Guarantors and Co-Signers Liability (RTA Leases)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-10-01
CLNP Page ID:	2167
Page Categories:	[Contract Law, Leases, & Sub-Letting (LTB)]
Citation:	Guarantors and Co-Signers Liability (RTA Leases), CLNP 2167, <https://rvt.link/4k>, retrieved on 2024-10-01
Editor:	Sharvey
Last Updated:	2023/02/28

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Stamm Investments Limited v Ryan, 2015 CanLII 52577 (ON SCSM)

3. The tenancy started on February 1, 2012. Mr. Ryan and Ms. Marks were the tenants and Ms. Brooks signed on as a guarantor of their obligations under the lease. The terms of the guarantee refer to the guarantor’s obligations being co-extensive with those of the tenants, stating that the guarantor’s obligations continue until “lawful termination of the Tenancy Agreement”.

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18. I accept the plaintiff’s submission that the Landlord and Tenant Board has no jurisdiction over guarantors. In other words where a landlord is owed arrears of rent by tenants it can proceed before the board against the tenants but the board cannot make an order against the guarantor because a guarantor is not a “tenant” within the meaning of the Act: 501606 Ontario Ltd. v. Manbauhar, 1998 CarswellOnt 6412 (ORHT).

19. Accordingly I find that the board’s exclusive jurisdiction under s. 168(2) of the Act cannot oust the court’s jurisdiction to entertain a claim against a guarantor of a residential tenancy.

20. However, on the merits I find that no amount is owed by the tenants and so there is no basis for a judgment against the guarantor in this case.

21. Regarding the narrow question whether the sheriff’s fee of $325 can be claimed in this court from the guarantor, in my view it cannot. The board’s order makes no award for that item and therefore the tenants are not liable for it. The guarantor’s liability being co-extensive with that of the tenants, she is not liable for the sheriff’s fee.

Singh v Fitzgerald, 2020 CanLII 117594 (ON LTB)

10. With respect to Rita Fletcher, I find that she is a guarantor (and occupant), but not a tenant. First, Rita did not actually sign the agreement, rather her name was written on the lease. Further, according to the Landlord’s evidence this was only done because the Tenant did not have proof of her income. Furthermore, aside from her phone number, no other information concerning Rita was requested or obtained by the Landlord.

11. In the context of finances and residential tenancies, a guarantor, while not defined in the Act, is generally understood as someone who takes responsibility on behalf of a debtor in the event that a debtor ceases to pay. However, the Board does not have the authority to make an order against a guarantor and only tenants can be named as respondents in rent arrears applications.

12. Finally, with respect to Ryan, I find him to be an occupant of the rental unit and not a tenant. The evidence of both parties was that he was asked to sign the lease by the Landlord simply because he was present on the day the parties entered into the agreement. I take this to mean an acknowledgement of his intended occupation of the rental unit as opposed to an intention to become a party to the tenancy agreement.

13. The application is amended accordingly to identify the proper parties.

Doucette-Grasby v Lacey, 2013 CanLII 95661 (ON SCSM)

59. That exhausts the areas of damage for which the plaintiffs seek compensation. There remains to be dealt with the claim against the Estate of William Millar, the alleged guarantor of the Cheryl Lacey’s lease.

60. This claim is premised on the signature of William Millar at the end of the lease beside “Guarantor” but it also depends upon paragraph 25 of the lease:

25. In consideration of the execution and delivery of this Tenancy Agreement by the Landlord, the guarantor as principal debtor agrees to execute an agreement made collateral to this Tenancy Agreement which, upon execution by the Guarantor and the Landlord shall be deemed to constitute a part of and be incorporated into this Tenancy Agreement with the Guarantor deemed to be a party to this Tenancy Agreement. the Guarantor further agrees that liability under the guarantee shall continue until such time as this Tenancy Agreement is terminated and the Guarantor continues to be liable and bound by this guarantee during any renewals and extensions, statutory or otherwise, of the term of this Tenancy Agreement.

61. The collateral agreement referred to in this paragraph has not been submitted into evidence, and I heard no evidence to suggest that it exists. On my reading of paragraph 25, the collateral guarantee agreement is the vehicle by which the guarantor will become liable. This lease was presented by the plaintiffs’ agent as the terms under which the premises would be leased. This was their standard lease. Even if paragraph 25 was amenable to other interpretations than the one I have given it above, I would apply the principle of contra proferentem, and hold that the lease must be interpreted against the party who presented it as the terms upon which they would do business. These terms were not the subject of negotiation and mutual settlement by both parties. The wording was entirely selected by the plaintiffs or their agents. Therefore, in the absence of the collateral agreement by which the guarantor might become liable, I find that the Estate of William Millar is not liable for any claims under this lease.