Purchasers Own Use - Re: Family (N12)

Residential Tenancies Act, 2006

48 (1) A landlord may, by notice, terminate a tenancy if the landlord in good faith requires possession of the rental unit for the purpose of residential occupation for a period of at least one year by,

(a) the landlord;

(b) the landlord’s spouse;

(c) a child or parent of the landlord or the landlord’s spouse; or

(d) a person who provides or will provide care services to the landlord, the landlord’s spouse, or a child or parent of the landlord or the landlord’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located.

(2) The date for termination specified in the notice shall be at least 60 days after the notice is given and shall be the day a period of the tenancy ends or, where the tenancy is for a fixed term, the end of the term.

(3) A tenant who receives notice of termination under subsection (1) may, at any time before the date specified in the notice, terminate the tenancy, effective on a specified date earlier than the date set out in the landlord’s notice.

(4) The date for termination specified in the tenant’s notice shall be at least 10 days after the date the tenant’s notice is given.

(5) This section does not authorize a landlord to give a notice of termination of a tenancy with respect to a rental unit unless,

(a) the rental unit is owned in whole or in part by an individual; and

(b) the landlord is an individual.

48.1 A landlord shall compensate a tenant in an amount equal to one month’s rent or offer the tenant another rental unit acceptable to the tenant if the landlord gives the tenant a notice of termination of the tenancy under section 48.

49 (1) A landlord of a residential complex that contains no more than three residential units who has entered into an agreement of purchase and sale of the residential complex may, on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession of the residential complex or the unit for the purpose of residential occupation by,

(a) the purchaser;

(b) the purchaser’s spouse;

(c) a child or parent of the purchaser or the purchaser’s spouse; or

(d) a person who provides or will provide care services to the purchaser, the purchaser’s spouse, or a child or parent of the purchaser or the purchaser’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located.

(3) The date for termination specified in a notice given under subsection (1) or (2) shall be at least 60 days after the notice is given and shall be the day a period of the tenancy ends or, where the tenancy is for a fixed term, the end of the term.

(4) A tenant who receives notice of termination under subsection (1) or (2) may, at any time before the date specified in the notice, terminate the tenancy, effective on a specified date earlier than the date set out in the landlord’s notice.

(5) The date for termination specified in the tenant’s notice shall be at least 10 days after the date the tenant’s notice is given.

56 Where a rental unit becomes separately conveyable property due to a consent under section 53 of the Planning Act or a plan of subdivision under section 51 of that Act, a landlord may not give a notice under section 48 or 49 to a person who was a tenant of the rental unit at the time of the consent or approval.

TSL-62768-15-RV2 (Re), 2015 CanLII 100191 (ON LTB)

10. It is my belief that the Legislature intended to use the term “residential occupation” in section 48 of the Act to apply to those situations where the rental unit will either be lived in by the landlord or becomes incorporated into the landlord’s main living quarters. If a landlord is living in a house in which the basement of the complex is rented out, I am satisfied they are entitled to effectively reclaim use of the entire house by seeking possession of the rental unit for residential storage. It is not uncommon in many single family homes to have the basement used in whole or in part for storage of property owned by its occupants. Where the intended purpose of the rental unit is to become incorporated into the landlord’s main living quarters there is no change of use, it is residential occupation. “Residential occupation” cannot reasonably be restricted in these circumstances to only include that portion of a house used for activities such as sleeping, cooking or entertaining. To suggest otherwise would mean that a landlord would have to effectively abandon the remainder of the house and live solely in the basement in order to establish an intention to use a basement for residential occupation.

TST-94128-18 (Re), 2018 CanLII 123282 (ON LTB)

17. The law is clear that “residential occupation” as it is used in s.48(1) of the Act (under which the Landlords served the N12) does not include temporary full-time use.

18. The Ontario Divisional Court in the case of MacDonald v. Richard (2008) O.J. 6076 (Ont. Div. Ct.) (“MacDonald”), ruled that temporary full-time occupancy of a residential unit (which in MacDonald was four months) does not constitute “residential occupation” as contemplated in s.48(1) of the Act. MacDonald has been followed by the Board in a number of decisions, including TSL-2128-11; TSL-52712-14; TSL-62689-15; TSL-76374-16; and TSL-80318-16.

