Notice of Rent Increase (N1)

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.

Williams v 1175326 Ontario Ltd., 2016 ONSC 7781 (CanLII)

[6] In late 2015, the respondent, along with other tenants, filed an application for a rebate alleging that the landlord had been charging unlawful rent since at least December 31, 2012. The Board heard the matter over two days. With the exception of three tenants, the Board dismissed the tenants’ application. In doing so, the Board determined that the unsuccessful tenants (who included the respondent) had not challenged the rent increases within the one year limitation provided for in the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (“RTA”) and thus had lost their rights to dispute the rent increases.

[7] The unsuccessful tenants sought a review of the Board’s decision. That review was dismissed.

[12] The tenant, both before the Board and now on this appeal, places her entire argument on her reading of the decision in Price v. Turnbull's Grove Inc. (2007), 2007 ONCA 408 (CanLII), 85 O.R. (3d) 641 (C.A.) which she says renders the manner, in which the landlord proceeded with its Notices of Rent Increase, a nullity. The respondent needs to have the finding of a nullity, in other words that the Notices of Rent Increase are void, in order to avoid the effect of s. 136 and the one year limitation period.

[13] The Board held that the respondent’s reading of Price was fundamentally flawed. The Board held that the principle in Price only applied if the landlord failed to give the requisite written notice. It did not apply if the flaw in the Notice related to other matters, such as an improperly calculated or claimed rent increase.

[14] In my view, the Board’s conclusion in this regard is correct. It is supported by the plain language of the decision in Price. The respondent’s contention that the finding of a nullity can go beyond the notice requirement is not only incorrect, it is expressly rejected by that decision. Indeed, the factual circumstances raised in this matter were specifically addressed in Price, where Cronk J.A. said, at para. 42:

Fifth, while Part VI of the Act prohibits various conduct in respect of rent and rent increases, only conduct concerning a rent increase that offends s. 127(1) renders the increase void under Part VI. This signifies the importance of the s. 127(1) notice requirement to the rent control scheme established by the Act. For example, rent charged in contravention of s. 121(1) of the Act - rent in an amount that is greater than the lawful rent permitted under Part VI of the Act - is not deemed to be void under Part VI of the Act. This type of “tainted” rent charge, therefore, could be subject to the remedial effect of s. 141(1) of the Act in a proper case. Similarly, where proper notice of a proposed rent increase is given in conformity with s. 127(1) of the Act, but the amount of the proposed increase exceeds the permitted increase prescribed by the guideline under the Act - in contravention of s. 129(1) of the Act - s. 141(2) may be engaged.

[17] One other argument should be addressed. The respondent points to the fact that there was an earlier decision of the Board, involving this same building, that concluded, in similar circumstances, that the Notice of Rent Increase was void. I make the following observations with respect to that argument. First, the Board member here was not bound by an earlier decision of another Board member. While consistency is desirable as a general rule, it is not a requirement. Second, the earlier decision turns on a misreading of the decision in Price. The Board member here was not obliged to follow a flawed decision, even in the interests of consistency. Third, the earlier decision is not, of course, binding on this court. This court is, however, bound by the decision of the Court of Appeal.

[18] The appeal must therefore be quashed.

Service of NORI

TSL-72945-16 (Re), 2016 CanLII 53015 (ON LTB)

12. Moreover, I note that, on October 30, 2015, some five months before the Landlord filed the within application and the Tenant became aware of these proceedings, the Tenant delivered a letter to the Landlord stating, in part, “I have never been notified of any rent increase since the initial increase to $1015 in April 2014.” The Tenant then proceeds to ask the Landlord for information and clarification about the arrears claimed in the N4 notice. Equally telling, is the Tenant’s statement in the said letter where he informs the Landlord as follows: “If rent is going up, notify me, and I will pay the increase (if it is reasonable). I can pay $1050 monthly. That is not the issue.” The Tenant’s letter, in my view and for the reasons stated, corroborates his testimony that he was not served with a NORI 90 days prior to April 1, 2015. It appears that the Landlord’s response to the Tenant’s letter was to file this application with the Board.

13. For these reasons I find, on a balance of probabilities, that the Landlord failed to serve the Tenant with a NORI 90 days prior to April 1, 2015 and, accordingly, the rent increase claimed by the Landlord to have taken effect on that date is unlawful.

TSL-80962-17 (Re), 2017 CanLII 60295 (ON LTB)

20. The Act and the Board’s Rules require a landlord to provide a tenant with documents, including NORIs, and, if they are served in accordance with the Act and Rules, they are deemed to have been served whether the tenant receives them or not. It is only when documents are not served in accordance with one of the permissible methods set out in subsection 191(1) of the Act or Rule 5 that a landlord must prove the tenant actually received them (pursuant to subsection 191(2) of the Act).

