Illegal Rent Charges

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-11-23
CLNP Page ID:	325
Page Categories:	[Payment of Rent (LTB)], [Illegal Charges and Fees (RTA)]
Citation:	Illegal Rent Charges, CLNP 325, <>, retrieved on 2024-11-23
Editor:	Sharvey
Last Updated:	2024/06/28

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Residential Tenancies Act, 2006

134 (1) Unless otherwise prescribed, no landlord shall, directly or indirectly, with respect to any rental unit,

(a) collect or require or attempt to collect or require from a tenant, prospective tenant or former tenant of the rental unit a fee, premium, commission, bonus, penalty, key deposit or other like amount of money whether or not the money is refundable;

(b) require or attempt to require a tenant or prospective tenant to pay any consideration for goods or services as a condition for granting the tenancy or continuing to permit occupancy of a rental unit if that consideration is in addition to the rent the tenant is lawfully required to pay to the landlord; or

(c) rent any portion of the rental unit for a rent which, together with all other rents payable for all other portions of the rental unit, is a sum that is greater than the rent the landlord may lawfully charge for the rental unit. 2006, c. 17, s. 134 (1); 2017, c. 13, s. 24 (1).

(1.1) No landlord shall, directly or indirectly, with respect to any rental unit, collect or require or attempt to collect or require from a former tenant of the rental unit any amount of money purporting to be rent in respect of,

(a) any period after the tenancy has terminated and the tenant has vacated the rental unit; or

(b) any period after the tenant’s interest in the tenancy has terminated and the tenant has vacated the rental unit. 2017, c. 13, s. 24 (2).

(2) No superintendent, property manager or other person who acts on behalf of a landlord with respect to a rental unit shall, directly or indirectly, with or without the authority of the landlord, do any of the things prohibited under clause (1) (a), (b) or (c) or subsection (1.1) with respect to that rental unit. 2006, c. 17, s. 134 (2); 2017, c. 13, s. 24 (3).

(3) Unless otherwise prescribed, no tenant and no person acting on behalf of the tenant shall, directly or indirectly,

(a) sublet a rental unit for a rent that is payable by one or more subtenants and that is greater than the rent that is lawfully charged by the landlord for the rental unit;

(b) collect or require or attempt to collect or require from any person any fee, premium, commission, bonus, penalty, key deposit or other like amount of money, for subletting a rental unit, for surrendering occupancy of a rental unit or for otherwise parting with possession of a rental unit; or

(c) require or attempt to require a person to pay any consideration for goods or services as a condition for the subletting, assignment or surrender of occupancy or possession in addition to the rent the person is lawfully required to pay to the tenant or landlord. 2006, c. 17, s. 134 (3).

...

135.1 (1) An increase in rent that would otherwise be void under subsection 116 (4) is deemed not to be void if the tenant has paid the increased rent in respect of each rental period for at least 12 consecutive months. 2020, c. 16, Sched. 4, s. 24.

(2) Subsection (1) does not apply with respect to an increase in rent if the tenant has, within one year after the date the increase was first charged, made an application in which the validity of the rent increase is in issue. 2020, c. 16, Sched. 4, s. 24.

...

136 (1) Rent charged one or more years earlier shall be deemed to be lawful rent unless an application has been made within one year after the date that amount was first charged and the lawfulness of the rent charged is in issue in the application. 2006, c. 17, s. 136 (1).

(2) An increase in rent shall be deemed to be lawful unless an application has been made within one year after the date the increase was first charged and the lawfulness of the rent increase is in issue in the application. 2006, c. 17, s. 136 (2).

(3) Nothing in this section shall be interpreted to deprive a tenant of the right to apply for and get relief in an application under section 122 within the time period set out in that section. 2006, c. 17, s. 136 (3).

TET-92785-18 (Re), 2019 CanLII 89697 (ON LTB)

13. Pursuant to s. 116(1):

"A landlord shall not increase the rent charged to a tenant for a rental unit without first giving the tenant at least 90 days written notice of the landlord’s intention to do so."