TSL-80642-16 (Re), 2017 CanLII 28814 (ON LTB)

15. I agree with the Tenant that vacancy does not change the status of a residential unit. If the Landlord had used the vacant units for a purpose that was not residential (storage of the Landlord’s property, for example), the status of the units may have changed. However, choosing to keep units unoccupied does not, in itself, convert the units from residential to otherwise. Residential units may remain residential whether they are occupied or not. Thus, there continue to be four residential units in the residential complex.

16. This interpretation is also consistent with the objective of the Act. In Matthews v. Algoma Timberlakes Corp., [2010] O.J. No. 2710 (C.A.) (‘Matthews v. Algoma’), the Court of Appeal states, at paragraph 22: “Given the remedial nature of the [Residential Tenancies] Act, its provisions must be interpreted liberally to ensure the realization of its objectives.” At paragraph 32, the Court concludes: “The purpose of the legislation is to provide protections to tenants.”

CEL-61051-16-RV (Re), 2016 CanLII 100338 (ON LTB)

1. The basic facts of this case are undisputed. The Landlord entered into an agreement with his employee and was supposed to transfer a half interest in the property to his employee. This change or addition to title of a second owner was supposed to be completed on November 1, 2016.

2. The application was filed on September 15, 2016 prior to the planned change in title.

3. At the review hearing, it was confirmed that the sale of a half interest in the property or addition to title did not occur. The employee does not want to buy a portion of the property unless he is sure he can move into it. The Landlord's Legal Representative stated the planned sale of a half interest in the property is on hold until the review request is resolved.

13. The Member’s determination in paragraph 16 of the order that section 49 of the Act was intended to apply to a situation where the property was fully sold and the Landlord would no longer be the owner of the property is a reasonable interpretation of section 49. Since the property has not been sold, the requirements of section 49 have not been met.

18. Even if the review were granted and I interpreted section 49 in a different manner than the hearing Member, relief from eviction under section 83 of the Act would be granted in the current circumstances of this case. The potential addition of a second owner to title is tentative and uncertain at this point in time.

It is ordered that:

1. The Landlord’s review request is denied.

NOL-01991-10 (Re), 2010 CanLII 48821 (ON LTB)

2. On the date that the Notice To Terminate a Tenancy at the End of the Term For Landlord's or Purchaser's Own Use Form N12 was served to the Tenant, the applicant Landlord had already purchased the residential complex and was already the ‘Landlord’.

3. The Landlord had not entered into and agreement of purchase and sale at the time notice of termination (for use by the purchaser’s spouse) was served to the Tenant.

4. The Landlord’s notice of termination is defective.

TSL-08570-10 (Re), 2010 CanLII 76079 (ON LTB)

4. In Wiazek v. Arnstrong [1994] O.J. No. 2737 (Gen. Div) involved a case where the Landlord wanted the house to store his personal possessions but planned to continue to live in his girlfriend’s house and would therefore only be at his own house part of the time. The court dismissed the landlord’s own use application as the landlord would not be residing on a full time basis.

MacDonald v. Richard 2008 CarswellOnt 638

1 For purposes of this decision we will accept, without specifically deciding, that the standard of correctness will apply, as that is the standard more advantageous to the appellant. We are of the view that the Review Decision by Member Ellacott on June 19, 2007 that "temporary full-time occupancy for four months does not constitute the purpose of residential occupation as contemplated by the Residential Tenancies Act, 2006" is correct. That conclusion is supported by case law directly on point that has held that a landlord is not entitled to evict an existing tenant in order to provide accommodation for his daughter on summer break from university: Wiazek v. Armstrong, (1994) O.J. No. 2737 (Ont. Gen. Div.) . See also, McDonald v Smith, (1993) O.J. No. 1680 (Ont. Gen. Div.) . It is also an interpretation that is consistent with the intention of the legislation, which is remedial in nature and directed towards the protection of tenants, including protecting the security of tenure for tenants. Accordingly, this appeal is dismissed. Costs fixed at $ 1000.00 payable by the appellant.

