Bad Faith - Re: N12 (LTB)

Loc Le v. O’Grady, 2018 ONSC 6387 (CanLII)

[2] The Review Order confirmed the Board’s dismissal of the Landlord’s application to terminate the residency of the Respondents (the “Tenants”). The application was dismissed pursuant to s. 83(3)(c) of the Residential Tenancies Act, 2006 (the “Act”) which provides that the Board shall refuse to grant the application where satisfied that, among other things, the reason for the application being brought is that the tenant has attempted to secure or enforce his or her legal rights.

[3] The Tenants rent the Landlord’s third floor rental unit at a monthly rate of $1,225.00. They have rented the unit for approximately the last 5 years. The tenancy agreement for the unit expired on May 31, 2017.

[4] In February 2017, the Landlord and his spouse sold their house and moved into the third floor of a house occupied by their children and other relatives.

[5] In May 2017, the Landlord approached the Tenants about increasing the monthly rate to $1,400.00, an amount well in excess of the 1.5% rent increase guideline for 2017. The Tenants refused to pay the increase but indicated a willingness to consider an agreement to increase the rent to $1,300.00 in exchange for the Landlord improving services and facilities to the rental unit. The parties were not able to arrive at an agreement as to any increase in rent or improvements to the unit.

[6] On May 31, 2017, the Landlord served the Tenants with a Notice of Termination (Form N12) which is issued where the landlord, a purchaser, or family member requires the unit for personal possession. The Tenants did not vacate the premises in accordance with the Notice. The Landlord filed an application for an order to evict the tenants on June 5, 2018, and requested the Tenants pay rent arrears each day they stay in the unit after the termination date. The Landlord and Tenant Board (the “Board”) heard the application on August 2, 2018.

[7] In its decision, the Board determined that the application should be dismissed. Although it found that the Landlord, in good faith, intended to occupy the unit pursuant to s. 48(1) of the Act, it ultimately dismissed the application pursuant to s. 83(3)(c) of the Act.

...

[26] The Appeal is dismissed. If the parties are unable to agree on costs they may make written submissions, not to exceed three pages plus attachments each, within 45 days.

Bonakdarian v Kang, 2020 CanLII 118006 (ON LTB)

7. The onus is on the Landlord to establish that the purchaser in good faith requires the rental unit for the purpose of residential occupation.

8. In the leading case law involving a landlord’s own use application, Salter v. Beljinac, 2001 CanLII 40231 (ON SCDC), [2001], O.J. No. 2792 (Div. Ct.), the Divisional Court held that:

the test of good faith is genuine intention to occupy the premises and not the reasonableness of the landlord’s proposal…

9. The Landlord submitted a Declaration of VF, pursuant to subsection 72(1) of the Act, confirming that VF requires the unit for her personal occupation for a period of at least one year. VF provided confirming testimony that she in good faith requires possession of the rental unit for the purpose of her own residential occupation and intended to live in the rental unit for at least one year after the closing date.

10. The Tenant raised several issues to contest the Landlord’s good faith intention and stated that she does not believe that the Landlord and the Purchaser VF will close the sale of the property or in the alternative it is not a sale in good faith. The Tenant also raised several arguments regarding the lack of good faith of the Landlord including the following:

• The sale of the property is not a true transfer of title and is only being made in order to wrongfully terminate the tenancy of the Tenant;

• The Landlord’s application should be denied as the Landlord has issued three prior N12 Notices of Termination to terminate the Tenant’s tenancy in the past;

• The Landlord’s application should be denied pursuant to subsection 83(3) of the Act as there is an outstanding order of the City of Toronto; and

• The Landlord’s application should be dismissed as the Landlord is attempting to sell the rental unit wrongfully including the Tenant’s appliances in the sale.

...

20. It was uncontested that the Landlord had also served the Tenant with the Notices and applications as listed below.

Application Number	Grounds	Determination
TSL-92202-18	N12 for Purchaser Use	Withdrawn by LL as Agreement fell through as the Purchaser withdrew
TSL-98852-18	N12 for Purchaser Use	Dismissed for technical reasons
TSL-00881-18	N12 for Purchaser Use	Dismissed: Agreement with the current Purchaser was still conditional and not certain to close

21. The Tenant testified that these applications show that the Landlord has acted in bad faith and has repeatedly attempted to terminate her tenancy.

22. The Landlord testified that he brought each of the prior applications in good faith but that there were difficulties with each of them. In the first, he had a valid agreement of purchase and sale as the purchaser failed to close the sale. In good faith, he did advised the Board and the Tenant and the application was withdrawn. This was not a bad faith attempt to terminate the tenancy but confirmed his intention to sell the property.

23. As well, the third application was dismissed as it was brought prematurely as the conditions on the Agreement of Purchase and Sale had not yet been waived. The Landlord testified that once the conditions were waived, he refiled this application in order to close on the sale of the unit.

24. Based on the evidence before the Board, on the balance of probabilities I find that the Landlord has attempted twice to sell the property, with one deal not closing and the other in process. I do not find that this demonstrates bad faith.