Splitting the Rental Unit (RTA)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-11-27
CLNP Page ID:	2371
Page Categories:	[Renovations and Repairs (LTB)], [Renovation & Demolition (LTB)]
Citation:	Splitting the Rental Unit (RTA), CLNP 2371, <https://rvt.link/bm>, retrieved on 2024-11-27
Editor:	Sharvey
Last Updated:	2024/04/17

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Residential Tenancies Act, 2006, S.O. 2006, c. 17

38 (1) If a tenancy agreement for a fixed term ends and has not been renewed or terminated, the landlord and tenant shall be deemed to have renewed it as a monthly tenancy agreement containing the same terms and conditions that are in the expired tenancy agreement and subject to any increases in rent charged in accordance with this Act. 2006, c. 17, s. 38 (1).

(2) If the period of a daily, weekly or monthly tenancy ends and the tenancy has not been renewed or terminated, the landlord and tenant shall be deemed to have renewed it for another day, week or month, as the case may be, with the same terms and conditions that are in the expired tenancy agreement and subject to any increases in rent charged in accordance with this Act. 2006, c. 17, s. 38 (2).

(3) If the period of a periodic tenancy ends, the tenancy has not been renewed or terminated and subsection (2) does not apply, the landlord and tenant shall be deemed to have renewed it as a monthly tenancy, with the same terms and conditions that are in the expired tenancy agreement and subject to any increases in rent charged in accordance with this Act. 2006, c. 17, s. 38 (3).

...

123 (1) A landlord may increase the rent charged to a tenant for a rental unit as prescribed at any time if the landlord and the tenant agree that the landlord will add any of the following with respect to the tenant’s occupancy of the rental unit:

1. A parking space.

2. A prescribed service, facility, privilege, accommodation or thing. 2006, c. 17, s. 123 (1).

(2) Subsection (1) applies despite sections 116 and 119 and despite any order under paragraph 6 of subsection 30 (1). 2006, c. 17, s. 123 (2).

...

125 A landlord shall decrease the rent charged to a tenant for a rental unit as prescribed if the landlord and the tenant agree that the landlord will cease to provide anything referred to in subsection 123 (1) with respect to the tenant’s occupancy of the rental unit. 2006, c. 17, s. 125.

O. Reg. 516/06: GENERAL (under Residential Tenancies Act, 2006, S.O. 2006, c. 17)

16. (1) The following services, facilities, privileges, accommodations or things are prescribed for the purposes of subsection 123 (1) and section 125 of the Act:

1. Cable television.

2. Satellite television.

3. An air conditioner.

4. Extra electricity for an air conditioner.

5. Extra electricity for a washer or dryer in the rental unit.

6. Blockheater plug-ins.

7. Lockers or other storage space.

8. Heat.

9. Electricity.

10. Water or sewage services, excluding capital work.

11. Floor space.

12. Property taxes with respect to a site for a mobile home or a land lease home. O. Reg. 516/06, s. 16 (1).

(1.1) In a circumstance in which clause 137 (3) (c) or 138 (1) (b) of the Act requires a landlord to reduce the rent for a rental unit, the rent reduction rules that are prescribed for the purposes of clause 137 (3) (c) or 138 (1) (b) of the Act apply instead of the requirements set out in subsections (2) to (5). O. Reg. 395/10, s. 1.

(2) If there is an agreement under subsection 123 (1) or section 125 of the Act, the maximum increase in rent or minimum decrease in rent shall be the actual cost to the landlord of the service, facility, privilege, accommodation or thing, other than floor space, that is the subject of the agreement or, where the actual cost to the landlord cannot be established or where there is no cost to the landlord, a reasonable amount based on the value of the service, facility, privilege, accommodation or thing. O. Reg. 516/06, s. 16 (2).

(3) If the agreement under subsection 123 (1) or section 125 of the Act is to provide or cease to provide floor space, the maximum increase in rent or minimum decrease in rent shall be proportionate to the change in floor space. O. Reg. 516/06, s. 16 (3).

(4) If an amount determined in accordance with subsection (3) would be unreasonable given the nature and quality of the floor space added or taken away, the maximum increase in rent or minimum decrease in rent shall be a reasonable amount based on the nature and quality of the floor space and the amount of the change in the floor space. O. Reg. 516/06, s. 16 (4).