14. There is no dispute that the notice required by s. 116(1) was not given here.

18. Pursuant to the Court of Appeal’s decision in Price v. Turnbull’s Grove Inc., 2007 ONCA 408', the deeming provisions in section 136 that make an illegal increase legal after one year do not apply where the rent increase is “void”. Rather the deeming provision only applies where the landlord has given 90 days written notice in advance; so for example, it would cover the situation where proper notice was given, but the amount set out for the increase is wrong.

19. The second problem with respect to the Landlord’s argument concerning s. 136(2) is that it explicitly states that the deeming provision does not apply where an application is filed within one year of the increase and the lawfulness of the increase is an issue in the application.

20. Here, the Landlords filed an application with the Board (in Board file TEL-92093-18) on June 15, 2018. The lawfulness of the rent increase was an issue in that application. In fact the Board’s order issued on July 24, 2018 explicitly states the increase the Landlords took in September of 2017 violated the Act and was unlawful. More importantly, the Tenant’s application here was filed within one year of the first illegal increase taking effect and explicitly raises the issue of the illegal rent increase, so s. 136(2) has no application whatsoever.

24. I would observe at this point that the Tenant’s T1 application only seeks $45.50 in unpaid interest and $2,700.00 in illegal rent collected. Normally, this would mean that the Board’s jurisdiction is limited to those amounts. However, the Board has the power to amend an application and I am prepared to do so in this instance. I say this for a number of reasons.

25. As indicated above, the Tenant’s application was filed a year ago and the amount of interest owing and illegal rent paid has naturally increased over that period of time. Further, the Tenant’s T2 application also mentions the illegal rent and seeks a remedy for it in the form of an abatement of $3,000.00. In addition, the Landlords presented absolutely no defense with respect to the illegal rent increase or the failure to pay interest.

26. In other words, it cannot be said the Landlords were unaware of the extent of their jeopardy or disputing their liability. So I am satisfied that it would not be unfair in all of the circumstances to amend the Tenant’s T1 application to accurately set out as remedies the amounts actually owing for unpaid interest and illegal rent collected.

27. So an order shall issue requiring the Landlords to pay to the Tenant $66.30 in unpaid interest and $4,300.00 in illegal rent.

63. Further, and as I pointed out at the hearing, there is another mandatory relief from eviction provision relevant here. Subparagraph 83(3)(a) says:

(3) Without restricting the generality of subsection (1), the Board shall refuse to grant the application where satisfied that,

(a) the landlord is in serious breach of the landlord’s responsibilities under this Act or of any material covenant in the tenancy agreement;

64. The reason this is an issue is because the Landlord continues to charge illegal rent despite a previous Board order in which the Board explicitly states the rent was never lawfully increased from $1,300.00. Pursuant to s. 234(l) of the Act this is actually an offence. In other words, the Landlord is in serious breach of the Act.

65. So I am satisfied the application must be dismissed because relief from eviction is mandatory in the circumstances here. An order shall issue accordingly.

66. This order contains all of the reasons for the decision within it. No further reasons shall be issued.

TNL-05541-18 (Re), 2019 CanLII 87063 (ON LTB)

1. At the November 7, 2018 hearing, the Tenants submitted that the Landlord did not claim the lawful monthly rent in the Landlord’s Form N4 notice of termination and application to the Board. The Tenants alleged that they did not receive a notice of rent increase in 2012, and that the notice of rent increase they received in 2011 is void, because the Landlord did not give the required 90 days’ notice to increase the rent. The Tenants therefore submitted that their lawful rent is $756.18.

3. The Landlord’s agent testified at the November 7, 2018 hearing that the 2012 notice of rent increase the Landlord served on the Tenants was invalid, because the Landlord did not give the Tenants the required 90 days’ notice to increase the rent under subsection 116(1) of the Residential Tenancies Act, 2006 (the ‘Act’). The Landlord’s agent further testified that, despite the improper notice, the Landlord collected the rent increase claimed in the 2012 notice of rent increase. Upon discovering its error, however, the Landlord credited the Tenants $231.66 on September 20, 2013. The Landlord’s representative submitted business records to confirm the Landlord’s agent’s testimony.

