Bad Faith (Purchaser)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-11-23
CLNP Page ID:	1861
Page Categories:	[Personal Use Application (LTB)]
Citation:	Bad Faith (Purchaser), CLNP 1861, <https://rvt.link/1r>, retrieved on 2024-11-23
Editor:	MKent
Last Updated:	2024/03/27

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Residential Tenancies Act, 2006

49 (1) A landlord of a residential complex that contains no more than three residential units who has entered into an agreement of purchase and sale of the residential complex may, on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession of the residential complex or the unit for the purpose of residential occupation by,

(a) the purchaser;

(b) the purchaser’s spouse;

(c) a child or parent of the purchaser or the purchaser’s spouse; or

(d) a person who provides or will provide care services to the purchaser, the purchaser’s spouse, or a child or parent of the purchaser or the purchaser’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located. 2006, c. 17, s. 49 (1); 2021, c. 4, Sched. 11, s. 31 (1).

(2) If a landlord who is an owner as defined in clause (a) or (b) of the definition of “owner” in subsection 1 (1) of the Condominium Act, 1998 owns a unit, as defined in subsection 1 (1) of that Act, that is a rental unit and has entered into an agreement of purchase and sale of the unit, the landlord may, on behalf of the purchaser, give the tenant of the unit a notice terminating the tenancy, if the purchaser in good faith requires possession of the unit for the purpose of residential occupation by,

(a) the purchaser;

(b) the purchaser’s spouse;

(c) a child or parent of the purchaser or the purchaser’s spouse; or

(d) a person who provides or will provide care services to the purchaser, the purchaser’s spouse, or a child or parent of the purchaser or the purchaser’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located. 2006, c. 17, s. 49 (2); 2021, c. 4, Sched. 11, s. 31 (1).

(3) The date for termination specified in a notice given under subsection (1) or (2) shall be at least 60 days after the notice is given and shall be the day a period of the tenancy ends or, where the tenancy is for a fixed term, the end of the term. 2006, c. 17, s. 49 (3).

(4) A tenant who receives notice of termination under subsection (1) or (2) may, at any time before the date specified in the notice, terminate the tenancy, effective on a specified date earlier than the date set out in the landlord’s notice. 2006, c. 17, s. 49 (4).

(5) The date for termination specified in the tenant’s notice shall be at least 10 days after the date the tenant’s notice is given. 2006, c. 17, s. 49 (5).

49.1 (1) A landlord shall compensate a tenant in an amount equal to one month’s rent or offer the tenant another rental unit acceptable to the tenant if,

(a) the landlord gives the tenant a notice of termination of the tenancy on behalf of a purchaser under subsection 49 (1) or (2); and

(b) the notice of termination is given on or after the day the Protecting Tenants and Strengthening Community Housing Act, 2020 receives Royal Assent. 2020, c. 16, Sched. 4, s. 5.

(2) Despite section 18, the obligation to compensate the tenant under subsection (1) remains an obligation of the landlord who gives the notice of termination of the tenancy on behalf of the purchaser and does not become an obligation of the purchaser. 2020, c. 16, Sched. 4, s. 5.

...

57 (1) The Board may make an order described in subsection (3) if, on application by a former tenant of a rental unit, the Board determines that,

(a) the landlord gave a notice of termination under section 48 in bad faith, the former tenant vacated the rental unit as a result of the notice or as a result of an application to or order made by the Board based on the notice, and no person referred to in clause 48 (1) (a), (b), (c) or (d) occupied the rental unit within a reasonable time after the former tenant vacated the rental unit;

(b) the landlord gave a notice of termination under section 49 in bad faith, the former tenant vacated the rental unit as a result of the notice or as a result of an application to or order made by the Board based on the notice, and no person referred to in clause 49 (1) (a), (b), (c) or (d) or 49 (2) (a), (b), (c) or (d) occupied the rental unit within a reasonable time after the former tenant vacated the rental unit; or

(c) the landlord gave a notice of termination under section 50 in bad faith, the former tenant vacated the rental unit as a result of the notice or as a result of an application to or order made by the Board based on the notice, and the landlord did not demolish, convert or repair or renovate the rental unit within a reasonable time after the former tenant vacated the rental unit. 2006, c. 17, s. 57 (1).

(2) No application may be made under subsection (1) more than one year after the former tenant vacated the rental unit. 2006, c. 17, s. 57 (2).

(3) The orders referred to in subsection (1) are the following:

1. An order that the landlord pay a specified sum to the former tenant for all or any portion of any increased rent that the former tenant has incurred or will incur for a one-year period after vacating the rental unit.