21. Here, the certificate of service provided by the Landlord states that the NORI was served to the Tenant, by AC, in accordance with one of the permissible methods set out in subsection 191(1) of the Act. In particular, by placing the document under the door of the rental unit on August 16, 2016. Moreover, AC’s affirmed and uncontradicted testimony was to the same effect. I further note that the Tenant acknowledged that he received the N5 notice of termination that was served to him, by AC, at the same time as the NORI. As well, NO, who initially testified that he was unaware of the NORI at issue, later conceded that it is possible that the Tenant received the NORI and did not bring the document to his attention. NO also testified that he was unaware that the Tenant was served with the N5 notice on August 16, 2016—something readily admitted by the Tenant.

22. AC was cross-examined by the Tenant’s legal representative during the sitting of this matter on March 27, 2017. His testimony going to the service of the NORI to the Tenant remained unshaken, was provided in a straightforward fashion and was wholly devoid of internal inconsistencies and was consistent with the documentary evidence provided.

SWT-00924 (Re), 2008 CanLII 82447 (ON LTB)

5. I believe the RTA and the Court of Appeal decision make it clear that where notice to increase the rent did not give 90 days notice, the notice is void – a nullity – as though it never existed. Section 116(4) of the RTA makes it clear that a landlord must first give a new, valid, notice before any increase may be taken from a tenant. The Landlord’s honest, but mistaken, belief while understandable cannot change the application of the law. In light of this, I must find that none of the Landlord’s notices complied with either the TPA or the RTA. Accordingly, all of the Landlord’s notices are void and it is as though they never existed.

6. As the Court of Appeal explored in Price, even though the Tenant has paid the unlawful rent for more than 12 months this rent cannot be “deemed lawful” as section 136 is not intended to make a void increase lawful. Therefore, this section will not be applied in this case.

TSL-22903-11 (Re), 2012 CanLII 21464 (ON LTB)

8. Section 123 says: “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… A parking space.”

9. What this means is that the twelve month rule does not apply to increases in the rent that result from a landlord and tenant agreeing to add a service like parking. In other words, a landlord has the right to increase the rent once a year and that right is not affected by tenants choosing to add services between anniversary dates.

10. With respect to the argument that the base rent used on the NORI should have been the amount the Tenant was paying on the date the NORI was served is not an argument explicitly addressed by the Act. That being said, it seems to me that the very concept of an “increase” means that on a certain date the rent will go from A to B and B must be calculated based on A. So if a NORI is served for October 1, 2010 the proper starting rent to base the increase on must be the rent that was in effect for September, 2010. To say that the starting rent should be the amount charged back in May on the date the NORI was served is not particularly logical given the concept of an increase which occurs at one date in time. More importantly, if the argument was accepted it would defeat the explicit intention of subsection 119(2). As a result, I am satisfied that a rent increase that is supposed to be effective October 1, 2010 should be based on the rent charged for September, 2010 plus the increase sought.

7. In my view, it is not the date on which the NORI was prepared that determines its validity; rather, it is the date on which it is served. It is the giving of notice in a form approved by the Board containing the information required by the Act and with the amount of notice required by the Act, which is the prerequisite to the right of a landlord to increase rent under section 116 of the Act. The purpose of giving notice would not be served if the information contained in the notice is inaccurate at the time notice is given. In this case, before the Second NORI had been served, the lawful rent had been established by the AGI Order on November 24, 2016. The requested increase of 3.59% above that lawful rent would not result in a new rent amount of $1,684.60 as was stated in the Second NORI, but would result in a new rent of $1,678.28. Therefore, the information contained in the Second NORI was inaccurate at the time it was given to the Tenant in December, 2016 because it overstated how much the new rent would be if the Landlord succeeded on its second AGI application.

24. I am not convinced that the error relating to the AGI portion of the increase on the Second NORI resulted in any confusion on the part of the Tenant in relation to the guideline portion of the increase. I am also satisfied, pursuant to section 212 of the Act, that the Second NORI substantially complies with the Act in relation to an increase by the guideline amount.

Lawful Base Rent

TEL-86883-17-RV (Re), 2019 CanLII 126904 (ON LTB)

17. In very general terms, under the Act the lawful monthly rent is the rent that is charged at the beginning of the tenancy plus any lawful increases or decreases.

18. That general rule is found in section 113. But that provision explicitly states it is subject to section 111 which is about rent discounts. In other words, discounts like the ones offered here are permitted. I agree with the Tenant that they can be very consuming and even misleading because most people would think the lawful monthly rent charged is the amount the Tenant must actually pay. When rent discounts are involved that is actually not the case.