TEL-92093-18 (Re), 2018 CanLII 113210 (ON LTB)

4. AS says that her son in good faith requires possession of the rental unit for the purpose of residential occupation.

5. On any application before the Board the person who makes an allegation has the burden of leading sufficient evidence to establish that it is more likely than not that their version of events is true. In this case that burden falls on the Landlords. For the reasons that follow, I find that the AS has led insufficient evidence to establish that her son genuinely requires possession of the rental unit for the purpose of residential occupation.

18. Based on the evidence before me, I am satisfied that the Landlord increased the rent from $1,300.00 to $1,600.00 in September 2017. The Landlord failed to provide any documentary evidence to support her testimony and failed to effectively challenge the Tenant’s testimony under cross-examination. The Tenant provided the Board with several pieces of documentary evidence to support his testimony and he presented his testimony in a detailed and consistent manner. I find the Tenant’s testimony to be credible.

19. It is important to note that, by increasing the rent from $1,300.00 to $1,600.00, the Landlord violated several sections of the Act including section 110, subsection 111(1), subsection 116(1) and subsection 120(1).

28. Based on the evidence before me, I am satisfied on the balance of probabilities that the Landlord served the notice of termination in retaliation for the Tenant exercising his legal right not to pay an illegal rent increase.

29. Subsection 83(3)(c) of the Residential Tenancies Act, 2006 (the 'Act') says “without restricting the generality of subsection (1), the Board shall refuse to grant the application where satisfied that …”the reason for the application being brought is that the tenant has attempted to secure or enforce his or her legal rights”. [Emphases added]

Personal Use Applications

HOL-02388-18 (Re), 2018 CanLII 111837 (ON LTB)

13. The obligation of the Board in considering applications for Landlord’s own use is to consider the circumstances of each case in relation to the criteria laid out by the leading cases of the Divisional Court:

Beljinac v. Salter 2001 CanLII 40231 (ON SCDC), (2001) O.J. No. 2792 (Div. Ct.), (“Salter”) when referring to Justice Steele’s reasons in Feeney v. Noble (1994), 19, O.R. (3d) (Div. Ct.), stated that:

“…the test of good faith is a genuine intention to occupy the premises and not the reasonableness of the landlord’s proposal.” And in the more recent decision of Fava v. Harrison, 2014 ONSC 3352 (CanLII) the Divisional Court, in considering this issue in the context of the Act found as follows:

“We accept, as reflected in Salter, supra, that the motives of the landlord in seeking possession of the property are largely irrelevant and that the only issue is whether the landlord has a genuine intent to reside in the property. However, that does not mean that the Board cannot consider the conduct and the motives of the landlord in order to draw inferences as to whether the landlord desires, in good faith, to occupy the property.”

Macko v. Wasik 2003 CarswellOnt 5648, (2003) O.R.H.T.D. No. 140, 22 R.P.R. (4th) 225

1. Edward E. Macko, a tenant of 19 years at the above address, received a notice of termination of tenancy from his landlord Mary Wasik. The notice indicated that the landlord had entered into an agreement of purchase and sale and that the purchaser, Paul P. Soultanis, was going to move into the above address. Paul P. Soultanis did not move into the above address.

9. The question that remains is whether Landlord Mary Wasik can be held liable for the dishonesty of purchaser Paul P. Soutanis.

20. Each party to the real estate transaction got something. The landlord/ vendor received money, or the promise of money. The purchaser got the property. The tenant, who was not a party to the real estate transaction, received a notice of termination.

21. The Tenant Protection Act protects the tenant in this scenario. It is up to the landlord / vendor to protect herself when the purchaser enlists the landlord / vendor for service of the notice of termination. Perhaps some sort of warranty that survives closing should be obtained from the purchaser to the effect that the purchaser shall save harmless the vendor from the consequences of applications such as this. There may be other approaches. The real estate bar will figure something out.

22. The salient fact is that the tribunal will hold the landlord / vendor liable for the bad faith of the purchaser in these circumstances.