1.1 An order that the landlord pay a specified sum to the former tenant as general compensation in an amount not exceeding the equivalent of 12 months of the last rent charged to the former tenant. An order under this paragraph may be made regardless of whether the former tenant has incurred any actual expenses or whether an order is made under paragraph 2.

1.2 An order that the landlord pay a specified sum to the former tenant for reasonable out-of-pocket moving, storage and other like expenses that the former tenant has incurred or will incur.

2. An order for an abatement of rent.

3. An order that the landlord pay to the Board an administrative fine not exceeding the greater of $10,000 and the monetary jurisdiction of the Small Claims Court.

4. Any other order that the Board considers appropriate. 2006, c. 17, s. 57 (3); 2020, c. 16, Sched. 4, s. 9 (1).

(4) In an application under subsection (1), the Board may find that the landlord gave a notice of termination in bad faith despite a previous finding by the Board to the contrary. 2006, c. 17, s. 57 (4).

Elkins v. Van Wissen, 2023 ONCA 789 (CanLII)

[43] On a plain reading of ss. 49(1) and 57(1)(b), the landlord’s conduct is linked to the purchaser’s good faith. Section 49(1) permits the landlord to, on behalf of the purchaser, give the tenant a termination notice so long as the purchaser, in good faith, requires possession of the rental unit for the purpose of residential occupation. Section 57(1)(b) requires the Board to determine, among other things, whether the landlord gave the s. 49 termination notice in bad faith. When ss. 49(1) and 57(1)(b) are read together, it is clear that the object of those provisions is to prevent the sale of a property from being used to unlawfully evict a tenant. Accordingly, the Board must consider all the evidence before it that is relevant to the landlord’s bad faith under s. 57(1)(b). It is an error of law for the Board to restrict its consideration to the evidence at the point in time when the landlord gives the tenant a s. 49 termination notice. This case makes that point.

(...)

[45] It could be argued that s. 57(1)(b) implicitly limits Board scrutiny to the landlord’s knowledge when it gives the s. 49 termination notice. However, such an interpretation runs afoul of s. 202(1) of the RTA. Under s. 202(1), the Board is required, when making findings on an application, to ascertain the “real substance of all transactions and activities relating to…a rental unit and the good faith of the participants”. Limiting the assessment of a landlord’s bad faith to that single point in time when the s. 49 termination notice is given precludes the Board from both ascertaining the true substance of the transaction between the landlord and the purchaser and conducting a fair assessment of their good faith.

(...)

[50] At para. 22 of Duarte v. 2132338 Ontario Ltd., 2021 CanLII 146522 (Ont. L.T.B.), a Board decision issued after the decision was rendered in this case, the Board stated:

22. [I]n relaying the Purchaser’s intentions to terminate the tenancy, the Landlord does not serve as a mere messenger with no duties or obligations to the Tenants. By conveying the Purchaser’s stated intention to occupy the rental unit, the Landlord initiated events that had the serious consequence of ending the tenancy and compelling them to relocate their family…As a result, I find that the Landlord had a duty to the Tenants to exercise some due diligence to confirm the good faith intentions of the Purchaser before putting the eviction in motion. Otherwise, an unscrupulous purchaser would be free to use a landlord as a straw man to divest tenants of their housing and thereby evade the statutory protections afforded to them under the Act.

[51] I agree.

(...)

[55] Section 49(1) empowers the landlord to give the tenant a termination notice “on behalf of the purchaser…if the purchaser in good faith requires possession” of the rental unit “for the purposes of residential occupation”. Accordingly, an unlawful eviction under s. 49(1) can occur in one of three ways: (1) the landlord gives the s. 49 termination notice in bad faith but the purchaser genuinely requires personal possession of the rental unit; (2) the landlord gives the s. 49 termination notice in good faith but the purchaser does not genuinely require personal possession; or (3) the landlord and purchaser each independently act in bad faith or collude, in bad faith, to evict the tenant by means of a s. 49 termination notice. If the Board considers only the landlord’s bad faith, and it was the purchaser who was not acting in good faith, the purchaser is shielded from any consequence under the RTA and the tenant loses an opportunity for redress as against the purchaser. Such a result undermines the RTA’s stated purpose, in s. 1, to protect tenants from unlawful evictions.

SWT-14614-18 (Re), 2018 CanLII 88677 (ON LTB)

20. For all of these reasons, I find on the balance of probabilities that the Landlords served the N12 Notice in bad faith.

