of ss. 127(1) and 127(4) of the Act in the circumstances of this case and by holding, as it appears to have done, that the rent increase attacked by the appellant was deemed to be lawful by virtue of s. 141 of the Act. I reach these conclusions for the following reasons.

[37] Thus, a rent increase rendered void under s. 127(4) of the Act for non-compliance by the landlord with the mandatory notice requirement of s. 127(1) is not merely unlawful -- it is a nullity. It is as if the increase never occurred. Accordingly, in the case of a void rent increase, there is nothing to be 'saved' by the curative provisions of s. 141.

TSL-57945-14-RV (Re), 2015 CanLII 69071 (ON LTB)

1. This request for review is about the proper interpretation and application of the Court of Appeal’s decision in Price v. Turnbull's Grove Inc., 2007 ONCA 408. The Tenant argues that the Member erred in law by failing to declare that notices of rent increases (‘NORIs’) served on her were void and of no force and effect.

2. On the basis of the submissions made in the request, I am not satisfied that there is a serious error in the order or that a serious error occurred in the proceedings. I say this for the reasons set out below.

8. To meet the requirements of s. 116 a NORI must be in the prescribed form, it must set out the landlord’s intention to increase the rent and the amount of the new rent, and it must be served at least 90 days in advance of the effective date of the rent increase. Pursuant to s. 116(4) a NORI that does not meet these requirements is “void”.

9. The rule set out by the Court in Price v. Turnbull's Grove Inc. is that a NORI that is “void” because it does not meet the requirements of what is now s. 116 cannot be saved or deemed to be a valid increase by operation of s. 136. This is because the word “void” means the notice is a nullity just like if it had never been served at all. The Court explained that what is now s. 136 only applies to NORIs that meet the requirements of s. 116 but are otherwise invalid.

12. The Landlord served a NORI on the Tenant with an effective date of October 1, 2013. That NORI would appear to be invalid as it purported to raise the rent more than the guideline amount that was in effect in 2013. But it was not “void” as it was in the prescribed form, set out the rent increase, and was served at least 90 days prior to the effective date. This application was filed with the Board on November 17, 2014 which is more than one year after the effective date; no other application was filed after October 1, 2013, in which the lawful rent was an issue. So as a result of s. 136 the Member found that the increase taken October 1, 2013, is deemed to be lawful.

TSL-72945-16 (Re), 2016 CanLII 53015 (ON LTB)

12. Moreover, I note that, on October 30, 2015, some five months before the Landlord filed the within application and the Tenant became aware of these proceedings, the Tenant delivered a letter to the Landlord stating, in part, “I have never been notified of any rent increase since the initial increase to $1015 in April 2014.” The Tenant then proceeds to ask the Landlord for information and clarification about the arrears claimed in the N4 notice. Equally telling, is the Tenant’s statement in the said letter where he informs the Landlord as follows: “If rent is going up, notify me, and I will pay the increase (if it is reasonable). I can pay $1050 monthly. That is not the issue.” The Tenant’s letter, in my view and for the reasons stated, corroborates his testimony that he was not served with a NORI 90 days prior to April 1, 2015. It appears that the Landlord’s response to the Tenant’s letter was to file this application with the Board.

13. For these reasons I find, on a balance of probabilities, that the Landlord failed to serve the Tenant with a NORI 90 days prior to April 1, 2015 and, accordingly, the rent increase claimed by the Landlord to have taken effect on that date is unlawful.

TSL-80962-17 (Re), 2017 CanLII 60295 (ON LTB)

20. The Act and the Board’s Rules require a landlord to provide a tenant with documents, including NORIs, and, if they are served in accordance with the Act and Rules, they are deemed to have been served whether the tenant receives them or not. It is only when documents are not served in accordance with one of the permissible methods set out in subsection 191(1) of the Act or Rule 5 that a landlord must prove the tenant actually received them (pursuant to subsection 191(2) of the Act).

21. Here, the certificate of service provided by the Landlord states that the NORI was served to the Tenant, by AC, in accordance with one of the permissible methods set out in subsection 191(1) of the Act. In particular, by placing the document under the door of the rental unit on August 16, 2016. Moreover, AC’s affirmed and uncontradicted testimony was to the same effect. I further note that the Tenant acknowledged that he received the N5 notice of termination that was served to him, by AC, at the same time as the NORI. As well, NO, who initially testified that he was unaware of the NORI at issue, later conceded that it is possible that the Tenant received the NORI and did not bring the document to his attention. NO also testified that he was unaware that the Tenant was served with the N5 notice on August 16, 2016—something readily admitted by the Tenant.

22. AC was cross-examined by the Tenant’s legal representative during the sitting of this matter on March 27, 2017. His testimony going to the service of the NORI to the Tenant remained unshaken, was provided in a straightforward fashion and was wholly devoid of internal inconsistencies and was consistent with the documentary evidence provided.