4. Based on the Landlord’s evidence, I conclude that the Landlord’s 2012 notice of rent increase is invalid.

TST-89739-17 (Re), 2018 CanLII 42705 (ON LTB)

4. However, with respect to the T1 application, the following facts were agreed to by the parties at the hearing:

• The Landlord increased the rent for the unit on two occasions – once in June 2014; and a second time in February 2017 –without providing the Tenant with a written Notice of Rent Increase (“NORI”) – as required by the Act;
• In the first rent increase (effective June 1, 2014)(imposed without a NORI), the rent for the unit moved from $581.00/month to $625.00/month;
• In the second rent increase (effective February 2017) (imposed without a NORI), the rent moved from $625.00/month to $650.00/month;
• The Tenant has paid his rent based upon these increases from June 2014, save and except the months of November 2017; December 2017 and January 2018.

6. As I indicated at the hearing:

• a rent increase given without a NORI is void (s.116(4) of the Act;
• A rent increase rendered void under the Act is not just unlawful, it is a nullity like it never occurred (Price v. Turnbull Grove Inc. 2007 ONCA 408 (“Price”))
• the principles of Price apply in a tenant’s application such as this one;
• While the Act (in s.135(4) and s.136) ordinarily imposes a one-year limitation on the Board’s ability to order a return of money illegally collected, void rent increases are accorded special status as recognized by the Ontario Court of Appeal in Price. Increases in rent imposed without a notice of rent increase cannot be saved by the one year time limitation in s.135 and s.136;
• A tenant is entitled to a full refund of illegal rent collected from the date of the void rent increases to the date of the hearing.

15. Until the amount owed by the Landlord to the Tenant under this order is fully paid or recovered, the Tenant may be set off the amount awarded in this order (or any balance owing) against any claim for arrears of rent by the Landlord.

TET-85637-17 (Re), 2018 CanLII 42848 (ON LTB)

7. The tenancy agreement submitted by the Tenants clearly shows the tenancy began June 1, 2013 and the monthly rent to be $1,500.00.

8. Both the first-named Tenant and the Tenant’s Mother testified the Landlords told them the rent was going up $150.00 on January 1, 2016 to a monthly rent of $1,650.00. Then the Landlords told them the rent was going up again $50.00 on July 1, 2017 to $1,700.00.

9. The Landlords agreed they had increased the rent twice. They stated that they increased the rent because they performed renovations on the rental unit and wanted compensation for the work done. The Landlords admitted they did not serve the Tenants with a Notice of Rent Increase (‘NORI’) as required pursuant to subsection 116(1). They also stated they did not apply to the Board for an Above the Guideline Increase.

10. It is clear the Landlords have not adhered to the legislative requirements before raising the rent. This means the lawful rent remains $1,500.00. While this application does not address the amount of rent paid by the Tenants between January 1, 2016 and the date of the hearing, this application takes into consideration the impact the illegal rent increase has on the Tenants. The overpayment in rent since that time is owed to the Tenants; however, cannot be issued under this order.

11. The first-named Tenant said that this has negatively affected her financially. She is a single mother trying to ensure she continues to have a roof over her family’s head.

35. The request for abatement of rent is 50% of the illegal rent of $1,700.00. As the legal rent is $1,500.00 and the overpayment has not been dealt with in this remedy, the abatement granted in this order is based on the legal rent.

36. The abatement of rent for Tenant’s Rights application is granted for the illegal increase in rent and the one incident of harassing behaviour by the Landlords and their children. It is a well-accepted principle that individuals are deemed to know the law, so the Landlord ought to have known their demand for illegal rent was improper.