21. Whether the Tenants vacated the unit on December 31, 2017 or January 30, 2018 according to the competing timelines of the parties, it was not disputed that the Tenants moved out of the rental unit as a result of the N12 Notice. I find on the balance of probabilities that the date listed in the T5 Application of January 13, 2018 is actually more likely accurate than either of the two dates offered at the hearing since this date is supported by a U-Haul receipt that would only logically pertain to the date that the Tenants moved out of the rental unit.

22. Lastly, on the Landlords’ own evidence, no person listed in paragraphs (a), (b), (c) or (d) of subsections 49(1) or 49(2) of the Act occupied the rental unit as of the date of the hearing. Specifically, neither the Landlords nor their son, nor anyone else moved into the rental unit. Even if I were to accept the Landlords’ evidence that the Tenants did not move out of the rental unit until January 30, 2018, this would leave the unit vacant for over two and a half months. As the Landlords offered no reasonable explanation for this lack of occupation and no definite timeline for their son’s future and theoretical move from Toronto, I find that no one has occupied the rental unit within a reasonable time after the Tenants vacated the rental unit.

23. In light of all of the evidence, I therefore find that the Landlords gave the Tenants the notice in bad faith.

TST-00312-18 (Re), 2019 CanLII 87633 (ON LTB)

12. By the Tenant’s own evidence, the purchaser’s mother or mother-in-law occupies the rental unit and has been doing so since at least the end of October, 2018 or beginning of November, 2018. A parent of the purchaser or of the purchaser’s spouse are people referred to in section 49(1)(c) of the Act. I am satisfied that this individual occupied the rental unit within a reasonable time after the Tenant vacated the rental unit. I do not think that the fact that the N12 Notice indicates that the purchaser (as opposed to the purchaser’s parent or a spouse’s parent) intended to move in is in itself determinative of bad faith. Section 57(1)(b) refers a situation where none of the people listed in section 49(1) or (2) move into the rental unit (it does not appear to be material if the person who moved into the rental unit is not the same person listed on the N12 Notice). Therefore, I find that this element of section 57(1)(b) is not satisfied.

TST-00354-18 (Re), 2019 CanLII 87648 (ON LTB)

8. The Tenant testified that he visited the residential complex on February 23, 2019. On that day, the Tenant spoke to the person living in Unit A. That individual claimed to be the mother of the new owner of the house. She told the Tenant that the people who live in the rental unit are not members of the purchaser’s family but they are renting the rental unit on a temporary basis while the home they own is being renovated.

9. On February 23rd the Tenant also spoke to one of the people living in the rental unit. This individual told the Tenant that she is not the new owner/landlord but she would not share any more information about herself with the Tenant.

10. Based on the Tenant’s uncontested evidence, I am satisfied on a balance of probabilities that neither the purchaser nor anyone else listed in section 49(1) or (2) of the Act occupied the rental unit within a reasonable time after the Tenant moved out. Without any explanation from the Landlord or the purchaser about the course of events, I find that the purchaser did not intend to move into the rental unit at the time the N12 Notice was served. Therefore, I am satisfied on a balance of probabilities that the Landlord provided the Tenant the N12 Notice in bad faith

Berger v Regier, 2021 CanLII 124096 (ON LTB)

4. The parties do not dispute that in April 2018 the Landlord gave the Tenant an N12 Notice of Termination under 49 of the Act with a termination date of June 30, 2018. In the N12 Notice, the Landlord claimed that she required vacant possession of the rental unit because the Landlord sold the unit and the purchaser intended to move into the unit. The parties also do not dispute that the Landlord filed an application with the LTB based on this N12 Notice (file number HOL-02786-18), a hearing was held on June 26, 2018 and an order was issued terminating the tenancy on July 31, 2018.

5. The parties also do not dispute that the agreement of purchase and sale between the Landlord and the purchaser did not close and the purchaser never moved into the rental unit.

6. The parties further do not dispute that the Tenant moved out of the rental unit on July 18, 2018. However, they disagree about the reason the Tenant moved out of the rental unit. The Tenant claims that she moved out of the rental unit pursuant to the LTB’s order HOL- 02786-18, which is directly connected to the N12 Notice the Landlord gave her. The Landlord’s position is that the Tenant moved out as a result of a different order the LTB issued in connection with a separate application about non-payment of rent. Based on the evidence before me, I prefer the Landlord’s position on this issue.

