View source for Rollover Compensation (N12 and N13)

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==<i>Barry v Vindis,</i> 2024 ONLTB 72896<ref name="Vindis"/>==

8. The Landlord has the onus of establishing all the facts necessary for the Board to make an order pursuant to section 69 of the Act. This includes establishing that the Landlord has compensated the Tenant as required by section 48.1 of the Act. Based on the submissions of the parties, however, I am not satisfied that the Landlord has met their obligation to compensate the Tenant.  

9. <b><u>First</b></u>, <u>the Landlord has not provided any evidence to indicate that the Tenant was advised of the Landlord’s position that the compensation provided in connection with the prior N12 satisfied the requirement of section 48.1 of the Act.</u>  

10. <b><u>Second</b></u>, <u>the Landlord’s application LTB-L-087011-23 contains a document filed by the Landlord that demonstrates the Landlord explicitly demanded the return of the compensation paid in support of the prior N12 notice.</u> The document supports the Tenant’s position that the Landlord did not, in fact, waive the Landlord’s potential entitlement to the return of compensation in order to “carry forward” the compensation to the new N12. 

11. <b><u>Third</b></u>, I am persuaded by the decision of Vice-Chair Shea in SOL-20896-21, 2021 CanLII 139416 (ON LTB), which stands for the proposition that <b><u>“In order to rely on the compensation provided to the Tenant in connection with the aborted N12 for the purposes of the second N12, the Landlords were required to clearly and unequivocally advise the Tenant prior to [the termination date] that the obligation to return the compensation was being waived.”</b></u> I find that the facts of the matte before me are substantially similar to those in SOL-20896-21 and I see no basis to deviate or distinguish from the Board’s prior order. 

12. As <b><u>the Landlord has failed to prove that the Landlord clearly and unequivocally advised the Tenant prior to February 29, 2024 that the Landlord was waiving their potential claim to the compensation paid in support of the previous N12, I find that the Landlord has not compensated the Tenant as required by sections 48.1 and 55.1 of the Act.</b></u>  

13. In summary, the Landlord has not compensated the Tenant an amount equal to one month's rent and the termination date has passed. As a result, the Landlord's application must be dismissed.  

<ref name="Vindis"><i>Barry v Vindis,</i> 2024 ONLTB 72896, <[[File:LTB-L-101048-23-HR.pdf]]><https://rvt.link/df>, retrieved 2024-10-03</ref>

==<i>D'Angelo v Chamberlain,</i> 2021 CanLII 139416 (ON LTB)<ref name="D'Angelo"/>==

1. On January 22, 2021, the Landlords served a N12 notice with a termination date of March 31, 2021. The Tenant did not vacate the rental unit. The Landlords filed a L2 application on February 26, 2021.

2. At the hearing on July 28, 2021, the Tenant raised two preliminary issues: (a) the service of the N12 upon which this application was based; (b) the compensation required by sections 48.1 of the Residential Tenancies Act, 2006 (the 'Act'). My interim order of August 10, 2021 addressed both of those issues. I directed that the Landlords produce Mr. Little and the person who served the N12, Gerald Finton, and identified the issue as to whether the Landlords had provided compensation to the Tenant as required by the Act.

...

23. Consistent with subsection 73(1) of the Act, it is my view that where a landlord provides monetary compensation in connection with an aborted attempt to secure vacant possession of a rental unit pursuant to section 48, the tenant is obliged to return the compensation and it constitutes a liquidated debt owing by the tenant to the landlord that can be recovered by the landlord through legal process.

24. What the Landlords purport to have done in this case is rely on waiver of the liquidated debt owing to them by the Tenant as a result of the aborted N12 as the compensation required by section 48 in connection with the second N12 they served in January of 2021.

25. The fact that the Landlords wish to rely on the waiver or forgiveness of a liquidated debt owing by the Tenant to provide the compensation required by section 48 is not the issue. Section 48.1 does not require that a landlord pay an amount to a tenant. It requires that a landlord compensate the tenant and in much the same way as a landlord can provide the compensation required by section 48.1 by waiving or forgiving rent owing for a period prior to the termination date in the applicable N12, <span style=background:yellow>a landlord can provide the compensation by waiving or forgiving a liquidated debt owing by the tenant to the landlord as at the termination date in the N12 and equal to one month’s rent. <b>[See, for example, <i>TNT-05879-18 (Re), 2018 CanLII 113853 (ON LTB)</b><ref name="TNT-05879-18"/>]</i></b> However, in same way as a landlord who wishes to waive rent is required to clearly and unequivocally advise the tenant prior to the termination date set out in the N12 that the rent is being waived or forgiven, a landlord is required, in my view, to clearly and unequivocally advise the tenant prior to the termination date that the liquidated debt is being waived or forgiven as compensation. A tenant is only ‘compensated’ by the waiver of a debt at such time as the landlord waives that debt such that it is no longer recoverable against the tenant. That takes place only where the landlord clearly and unequivocally waives payment or forgives the debt.</span>

26. In my view, it is not unreasonable or unfair to require a landlord who wishes to waive a liquidated debt (or rent) owing by the tenant to the landlord clearly and unequivocally advise the tenant prior to the termination date set out in the N12.

...

29.  In the case of an application under section 48, the requirement that the landlord compensate the tenant is a fundamental requirement of the Act. Pursuant to subsection 83(4), the Board has no jurisdiction to make an order terminating the tenancy and evicting the tenant unless compensation has been provided by the landlord. In my view, it is fundamental that a tenant faced with the prospect of being evicted based on a notice given under section 48 come to the hearing before the Board clearly understanding how the landlord is purporting to have complied with section 48.1 of the Act such that the Board has jurisdiction under subsection 83(4) to make the order being requested by the landlord.

<b>30. I admit that Mr. Moak’s argument is superficially attractive given the practical reality that it is all too common for the Board to find N12 notices prepared by landlords or their legal advisors to be defective or improperly served, or for a landlord to not compensate a tenant prior to the termination date in the N12 as required by section 55.1 thereby forcing the landlord to ‘start over’ by serving a new N12 and commencing a new L2 application to secure vacant possession. <span style=background:yellow><u>Allowing the compensation to automatically ‘rollover’ to the landlord’s subsequent attempt to terminate the tenancy and evict the tenant might result in the operation of the Act being more efficient for landlords in those circumstances. That is not, however, consistent with the purposes of the Act and does not, in my view, best attain the objectives of the Act.</u></b></span>

31. In order to rely on the compensation provided to the Tenant in connection with the aborted N12 for the purposes of the second N12, the Landlords were required to clearly and unequivocally advise the Tenant prior to March 31, 2021, that the obligation to return the compensation was being waived. The Landlords did not do this. For that reason, I find that the Landlords have not compensated the Tenant as required by sections 48.1 and 55.1 of the Act and I am unable to make an order terminating the tenancy and evicting the Tenant based on this application.

<ref name="TNT-05879-18">TNT-05879-18 (Re), 2018 CanLII 113853 (ON LTB), <https://canlii.ca/t/hwbn1>, retrieved on 2024-03-08</ref>
<ref name="D'Angelo"><i>D'Angelo v Chamberlain,</i> 2021 CanLII 139416 (ON LTB), <https://canlii.ca/t/jls56>, retrieved on 2024-03-08</ref>

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