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.

Wu v. Adler, 2022 ONSC 188 (CanLII)

[14] The trial judge found as a fact that when the initial term of the lease expired, “no further lease, assignment, or sublet agreement was entered into by any of the parties.” Such being the case, he held that s. 38(1) of the Residential Tenancies Act applied and that the appellant remained bound by the terms of the expired lease.

[15] In his closing argument, the appellant took the position that the lease had been assigned to Ms. Adler, and that as a result, he was not responsible for rent accruing after the end of the initial lease term or for damages occurring to the premises after the end of the initial lease term. The trial judge disagreed and held that because there was no evidence that the landlord had consented to such an assignment, the lease had not been assigned. I would add that there was no evidence that the appellant had even purported to assign the lease.

[16] Quoting from s. 95(8)(b) of the Act, the trial judge also held that even if the lease had been assigned, the appellant would have remained liable. However, in doing so, he failed to note that the section provides that the former tenant remains liable for any breach of the tenant’s obligations “if the breach or obligation relates to the period before the assignment.”

[17] In his closing argument, the appellant argued that the landlord’s claim for arrears of rent was within the exclusive jurisdiction of the Landlord and Tenant Board and that the claim was not within the jurisdiction of the Small Claims Court. The trial judge disagreed and held that the jurisdiction of the Board was limited by s. 87(1)(b) of the Act which, at the time, provided that a landlord could apply to the Board for an order for the payment of arrears of rent “if … the tenant is in possession of the rental unit.”

[18] In his closing argument, the appellant argued that the one-year limitation period in s. 29(2) of the Act applied. The trial judge disagreed and pointed out that s. 29(2) of the Act applies only to applications made by tenants and not to applications made by landlords.

[19] In the result, the trial judge held that both the appellant and Ms. Adler were liable to the landlord for the $25,000 claimed.

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[22] The appellant argues that he was not a tenant because he neither paid rent nor occupied the premises. I disagree.

Billion v Vaillancourt, 2016 ONSC 5820 (CanLII)

[11] Although the landlord testified that the property he found in the tenant’s apartment was junk, the landlord did bring in Ronald Branton (described as “an entrepreneur, percussionist and recorded music producer”) to do an appraisal of the property. Based on the seven or eight items he looked at, Mr. Branton said the tenant’s property was worth well over $10,000.00. On the tenant’s evidence, the monetary value of his collection was over $70,000.00 and there were also many items of great sentimental value. The Member held that in these circumstances the landlord had an obligation to notify the tenant’s parents before simply throwing away the tenant’s property, particularly given his knowledge that the tenant’s parents had been trying to reach him and that he had contact information for them.

[12] It is not clear that this finding is a question of law. It seems to us that it is at best a question of mixed fact and law and that any legal principle is inextricably bound up with facts. However, even if there is an extricable question of law (which we believe there is not) and even if the standard of review is correctness (which we say it is not) we would uphold it.

[13] This decision must be viewed in light of its underlying and unique facts. In Mputu v. Wright, [2004] O.J. No. 6055 (S.C.J.) Wilson J. held at paragraph 41 that: “Landlords that fail to act reasonably in the circumstances face risk of liability.” She further held at paragraph 39 that circumstances of the case before her that, “reasonable positive steps should be taken to make arrangements for the tenants to remove their belongings.” While the Member in this case appears to have misquoted Mputu somewhat, her decision is fully consistent with the principles established in that case. A landlord must act reasonably. A landlord cannot simply ignore attempts on behalf of the tenant to contact him or turn a blind eye to what he knows is not simple abandonment of property. The landlord’s conduct in this case was egregious and easily meets any test for abuse of process. Such a finding is also supported by the case law, see Mputu v. Wright; Cruickshank v. Mobal Khan Enterprises, [2002] O.J. No. 3355 (S.C.J.); Maturell v. Dunelm Holdings [2000] O.J. No. 1880 (S.C.J.).