19. The other limitation on the general rule is s. 136. That provision stands for the proposition that where a tenant receives a notice of rent increase under the Act that meets all of the legal requirements of the Act, but gets the amount of the increase wrong, that increase becomes lawful if a year passes without it being an issue raised in an application to the Board.

20. This application was filed with the Board on December 15, 2017. So section 136 means that any notice of rent increase served on this Tenant prior to December 15, 2016 is deemed to be lawful regardless of the amount of the rent claimed as long as the notice otherwise meets the requirements of the Act.

21. So whether or not the former landlord was right or wrong to raise the lawful monthly rent to $877.81 on June 1, 2016, is no longer an issue that the Board can engage with. The NORI served by the former landlord meets all of the requirements of the Act. More than a year passed before an application was filed with the Board in which the rent charged is an issue. Pursuant to subsection 136(1), $877.81 is deemed to be the correct lawful monthly rent as of June 1, 2016 because of the passage of time.

O’Shanter Development v. Bernstein, 2018 ONSC 557 (CanLII)

[12] The Board identified that the central issue to be determined in the case was whether the Landlord’s notices of rent increase comply with the requirements of the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (RTA). The Board noted that the Landlord’s representative agreed at the hearing that, if the Board determines that the Landlord’s notices of rent increase are defective, the Landlord’s applications to terminate the tenancy and evict the Tenant for non-payment of rent must be dismissed.

[22] I agree with the Tenant’s position that the rent control scheme and the notice requirements under s. 116 of the RTA are a core function wholly within the Board’s specialized expertise. In these circumstances, deference is afforded to Board Member Cho’s decision. (Onyskiw at paras. 35 and 36)

[32] I agree with the position of the Tenant on this issue. I am satisfied that Board Member Cho considered all of the Landlord’s submissions within the context of the evidentiary record before him, the relevant section of the RTA and case law and the submissions of counsel. The central issue to be determined by the Board was the validity of the Addendum. In doing so Board Member Cho acted reasonably.

[37] As noted, in determining that the remedy of estoppel was not available to the Landlord, the Board relied on the Court of Appeal decision of Price v. Turnbull’s Grove which held that a rent increase that is void under the RTA is of no force and effect. In agreeing with the Tenant’s submission that where a matter is a nullity, the remedy of estoppel is not available, the Board went on to say at para. 7 of the decision:

I agree, because a nullity by definition is something that holds no legal force and has no legal validity. A rent increase that is void under the Act is therefore void, ab initio. Because section 3 of the Act does not permit parties to contract out of the Act’s protections, or otherwise waive their rights and obligations under the Act, I am not persuaded by the Landlord’s representative’s submission that the Tenant’s consent to previous orders concerning the lawful rent estops the Tenant from challenging the rent at this time. Indeed, prohibiting the Tenant from raising the validity of the Landlord’s NORIs at the hearing could lead to an absurd result, if the Board were to uphold and legitimize an invalid rent increase. Such a result would offend the purpose of the Act, which is, in part, ‘to provide protection for residential tenants from unlawful rent increases and unlawful evictions”.

[38] What is important to note is that the NORIs that the Tenant challenged as being void, were dated October 25, 2011 and November 29, 2012. They were served on her and other tenants in her building seeking rent increases above the guidelines commencing in 2012 and 2013 respectively. Those applications came before the Board and, as a result of the Board’s dispute resolution mechanisms, they were settled by reducing both the amount of the increases and the timing of their implementation. Subsequently, the settlements were embodied in the 2012 and 2014 Orders.

[55] The Board also made reference to and relied on s. 3(1) of the RTA in its decision. That section provides that the RTA applies “despite any agreement or waiver to the contrary.” Having regard to the purposes of the RTA as set out in s. 1 which include providing for the “adjudication of disputes and for other processes to informally resolves disputes”, the “agreement” referred to in s. 3(1) cannot be interpreted to prevent an agreement to resolve a dispute before the Board. Otherwise there could never be a resolution of a dispute under the RTA.

Guide Line Increase

Year	Rate		Year	Rate	Year	Rate	Year	Rate	Year	Rate	Year	Rate
2019	1.8		2015	1.6	2014	0.8	2013	2.5	2012	3.1	2011	0.7
2018	1.8		2010	2.1	2009	1.8	2008	1.4	2007	2.6	2005	1.5
2017	1.5		2004	2.9	2003	2.9	2002	3.9	2001	2.9	2000	2.6
2016	2.0		1999	3.0	1998	3.0	1997	2.8	1996	2.8	1995	2.9
1994	3.2		1993	4.9	1992	6.0	1991	5.4