37. Given the severity of the issue of the Tenants’ finances and the first-named Tenant’s evidence as to how upsetting it was, and my knowledge of previous like cases before the Board, I believe an appropriate abatement for this application is 20% of the rent for January 1, 2017 to December 31, 2017 as requested in the application or $3,600.00.

38. The request for abatement of rent for the Maintenance application is 50% for 10 months. Based on the evidence before the Board, I am satisfied the Landlords knew of the issue mid-July 2017 and attempted to remedy the situation November 21, 2017. Based on the evidence before the Board and my knowledge of previous like cases, I believe an appropriate abatement for this application is 30% for the noted period or $1,923.29.

TNL-96287-17 (Re), 2017 CanLII 142640 (ON LTB)

6. There is no dispute that the rent increase implemented by the Landlord as of June 1, 2017 was for more than the guideline amount, and that the Landlords did not obtain Board approval of an above guideline increase.

7. Section 110 of the Act prohibits rent increases except in accordance with the Act. Section 120(1) of the Act prohibits rent increases of more than the guideline amount unless the Board issues an order under section 126 of the Act approving an above guideline increase.

8. However, at the time the NORI was served, subsection 6(2) of the Act which was then in effect provided that section 120 of the Act did not apply to rental units if no part of the building was occupied for residential purposes before November 1, 1991. There is no dispute that the building comprising the rental unit was built in 2005 or 2006 and therefore no part of the building was occupied for residential purposes before November 1, 1991. Therefore, at the time the NORI was served, the rental unit was exempt from the application of section 120, and the Landlords were not precluded from increasing the rent by more than the guideline amount without Board approval.

9. Subsection 6(2) of the Act was repealed by the Rental Fairness Act, 2017, which became law as of May 30, 2017. However section 120.1 of the Act states that, if a NORI had been given before April 20, 2017 in respect of a previously exempt rental unit, then despite the repeal of subsection 6(2) of the Act, the rental unit continued to be exempt from section 120 for the purpose of that NORI. Therefore, since the NORI was given on February 28, 2017, the rental unit continued to be exempt from section 120 for the purpose of that NORI.

10. Therefore, the Landlords were permitted to increase the rent by more than the guideline amount without Board approval, and they validly did so by giving a NORI on February 28, 2017 in compliance with the Act whereby the monthly rent was increased from $2,850.00 to $3,100.00. That increase was not illegal.

Honsberger v. Grant Lake Forest Resources Ltd., 2019 ONCA 44 (CanLII)

[16] The appellant’s primary argument is that no notices of rental increases were required because s. 120(1) of the RTA prohibits rent increases “during the term of a tenancy”. Counsel submits that the new tenancy agreements were entered into when the old agreements had already expired, thus constituting a new term of tenancy. The appellant also advances other grounds relating to the LTB’s reliance on s.38 (1) of the LTA, freedom of contract, and the inadequacy of the Divisional Court’s reasons. For the following reasons, I would not give effect to any of these grounds and would therefore dismiss the appeal.

[26] As mentioned, the crux of the appellant’s argument is that when the Tenants entered into the new one-year tenancy agreements, the term of the tenancies was severed, and thus the rental increase and notice provisions of the RTA were inapplicable, and the new rent lawful.

[28] First, s. 113 of the RTA expressly permits the establishment of a new rental rate with a new tenant. Recognition of a similar carve-out for an existing relationship involving the same tenant, the same landlord, and the same premises would undermine the purpose of the Act. A renewing tenant is not a new tenant. Put differently, the appellant’s proposed statutory interpretation is inconsistent with the scheme of the RTA’s rent control provisions considered as a whole. The structure and purpose of the Act would be undercut if at the commencement of each year, a landlord could increase the rent simply by entering into a new tenancy agreement. A tenancy agreement involving the same parties and the same premises requires the landlord to give 90 days’ notice of an increase pursuant to the clear provisions of the RTA. This conclusion is also consistent with this court’s decisions in Matthews and Nanne v. 3011650 Nova Scotia Limited (Michipicoten Forest Resources), 2015 ONCA 391.

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.