Mitigating Losses - Rent (LTB)

Boardwalk General Partnership v Fraser, 2013 CanLII 95665 (ON SCSM)

1. This is a damage assessment sought by Boardwalk General Partnership, the owner of an apartment building at 812 King St. W., Kitchener against Paul Fraser, a tenant in Apartment 408 in that building beginning in December, 2008.

2. According to the Affidavit of Service filed Mr. Fraser was served personally on July 4, 2012. He was noted in default on August 13, 2012.

13. I was not referred to, but have considered Yonge Pleasant Holdings Ltd. v. Dragonov (1995), 1995 CarswellOnt 2946 (O.C.G.D.). Mr. Justice Gibson in that case distinguished Lees and held that where the landlord gives notice to terminate a month to month tenancy the landlord cannot claim damages for loss of rent after the date of termination.

18. Section 15 of the Residential Tenancies Act, supra, on the other hand, abolishes acceleration clauses altogether. The right of a landlord to both terminate the tenancy for fundamental breach by the tenant and claim loss of future rent otherwise due under the contract is, in effect, an acceleration of the rent due over the life of the contract, since the landlord may give notice and bring the claim before the period of the tenancy has expired. Accelerated rent clauses are void under the new Act. This alone is a reason to find against the plaintiff on this issue.

21. Moreover, since the Residential Tenancies Act alters the common law with respect to termination for non-payment of rent, abolishes acceleration clauses, requires notice in Form N4 and provides options to the tenant which do not exist at common law, it is my view that the Act has overridden the common law and eliminated the landlord’s option to terminate the lease and claim damages for loss of future rent.

26. In summary, I find that the authorities following Lees are distinguishable having been decided under a former statute which had a less complete code of landlord remedies and damages than the Residential Tenancies Act applicable to this case. I find that the Residential Tenancies Act does comprise a complete, exhaustive code of landlord remedies in the event of early termination, and that those remedies do not include damages for loss of future rent when the tenancy has been terminated by the landlord. I also find that, the tenancy having been terminated not by the landlord’s notice but by the order of the board, there is no room for an election of remedies by the landlord as contemplated in Highway Properties, supra, and that the remedy held in that case to be available in commercial lease cases is not available in residential tenancy cases under the Residential Tenancies Act. I further find that if the commercial lease remedy recognized in Highway Properties does apply to residential tenancies in Ontario, the notice required under the principles in that case must be given at the time of notice of termination by the landlord, and that was not done here.

27. I therefore do not allow any damages to the plaintiff for loss of rent between the date of vacation of the premises by the tenant and the date of possession by the new tenant.