Contractual Basis for Rent Increases (LTB)

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.

TET-05754-10 (Re), 2010 CanLII 52145 (ON LTB)

2. In a ruling by the Divisional Court in “Opara v Cook” the Court stated “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 been reached”. In this matter the parties entered into a rental contract and the Tenant wanted to unilaterally rescind his offer to rent. The Tenant resolved his domestic situation and decided to back out of the contract. As cited above this is not permitted under the ordinary rules of contract law.

TNT-71808-15 (Re), 2015 CanLII 76626 (ON LTB)

3. It is not in dispute that the Landlord called the Tenant to inform him that the rent would be increased. This would not have been necessary if there was no previous agreement on the amount of the rent. In Opara v Cook (2008) O.J. No 1934 (Ont. Div. Ct.) the court stated with respect to tenancy agreements, “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 been reached”. Likewise a party does not have the ability to unilaterally change the terms and conditions of such a contract.

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.

Drewlo Holdings Inc. v. Custidio 2009 CarswellOnt 9151

1. Custidio signed a lease. She was a tenant and not a prospective tenant when she repudiated the lease. Bd decisions have interpreted "prospective tenant" as someone at the application stage. That is not the case here where a tenancy agreement was entered into. Since Custidio was not a prospective tenant, S.107 of the Residential Tenancies Act does not apply. There is nothing in S.106 to require the Landlord to refund the deposit in these circumstances. There is nothing to distinguish this case from the Divisional Court case in Opara v. Cook, 2008 CarswellOnt 2747 (Ont. Div. Ct.).

Drewlo Holdings Inc. v. Weber, 2011 ONSC 6407 (CanLII)

[1] Drewlo appeals an order of the Landlord and Tenant Board dated February 3, 2011 and a Review Order of February 8, 2011 holding that a rent increase of 9 percent levied against pet owning tenants was an impermissible premium or penalty proscribed by Section 134(1)(a) of the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (the RTA) , and as such interfered with Weber’s reasonable enjoyment of her apartment. The Board awarded an abatement of the increased rent charged pursuant to Section 31(1)(c) of the RTA. The appellant submits that the abatement remedy is available only if an application is brought under Section 29 of the RTA. It is not an available remedy, the appellant submits, under Section 135(1) of the RTA for a breach of Section 134.

[2] For the reasons that follow we disagree.

[9] In our opinion, it was appropriate for the Board to have recourse to Section 202 of the RTA to ascertain the real substance of the rent increase. Section 14 of the RTA voids prohibitions in leases against pet ownership. The Act also provides a mechanism for a landlord to recover compensation for damage caused by pets and in certain circumstances, to obtain an order terminating a tenancy because of a pet. The Board found that the real substance of the rent increase was to extract a premium or penalty from pet owning tenants. Although taking the position on the hearing before us that the real substance was irrelevant, Drewlo conceded that the finding was reasonable on the evidence before the Board. The Board then found that “…a tenant’s reasonable enjoyment of the property…includes the expectation that they [sic] will not be made subject to premiums, penalties or other charges for otherwise lawful conduct.” We find that was a reasonable finding that was open to the Board.