Lease Agreement (Residential)

See Also

• Consideration in Contracts
• Construction of a Contract (General Principles)

Residential Tenancies Act, 2006, S.O. 2006, c. 17

38 (1) If a tenancy agreement for a fixed term ends and has not been renewed or terminated, the landlord and tenant shall be deemed to have renewed it as a monthly tenancy agreement containing the same terms and conditions that are in the expired tenancy agreement and subject to any increases in rent charged in accordance with this Act. 2006, c. 17, s. 38 (1).

Arora v Wieleba, 2016 CanLII 37551 (ON SCSM)

18. In any event the execution of the second version of the lease in late August 2014 would appear to have no effect on the rights and obligations as between these two parties. The defendant was otherwise liable under the original lease and it is not apparent what exchange of consideration occurred between these parties to support the second version of the lease. Its net effect would appear to be nothing more than an agreement to change one of the four tenants other than her. The fact the plaintiff agreed to let another tenant (Ali) out of the original lease did not oblige him to release the defendant also.

TSL-92810-18 (Re), 2018 CanLII 120864 (ON LTB)

7. The lease between the parties is clearly subject to section 18 of the Act, which provides that covenants concerning things related to the rental unit run with the land, and are not therefore affected by a change in the landlord. Furthermore, the definition of “landlord” in section 2(1) includes successors in title.

8. I also find that the date for termination of the lease has already been determined by the Board in order TSL-79981-16 issued January 24, 2017. It does not matter that the Landlords have changed from that date or that this is a different notice: the same lease and the identical term of the lease concerning its termination is under consideration. The terms of an existing lease do not cease to apply merely because there has been a change in ownership.

Toronto Community Housing Corp. v. Zelsman, 2017 ONSC 5289 (CanLII)

[17] The main issues in dispute were whether there was a valid lease agreement in place and whether rent charged pursuant to that lease and subsequent rent increases were lawful.

Issues in the appeal

[27] Based on his factum and submissions, Mr. Kary identified the issues as follows: (a) whether the respondent is estopped from enforcing the rent set out in the Lease Agreement originally in the amount of $1106 per month after making representations to the appellant that she could pay a lower rent and that the appellant relied upon when moving into the unit;

(b) whether the rent was lawfully increased;

(c) whether the Board had the power to determine what rent should be paid;

(d) whether the Board erred in holding that s. 191 of the RTA deems notice of document to be validly served if delivered by mail;

(e) whether the Board abdicated its jurisdiction when it applied an overly deferential standard of review to the order dated September 24, 2015.

[43] Fifth, the Board’s determination that the Lease Agreement dated December 17, 2010 was valid is a decision of mixed fact and law which is not reviewable on appeal.

[44] I am not persuaded that the Board erred in law in failing to hold that the TCHC was estopped from seeking enforcement of the lease agreement dated December 17, 2010.

[45] The related issue is the application of s. 203. At paragraphs 4-7 of the decision referred to above, the Board held that it had no jurisdiction to make determinations concerning eligibility for rent-geared-to-income assistance. And at paragraph 8 the Board held that its jurisdiction was to determine the amount of rent owing pursuant to the valid Lease Agreement. That is a correct interpretation of s. 203. I am not persuaded that the Board erred in law in coming to those conclusions.

B. Whether the rent was lawfully increased and

D. Whether the Board erred in holding that s. 191 of the RTA deems a notice or document to be validly served if delivered by mail

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.

D. Statute of Frauds

[95] The defendants, Michael, Albert and 214 Ontario Inc., have pleaded the Statute of Frauds, wherein, for present purposes, s. 4 provides:

4. No action shall be brought . . . to charge any person upon any contract or sale of lands . . . or any interest in or concerning them, unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith . . .

[96] The Lease Agreement alleged by the plaintiffs is a contract concerning an interest in land and, accordingly, s. 4 applies. Thus, to be enforceable, it (“or some memorandum or note thereof”) must be in writing and signed by the lessors – the numbered-company defendants. Here, neither of these criteria is satisfied.

[97] However, there is an exception to this must-be-in-writing requirement.

E. The doctrine of part performance

1. defence to Statute of Frauds

[98] “[E]quity invented a doctrine under which, in appropriate circumstances, a defendant was not allowed to rely upon the technical defence of the Statute (of Frauds)”: see G.H.L. Fridman, The Law of Contract in Canada, 5th ed. (Toronto: Carswell, 2006), p. 223. This is the doctrine of part performance.

[99] “. . . the Statute of Frauds does not apply where there has been performance or part performance of the oral contract by . . . the other party . . .”: see Int. Assoc. Hairdressers v. Glasgow (1957), 1957 CanLII 325 (MB CA), 9 D.L.R. (2d) 615 at 628 (Man. C.A.).

2. an equitable doctrine

[100] The doctrine of part performance is equitable in nature and designed to prevent a party from avoiding liability under an agreement that is lacking written proof.

3. must acts refer to oral contract?

