Bad Faith - s. 202 (Tenant)

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Date Retrieved:	2025-09-15
CLNP Page ID:	2426
Page Categories:	Personal Use Application (LTB)
Citation:	Bad Faith - s. 202 (Tenant), CLNP 2426, <https://rvt.link/dh>, retrieved on 2025-09-15
Editor:	MKent
Last Updated:	2025/09/10

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

Findings of Board

202 (1) In making findings on an application, the Board shall ascertain the real substance of all transactions and activities relating to a residential complex or a rental unit and the good faith of the participants and in doing so,

(a) may disregard the outward form of a transaction or the separate corporate existence of participants; and

(b) may have regard to the pattern of activities relating to the residential complex or the rental unit. 2006, c. 17, s. 202.

Exception

(2) Subsection (1) does not apply to an application made under Part V.1.

Pinto v. Regan and White v. Regan, 2021 ONSC 5502 (CanLII)

[40] Section 202 of the RTA imposed a statutory duty on the Member to determine questions of fact and to apply governing principles of law to ascertain the real substance of the transactions and activities regarding the rental units at issue, and the good faith of the parties to the N11. The Member did not consider all the evidence to determine the element of good faith on the part of the respondent other than making a passing reference in the Reasons. The Member did not take the totality of the evidence into account when he applied the substantive law. This amounted to an error of law.

Fava v. Harrison, 2014 ONSC 3352 (CanLII)

[17] We accept, as reflected in Salter, supra, that the motives of the landlord in seeking possession of the property are largely irrelevant and that the only issue is whether the landlord has a genuine intent to reside in the property. However, that does not mean that the Board cannot consider the conduct and the motives of the landlord in order to draw inferences as to whether the landlord desires, in good faith, to occupy the property.

[18] In this case, Board Member Beckett made a finding of fact that the notice that one of the landlords wished to occupy the property was not given in good faith. She decided that the credibility of the landlords was undermined because one of the landlords took the position that she wished to live in the house notwithstanding the other landlord’s belief that the unit was unsafe. In our view, the Board was entitled to take this into account in assessing the landlord’s credibility and in assessing the landlord’s good faith. In our view, Board Member Van Delft’s conclusion restricts the meaning of the term “good faith” to an unreasonable degree. By excluding any consideration of the landlord’s motives in deciding whether the landlord has acted in good faith, she has unduly restricted the consideration the Board must give to that term. We see nothing in Salter or Feeney, supra, to the contrary.

Fraser v. 1392383 B.C. Ltd., 2025 BCSC 1669 (CanLII)

[71] On judicial review, this Court does not determine good faith afresh but asks whether the arbitrator reasonably applied the correct legal test. In Aarti, the Court of Appeal clarified that the test for “good faith” in s. 49 of the RTA requires more than accepting a landlord’s stated intention at face value. The inquiry the arbitrator must undertake has two elements: (1) whether the landlord genuinely intends to occupy the unit (or otherwise use it for the stated statutory purpose); and (2) whether that intention is free of any ulterior or improper motive. An arbitrator must therefore not only identify the issue of good faith but must also grapple with the tenant’s evidence of an ulterior motive and make findings on that evidence (<iAarti, at para. 39).

[72] In applying this test, the Court of Appeal in Aarti emphasized that “good faith” requires an honest and genuine intention to follow through with the stated purpose, unaccompanied by any dishonest or ulterior motive.

[73] Whether the honest motive is primary or secondary is immaterial; any improper motive may invalidate the notice: Aarti at paras. 37–39. Thus, even where a landlord may genuinely and honestly intend to appoint a caretaker, if the choice to situate the caretaker in a particular unit is influenced by the ulterior goal of displacing a long-term tenant paying below-market rent, the notice cannot be said to have been issued in good faith.

(...)

[76] The modern approach to statutory interpretation, as articulated in Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, 1998 CanLII 837 (S.C.C.), requires that statutory provisions be interpreted harmoniously with the scheme and object of the overarching Act. The RTA forms part of the suite of legislative instruments that “support and protect the rights of both landlords and tenants, ensuring that all tenancy business is conducted properly and fairly.”