EAT-60372-16 (Re), 2016 CanLII 88188 (ON LTB)

4. "Bad Faith” may be defined as “… the opposite of ‘good faith,’ generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfil some duty or some contractual obligation, not prompted by honest mistake as to one’s rights or duties, but by some interested or sinister motive.” Term ‘bad faith’ is not simply bad judgment or negligence, but rather implies the conscious doing of a wrong because of dishonest purpose or moral obliquity ….”: See Black’s Law Dictionary, 6th Ed. St. Paul: West Publishing (1990), p. 139.

13. On any application before the Board, the burden rests on the applicant to prove their case on the balance of probabilities. In this case, the Tenants must prove on a balance of probabilities that they were given the notice of termination in bad faith, and moved out because of the notice of termination and the Landlord did not move into the unit within a reasonable time after the Tenants moved out.

EAT-69684-17 (Re), 2018 CanLII 86139 (ON LTB)

26. The evidence before me suggests on a balance of probabilities that what the Landlords really wanted to do was to raise the rent and to raise it unlawfully, and that they served the N12 as a means of obtaining more income from the rental unit when the Tenant refused to accept the Landlords’ demand for an illegal rent increase.

27. I do not accept Landlord S.T.’s evidence that he only wanted to meet with the Tenant to understand her intentions going forward and that he never discussed the rent. His testimony is inconsistent with his January 16, 2017 email to the Tenant which states the following:

“We sincerely appreciate your loyalty as one of our most valued residents and as a token of our appreciation, we are pleased to provide you with the lease renewal options and incentives. I appreciate your patronage and would like to speak with you about a new term and a new lease.”

28. I also do not accept the Landlord S.T.’s evidence that the Tenant’s email dated January 25, 2017 was an attempt to entrap him in the future. If the email was not an accurate reflection of Landlord S.T.’s intention regarding the rent, it would be reasonable to assume that he would have clarified the issue, particularly for an individual he described as a valued resident. Instead, he responded on January 26, 2017 with, “I will send you my answer with regard to the unit soon.” The following day the Landlords served the Tenant with a N12 notice.

29. For these reasons, I am satisfied that the notice was given in bad faith.

Kohen v. Warner, 2018 ONSC 3865 (CanLII)

[11] In our view, it is clear from the Member’s reasons, read as a whole, that the Member did not misstate the law in MacDonald nor did he decide the outcome of this case solely on the basis of MacDonald. The Member correctly stated s. 48(1) of the Act and the test in that section that applied. The Member further referred to the cases cited in MacDonald, and to other Board cases, in which occasional occupation of a unit by a landlord’s family was held not to be sufficient to displace a tenant. The Member then applied the principles from those cases to the facts before him to conclude that the proposed intermittent use of the unit by Sedat did not entitle the Landlord to terminate the existing tenancy pursuant to s. 48(1) of the Act.

Compensation v. Betterment in Awarding Damages

TET-63210-15 (Re), 2015 CanLII 94892 (ON LTB)

22. Rent differential should reflect the additional rent that the Tenants have to pay but it should not require the Landlords to pay for any betterment in housing. One could argue that here there was no betterment because the Tenants no longer have a single family home where their family can all live together. On the other hand, the Tenants and their family now have two kitchens which is one more than they had before. Given all of the circumstances here it seems to me that a fair rent differential amount would take into account this additional kitchen, apportion a value to that kitchen and deduct it from the differential awarded.

CEL-61051-16-RV (Re), 2016 CanLII 100338 (ON LTB)

7. Both the Landlord's Legal Representative and the Tenant's Legal Representative agreed that they were not aware of any prior or precedent cases where section 49 of the Act was relied upon to terminate a tenancy where there was not a sale of the full property but only the addition of a second owner to the title.

8. At the review hearing it was confirmed that the purchase price for the half interest in the property would be secured by a promissory note. The employee would not be required to pay the Landlord any amount at the time of the “sale”. This reinforces the unique circumstances of this “sale”.

13. The Member’s determination in paragraph 16 of the order that section 49 of the Act was intended to apply to a situation where the property was fully sold and the Landlord would no longer be the owner of the property is a reasonable interpretation of section 49. Since the property has not been sold, the requirements of section 49 have not been met.