[101] Although there are cases holding that the acts of part performance must refer to the actual oral contract being alleged, others find it sufficient if the acts relied upon tend to establish the existence of any contract between the parties. I am unable to reconcile these cases and, therefore, conclude that this is an area of the law that is unsettled.

[102] In my opinion, it is unnecessary for the acts of part performance to point to the oral Lease Agreement being alleged by the plaintiffs (in respect of which there are three essential provisions: (1) a term of four years; (2) the requirement that the landlords bring the Property into good repair; and, (3) that they do so before the payment of rent is triggered). It is enough that the acts are referable to the existence of an oral agreement that it would be unfair not to enforce; and it will be for the plaintiffs to prove the agreement at trial by means of parol evidence.

[103] Certainly, it would be helpful, but not necessary, if the acts of part performance were to refer to one or more of the essential provisions of the alleged oral Lease Agreement.

[104] I should think that it would be highly unusual to view the non-payment of rent as an act of part performance. However, the affidavit of Helena Pawlowska speaks about the plaintiffs living on the Property “without monthly payments” and Albert’s “plan of fixing the [Property].” This non-payment of rent, in the circumstances, is an act of part performance that refers to the oral Lease Agreement alleged by the plaintiffs and is supported by the Pawlowska affidavit.

4. does the payment of money equal part performance?

[105] It has been held that payment of money cannot constitute part performance of a contract with respect to land. In my view, payment of money (such as rent) is a fundamental ingredient of the lease of property and, where coupled with another act of part performance, may be considered by the court where the equities make it unjust not to do so. Here, the plaintiffs paid money on account of rent and also tendered cheques. The fact that the cheques were never cashed is consistent with a stalemate between the landlords and is supportive of the position of the plaintiffs.

5. damages and part performance

[106] Although some cases have ruled that the court cannot award damages under a contract that has been proved pursuant to the doctrine of part performance,[54] I, with respect, find that view to be illogical and would not give effect to such a proposition (there being no clear binding contrary authority).

6. must part performance be pleaded?

[107] The moving party pleaded the Statute of Frauds in its statement of defence, but the plaintiffs said nothing of part performance in their reply.

[108] Although a party must plead the Statute of Frauds where it is raised as a defence to a claim based upon an oral contract, there is no obligation to plead part performance in order for it to be considered by the court. The failure to plead is not fatal as long as: (1) the other side is given notice of the allegation of part performance; (2) the evidentiary basis has been established; (3) the opportunity for full submissions is provided; and, (4) there is no prejudice to the other side.

[109] I raised with counsel the issue of part performance and requested written submissions. The supporting evidence was already included in the affidavits filed and prejudice was neither proved nor suggested.

[110] Thus, I find that the issue of part performance may be considered by the court.

7. must a fraud result?

[111] Mr. Fromstein argues that, to establish part performance, a fraud must result if 214 Ontario Inc. is allowed to take advantage of the contract not being in writing. He relies upon Starlite Variety Stores Ltd. v. Cloverlawn Investments Ltd. (1978), 1978 CanLII 2173 (ON SC), 92 D.L.R. (3d) 270 at 275 (Ont. H.C.J.), a decision cited with approval in The Neighbourhoods of Cornell Inc. v. 14401066 Ontario Inc., Samuel Lam and Peter Wong, 2003 CanLII 39477 (ON S.C.) at para. 63. I cannot agree with this argument. It does not make sense that the plaintiffs should be prevented from relying upon the doctrine of part performance merely because the conduct of the moving party was not fraudulent.[55] To accept such an argument ignores the resulting unfairness to the plaintiffs. The test for invoking the doctrine of part performance does not involve categorizing the nature of the moving party’s conduct. Instead, one looks to the effect of that conduct on the responding parties. And so the issue becomes whether it would be unfair or unjust to the plaintiffs to allow the moving party to seek refuge in the Statute of Frauds and escape liability under the oral Lease Agreement.

8. detrimental reliance

[112] “Without detrimental reliance there can be no inequity in relying on the Statute of Frauds . . .”: See Erie Sand and Gravel Limited v. Tri-B Aeres Inc., 2009 ONCA 709 (CanLII) at para. 79.

[113] I think that the requirement of detrimental reliance is satisfied by the plaintiffs relocating their business to, and remaining on, the Property in the expectation that the necessary repairs would be effected.

9. conclusion

[114] In this case, there are acts of part performance of an oral tenancy agreement: (1) the plaintiffs gave up their Kentucky farm and moved onto the Property; (2) they did work on the Property; (3) they paid, and tendered monies on account of, some rent; and, (4) they did not pay rent after the summer of 2007. All of this occurred pursuant to an oral tenancy agreement of some kind. Indeed, there is the admission by Albert that the plaintiffs occupied the Property as tenants. Consequently, it would be unfair to prevent the plaintiffs from having the opportunity, at trial, to prove the Lease Agreement that they allege. How strange it would be for the plaintiffs to be barred from doing so.[56]