TST-94743-18 (Re), 2018 CanLII 123237 (ON LTB)

25. The first part of the test requires me to look at the intention of the Landlords at the time the N12 notice was given. At the time of the N12, did the Landlords serve the N12 in good faith, i.e. to provide vacant possession for the purchasers’ residential occupation? In looking at this question, the law is clear that I may consider the conduct and motives of the Landlords to draw inferences about the Landlords’ good faith.

26. LK has testified that, at the time he served the N12 Notice, he believed that the purchasers were going to move into the unit. This evidence was not seriously contested by AJ. In her final submissions, AJ indicated that she did not believe that LK served the N12 in bad faith.

27. I am compelled by LK’s evidence’s in this regard: it was given in a straightforward and consistent manner. I am satisfied, on a balance of probabilities, that the N12 was served by LK in good faith because he actually believed that the purchasers required the unit following closing for residential use.

28. Based upon the totality of the evidence provided, I am satisfied that the Landlord served the N12 in good faith. Because the Tenant has not satisfied all the required elements of the test to succeed in this application in s.57(1)(b) of the Act, this application will be dismissed.

29. In light of my finding in paragraph 28 above, it is unnecessary to consider the Landlords’ argument that the payments to the Tenants before they vacated fully compensated them for the remedies sought in this application.

SWL-95963-16 (Re), 2017 CanLII 28669 (ON LTB)

Determinations:

T6/ Tenant’s Application about Maintenance

1. The Landlords failed to ensure that the pesticides used to treat the pest infestation were removed from the premises. Therefore, I find that the Landlords failed to meet the Landlords' obligations under subsection 20(1) of the Act to maintain the rental unit and failed to comply with safety standards.

2. The Tenant has been unable to live in the premises or use many of her personal belongings since approximately August 10, 2016, due to the presence of pesticides and pesticide residue.

3. Some of the Tenant’s property was damaged by continued exposure to pesticides.

T2/ Tenant’s Rights Application

1. The Landlords’ failure to takes steps to clean the pesticides from the premises substantially interfered with the Tenant’s reasonably enjoyment of the premises to the point that she could not live in her home or use her property.

L2/Notice to Terminate at End of the Term for Landlord’s or Purchaser’s Own Use (N12)

1. The Landlords did file affidavits attesting to their good faith intention to personally occupy the rental unit.

2. The Board is prohibited from terminating the tenancy because the Landlord is in serious breach of the Landlord’s obligations.

L2/ Notice to Terminate a Tenancy Early (N5)

1. The Landlord gave a second Notice of Termination, which contravenes section 68 of the Residential Tenancies Act. The first Notice of Termination was not voided. The second notice cannot be used as a first notice as there is no ability to void.

It is ordered that:

1. The Application to Terminate a Tenancy and Evict a Tenant (L2) based on the Notice to Terminate at End of the Term for Landlord’s or Purchaser’s Own Use (N12) is dismissed.

...

TST-10645-19 (Re), 2020 CanLII 31285 (ON LTB)

2. This “bad faith” application was filed pursuant to section 57(1)(b) of the Residential Tenancies Act, 2006 (the “Act”), which requires a former tenant to prove that it is more likely than not that:

1) The landlord gave a notice of termination under section 49 (i.e. for purchaser’s own use) in bad faith;

2) The tenant vacated the rental unit as a result of the notice; and

3) The person listed in the N12 Notice did not occupy the rental unit within a reasonable time after the former tenant vacated the rental unit.

3. I am satisfied on a balance of probabilities that the former Landlords, VJ and SJ, gave the Tenant an N12 Notice under section 49 for purchaser’s own use. I am also satisfied that the Tenant moved out of the rental unit as a result of the N12 Notice he received. The Tenant testified that the only reason he gave VJ and SJ an N9 Notice to terminate the tenancy early (which he was entitled to do pursuant to subsection 49(4) of the Act) is because he received the N12 Notice and then found a new place to live. I am further satisfied that the new Landlord, CRE, did not move into the rental unit within a reasonable time after the Tenant moved out because she had the rental unit advertised for lease less than two months later.

4. With respect to the determination of bad faith, I find that although the former Landlords, VJ and SJ, gave the Tenant the N12 Notice, they did so only at the request of the new Landlord, CRE, and based on their honest belief that CRE was intending to move into the unit, as she represented to them. VJ testified that he and SJ have no relationship with CRE and they had no reason to doubt CRE’s assurances to them that she intended to move into the rental unit. Accordingly, I find that the N12 Notice was given in bad faith but the bad faith can only be traced back to CRE. I find that VJ and SJ should not be held liable for CRE’s dishonesty. Accordingly, only CRE will be responsible for compensating the Tenant for his losses. The application is dismissed as against VJ and SJ.