14. Reasonable determinations and interpretations of the Act are not interfered with on review.

17. The Landlord and the employee seem to want a guarantee that the employee will be permitted to move into the rental unit before they go ahead with the “sale”. There is no guarantee. Even an actual owner may not get the eviction order they are hoping for since it is mandatory for the Board to consider relief from eviction under section 83 of the Act.

18. Even if the review were granted and I interpreted section 49 in a different manner than the hearing Member, relief from eviction under section 83 of the Act would be granted in the current circumstances of this case. The potential addition of a second owner to title is tentative and uncertain at this point in time.

TEL-68199-16-RV-IN2 (Re), 2016 CanLII 52857 (ON LTB)

2. With respect to the first ground for the review set out above, it would appear that the evidence before the Member was that the purchaser and his large extended family intends to occupy the entire residential complex which is a single family home with a separate basement apartment. The current upstairs occupant and the Tenants share laundry facilities so there are interior connections between the upper part of the residential complex and the lower.

3. The Landlord argues that although the purchaser’s affidavit refers to his grandparents wanting to move into the rental unit that is not actually what is being proposed. The purchaser intends to occupy all of the residential complex and in essence return it to a single family home. It is fair to say the affidavit can be interpreted in that manner.

8. Further, this conclusion is actually a misstatement of the evidentiary question the Member had to explore and answer. This application is not a bad faith application by the Tenants under section 57 of the Act; it is an application by the Landlord under section 69 based on notice of termination served under s. 49(1). That provision says in part:

A landlord of a residential complex that contains no more than three residential units who has entered into an agreement of purchase and sale of the residential complex may, on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession of the residential complex or the unit…

9. This section requires the Board to make findings that:

• The residential complex has three or fewer residential units in it;
• The landlord and a purchaser have entered into a purchase and sale agreement for the residential complex; and
• The purchaser genuinely intends to move into the rental unit.

13. I say this because the Member was required to make a finding that the Landlord and the purchaser had entered into a genuine purchase and sale agreement. The Tenant’s witness is a real estate agent and he testified as to irregularities around the purported sale. The Tenants were attempting to argue that the Landlord was so motivated to get rid of them as demonstrated by the history of failed eviction attempts that she would go so far as to invent a purchaser and a phony purchase and sale agreement. Although the Member was correct in that each application must stand on its own the Tenants were entitled to attack the Landlord’s credibility concerning the genuineness of the purchase and sale agreement; demonstrating the Landlord may have motive to invent the purchase and sale agreement was a strategy that should have been open to them. Refusing to let them do so was a denial of procedural fairness and a serious error.

CEL-66528-17 (Re), 2017 CanLII 60097 (ON LTB)

12. The parties have a month-to-month tenancy which commenced on July 1, 2007. The parties agree than on April 20, 2017 the Landlord served the Tenant with an N12 Notice of Termination for purchaser’s own use with a termination date of June 30, 2017. As noted above, the rental period runs from the 18th to the 17th of the month. Therefore, I find that this notice does not comply with the notice requirements contained in section 49(3) of the Residential Tenancies Act, 2016 because the specified termination date is not the day a period of the tenancy ends.

13. Further, o agreement of purchase and sale or affidavit of the purchaser was submitted in evidence.

14. Without the agreement of purchase and sale, there is no evidence that the Landlord in fact has entered into a sale as required by section 49(1) of the Act.

15. With respect to the absence of an affidavit, section 72(1) of the Act states that:

The Board shall not make an order terminating a tenancy and evicting the tenant in an application under section 69 based on a notice of termination under section 48 or 49 unless the landlord has filed with the Board an affidavit sworn by the person who personally requires the rental unit certifying that the person in good faith requires the rental unit for his or her own personal.