(5) Despite subsections (2), (3) and (4), where a service, facility, privilege, accommodation or thing was provided in accordance with a previous agreement under section 123 of the Act, section 132 of the Tenant Protection Act, 1997, section 46 of the Rent Control Act, 1992 or subsection 96 (4) of the Residential Rent Regulation Act, the minimum decrease in rent on ceasing to provide the service, facility, privilege, accommodation or thing shall be equal to,

(a) the most recent amount of the separate charge for the service, facility, privilege, accommodation or thing; or

(b) where there is no separate charge, the increase in rent which the landlord took when the service, facility, privilege, accommodation or thing was first provided, adjusted by the percentage increase in the rent being charged for the rental unit from the date the service, facility, privilege, accommodation or thing was first provided to the date the landlord ceased to provide it. O. Reg. 516/06, s. 16 (5).

Executive Property Management v Gil, 2022 CanLII 94711 (ON LTB)

31. In the present case, the real substance of the work proposed by the Landlord is not a demolition for several reasons.

32. First, the Landlord does not propose any work that can reasonably be described as irrevocably destroying or even significantly changing the Tenant’s rental unit. The building permit as well as the testimony of the Landlord’s witness confirm that while significant work is being done in the unoccupied basement there are no proposed changes to the floorplan of the Tenant’s unit. That the work itself is insignificant as it pertains to the Tenant’s unit is demonstrated by the fact that it has not been necessary for the Tenant to vacate the rental unit while the Landlord brought the work in the basement to substantial completion (albeit without the necessary inspections).

33. Second, even if the Landlord was proposing to destroy or significantly change the Tenant’s unit, and even if the project required the Tenant to vacate the rental unit, there would be no impediment to the Tenant moving back into the unit and exercising a right of first refusal. The basement has been unoccupied at all material times and there is therefore no tenant in the basement who would be competing with the Tenant for the exercise of this right.

34. Third, in his questioning of the Tenant, the Landlord’s legal representative had the Tenant admit that she does not pay rent for floor space in the basement. I understood the purpose of eliciting this admission as making the point that the Tenant would obtain a windfall if she were permitted to remain in her unit paying the same rent while receiving the benefit of the increased floor space once the Tenant’s unit is connected to the basement.

35. The problem I have with this argument is that the Act expressly provides a mechanism for dealing with situations where a landlord wants to add floor space or storage space to an existing unit. I am referring to subsection 123(1) of the Act and subsection 16(1) of O. Reg. 516/06, which together provide that a landlord may increase the rent charged to a tenant at any time if the landlord and the tenant agree to the addition of storage space or floor space. That the Act requires such additions to be based on consent suggests that a landlord cannot unilaterally impose such a change on a tenant. This is in my view the real substance of what the Landlord is attempting to do. The fact that the Tenant has not consented to the addition of storage space or floor space does not change the Landlord’s project into a demolition. If it did, landlords could evict their tenants by proposing relatively minor work such as enclosing a porch and characterizing the result as a new unit because it is bigger than the original unit. This would in my view strike an unfair balance between the rights of residential landlords and tenants and defeat the Legislature’s intention to preserve tenancies where it is possible to do so.

Heger v. Varajao et al., 2010 ONSC 4603 (CanLII)

C. The requirements for a valid lease

[93] “To be valid, an agreement for a lease must show (1) the parties, (2) a description of the premises to be demised, (3) the commencement and (4) duration of the term, (5) the rent, if any, and (6) all the material terms of the contract not being matters incident to the relation of landlord and tenant, including any covenants, exceptions or reservations”: see Canada Square Corp. et al. v. VS Services Ltd. et al. (1981), 1981 CanLII 1893 (ON CA), 34 O.R. (2d) 250 at 258-59 (C.A.), 1981 CarswellOnt 124, at para. 21, citing Williams, Canadian Law of Landlord and Tenant (4th ed., 1973), at p. 75.

[94] “[R]equirement (6) . . . relates to material terms. It comes into play only in certain cases. It may be said now that conditions (1) to (5) are invariable requirements”: see Canada Square Corp. et al. v. VS Services Ltd., et al., ibid.

Opara v. Cook, 2008 CanLII 22923 (ON SCDC)

[6] A tenancy agreement came into effect on December 11, 2006 upon the agreement being reached between the parties and the deposit being paid. There is no real dispute that such an agreement was reached. Mr. Opara purported to unilaterally terminate that agreement on December 13, 2006. The only real issue is whether he was entitled to do so. In this regard, ss. 9(1) and 9(2) of the Tenant Protection Act are irrelevant as they deal only with when the “term” of the tenancy commences. This has nothing to do with whether either party can rescind the agreement prior to the date of occupancy. Ordinary rules of contract law apply. There is no unilateral right to rescind a contract that has been duly entered into by the parties simply because the effective date of the contract has not yet been reached.