16. I find that Section 72 (1) of the Act has not been satisfied and the application must be dismissed.

NOT-01191 (Re), 2009 CanLII 77998 (ON LTB)

6. Sub-section 49(1) of The Residential Tenancies Act 2006 states: “A landlord of a residential complex that contains no more than three residential units who has entered into an agreement of purchase and sale of the residential complex may, on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession of the residential complex or the unit for the purpose of residential occupation by (a) the purchaser”

7. I find that on May 26, 2009 the Landlords had not entered into a confirmed agreement of purchase and sale with respect to the Tenants’ rental unit. The Landlords were not entitled to serve the Tenants with a notice of termination simply because they anticipated a possible sale.

8. I find that the Landlord’s improper notice of termination substantially interfered with the Tenants’ reasonable enjoyment of the rental unit or residential complex for the 43 day period between May 26, 2009 (the date improper notice was served) and July 8, 2009 (the date the Landlords’ improper notice was rescinded).

9. I determine that the Tenants are entitled to a 30% lump sum rent rebate of $254.46. This amount represents 30% of the lawful rent for the 43 day period noted under paragraph 9.

TSL-80642-16 (Re), 2017 CanLII 28814 (ON LTB)

1. At the hearing the Tenant raised a preliminary issue. The Tenant submitted that the residential complex contains four residential units and, as a result, the Landlord was not entitled to serve an N12 Notice of Termination (‘N12 notice’) because s.49(1) of the Residential Tenancies Act, 2006 (the ‘Act’) provides that a Landlord may only serve an N12 for purchaser’s use if the residential complex contains three or fewer residential units.

3. It is uncontested that the residential complex is a house, and that the basement of the house is a residential unit, currently occupied by a tenant. The Tenant lives in a unit on the second floor of the house. It is uncontested that at the time that the N12 notice was served on the Tenant, the only tenants in the house were the Tenant and the basement tenant.

5. The Landlord had leased the main and second floor of the house to an organization (the ‘organization’), who in turn rented rooms on the main and second floor of the house to its clients. At the hearing the Landlord submitted a copy of its lease with the organization, which makes it clear that the intent of the organization is to rent out several units to its clients.

6. It is uncontested that the organization rented the main and second floors of the house as three residential units. The Tenant was a client of the organization and the Tenant’s original tenancy agreement was with the organization.

7. On February 26, 2016, the City of Toronto (the ‘City’) issued to the Landlord an Order to Comply, which required that the Landlord either bring the house into compliance with the legal requirements of a multi-unit dwelling or convert the house into a single-family dwelling.

8. At the time that the Landlord received the Order to Comply, the lease between the Landlord and the organization was in force.

15. I agree with the Tenant that vacancy does not change the status of a residential unit. If the Landlord had used the vacant units for a purpose that was not residential (storage of the Landlord’s property, for example), the status of the units may have changed. However, choosing to keep units unoccupied does not, in itself, convert the units from residential to otherwise. Residential units may remain residential whether they are occupied or not. Thus, there continue to be four residential units in the residential complex.

17. In section 2 of the Act, “residential unit” is defined as “any living accommodation used or intended for use as a residential premises” and includes a room in a boarding house.

20. Section 55 creates a two year period after a severance before that severance takes legal effect for the purposes of determining whether a residential complex contains the requisite number of residential units to mandate certain rights for tenants associated with a termination for conversion to non-residential use. In the circumstances of this case, the Tenant should be granted a similar degree of protection as that provided to tenants by s.55 of the Act. Applying the logic of s.55 of the Act and the reasoning in Matthews v. Algoma, I find that because the Landlord formed the intention to convert the two vacant units in the residential complex to non-residential use less than two years prior to serving the N12 notice, these units are still to be treated as residential units as of the date the N12 notice was served.

21. Accordingly, the Landlord’s application must be dismissed because an N12 notice for purchaser’s own use can only be served if the residential complex contains three or fewer residential units.

See Also: Defining a Rental Unit

TET-14624-11 (Re), 2011 CanLII 101409 (ON LTB)

1. The Tenants moved out of the rental unit because the Landlord gave the Tenants a notice of termination (‘Form N12’) indicating that a purchaser of the residential complex required possession of the rental unit for their own residential occupation.

2. The agreement of purchase and sale relied on by the Landlord to give the Tenants a notice of termination under section 49 of the Residential Tenancies Act 2006, (the ‘Act’) is not an agreement of purchase and sale but rather a lease with an option to purchase.

3. The Landlord knew or ought to have reasonably known that the agreement with the potential purchaser was not an agreement of purchase and sale. Therefore, the Landlord’s notice of termination was given to the Tenants in bad faith.

II. Evidence:

The residential complex is a two story single family home located in Durham Region.

The Landlord and the Tenants concluded a fixed term tenancy agreement commencing April 1, 2009 and ending on March 31, 2011. A copy of the tenancy agreement was submitted at the hearing and marked as exhibit # 8. The agreed upon rent was $1,350.00 per month.

Landlord’s evidence:

The Landlord testified that he has acted in good faith and that he legitimately wished to sell the residential complex. After listing the property for sale on the Kijiji classifieds website, he was contacted by the purchasers. An Agreement of Purchase and Sale was eventually concluded on February 20, 2011.

The Landlord explained that the transaction was structured in this fashion because the purchaser was having difficulty qualifying for conventional bank financing. The offer made by the purchaser was the best one available to the Landlord and was therefore accepted by him.

The Agreement by the parties was prepared with the assistance of the Landlord’s lawyer. The Agreement provides for a sale price of $240,000.00 and an extended closing date of March 1, 2013. The purchaser was required to provide the Landlord with a $12,000.00 purchase deposit before occupying the residential complex. According to the Landlord, the purchaser paid $1,000.00 on March 1, 2011. The Tenant was permitted to start moving some of his belongings a few days prior to the “official” move in date of May 1, 2011. The Tenant then paid a further $8,300.00 to the Landlord on May 1, 2011 and $500.00 on May 4, 2011 towards the deposit for a total deposit payment of $9,800.00. The Landlord acknowledged that the amount paid by the purchase as a “deposit” was short of the $12,000.00 required under the terms of the Agreement. The Landlord further advised that the Tenant is currently required to pay $1,400.00 per month “to keep me going” until the transaction closes.

III. Analysis:

In my view, an option to purchase only becomes an agreement to purchase once the option is exercised. In this regard, the Tenants referred me to a decision of the Ontario District Court, 1803 Renaissance v. Asselstine (February 9, 1989 File # M-175618/89) where the Court considered the distinction between an agreement of purchase and sale and a lease with an option to purchase. His Honour Judge Conant noted that: “The distinction between an option to purchase and an Agreement of Purchase and Sale is that the latter creates a mutual obligations on one party to sell and the other to purchase; whereas, an option merely gives the right to purchase within a limited time without imposing an obligation to purchase. The option is a right acquired by the contract to accept or reject the present offer within a reasonable time in the future, and creates only an equitable, not possessory interest.”

The Landlord insists that the Agreement signed with the purchaser is a binding purchase contract and the Landlord has met all other requirements for giving a notice under section 49 of the Act including the minimum 60 day notice effective on the date a period of the tenancy ends.

IV. Conclusion

The label given to the Agreement signed between the Landlord and the “Purchasers” does not determine its character. In this case, the Landlord has entered into a tenancy agreement with an option to purchase. The Landlord has effectively replaced the Tenants with another set of tenants at great inconvenience to the former.

NOL-07603-12 (Re), 2012 CanLII 30318 (ON LTB)

1. Sub-section 49(1) of The Residential Tenancies Act 2006 states: “A landlord of a residential complex that contains no more than three residential units who has entered into an agreement of purchase and sale of the residential complex may, on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession of the residential complex or the unit for the purpose of residential occupation by (a) the purchaser.”

2. On January 29, 2012, the Tenant was served with a Notice To Terminate a Tenancy at the End of the Term For Landlord's or Purchaser's Own Use Form N12. The notice of termination was authored and served to the Tenant by DY. The notice named DY as ‘Landlord’.

3. DY purchased the residential complex from the ‘Vendor’ landlord. The property transfer was completed on February 1, 2012. DY had no status as a ‘Landlord’ on January 29, 2012 and she was not entitled to serve any notices of termination to the Tenant prior to February 1, 2012.

4. The Application to Terminate a Tenancy and evict a Tenant Form L2 is dismissed because the application is based upon an invalid notice of termination.

TSL-76546-16 (Re), 2016 CanLII 71338 (ON LTB)

1. The property at issue has one commercial unit and three residential units. The rental unit is located on the ground floor, at the back of the building. It is a one-bedroom unit.

4. Subsection 49(1) of Residential Tenancies Act, 2006 (the 'Act') requires the Landlords to establish two points to support this application for termination of the tenancy. First, the Landlords must establish that they have entered into an agreement of purchase and sale for the property. Second, the Landlords must establish that the purchaser in good faith requires possession of the property for residential occupation by the purchaser.

17. Salter v. Beljinac, 2001 CanLII 40231 (ON SCDC), (2001) O.J. No. 2792 is the leading case involving a landlord’s own use application under section 48 of the Act. I find that the principle that was established in Salter can be applied to a purchaser’s own use application under section 49 of the Act. According to that case, the test of good faith is the purchaser’s genuine intention to occupy the premises and not the purchaser’s motives that influence that intention.

19. For the following four reasons, I find that the purchases do not in good faith require possession of the property for residential occupation.

20. First, when asked, IJ testified that he had not yet decided which unit he was going to occupy. Section 49 of the Act states that the landlord can serve a tenant with a notice of termination on behalf of a purchaser if “the purchaser in good faith requires possession of the residential complex or the unit”. Therefore, section 49 requires the purchaser to genuinely intend to occupy the entire residential complex (which includes the rental unit) or the rental unit alone. The fact that IJ could not conclusively say that he intends to occupy the rental unit means that one of the fundamental requirements of section 49 is not satisfied. IJ’s testimony also runs counters to the statement in his affidavit that he intends to occupy the property and the unit for his personal use.

21. Second, the Landlord has filed two applications with the Board seeking eviction of the tenants in two of the three residential units in the property. The Tenants testified that they spoke to the tenants in the third residential unit, the largest unit in the building with 3 or 4 bedrooms, and they said that the Landlords have not served them with an N12 Notice of Termination and they are not leaving. The Tenants testified that these main floor tenants are family friends of the Landlords. The Landlords were not present at the hearing. IJ testified that SB is a foreign investor and he lives in Barbados. Still, the Landlords did not submit any evidence of any kind to show that steps have been taken to obtain vacancy from the tenants in the third residential unit. Without this evidence, I find it reasonable to draw an adverse inference that the tenants in this unit have not been evicted. This also leads me to believe that IJ and his family intend to occupy the entire residential property.

22. Third, IJ did not testify about any work he intends to do to the property to convert it to a single-family home or to merge any of the units. Therefore, even if his mother was to occupy a separate unit from him and his wife, one unit would remain empty and there was no evidence before me of what the purchasers intend to do with this unit.

23. Fourth, the Tenants provided the following evidence, which was not disputed by the Landlords or IJ:

• The Landlords have served them with several N12 Notices of Termination over the past 5 years, all of which have been unsuccessful following hearings at the Board; and

• In November, 2015, one month before the agreement of purchase and sale was signed, the Landlords attempted to raise the monthly rent by $100.00, more than the legal guideline provided in the Act. After the Tenants refused, the Landlords raised the rent by a legal amount prescribed by the Act.

24. The Tenants’ evidence, when taken together with the three points I list above, suggest that the purchasers might have alternative reasons for evicting the Tenants unrelated to an intention to personally occupy the rental unit. My consideration of all the circumstances surrounding this tenancy is consistent with the decision in Fava v. Harrison, 2014 ONSC 3352, in which the Divisional Court stated that despite the decision in Salter (referenced above), the Board can “consider the conduct and motives of the landlord in order to draw inferences as to whether the landlord desires, in good faith, to occupy the property”. Although Fava was also decision in the context of a landlord’s own use application under section 48 of the Act, I find that the principle cited above can equally be applied to a purchaser’s own use application under section 49 of the Act.

25. Based on the reasons above, I am not satisfied on a balance of probabilities, that the purchaser in good faith require the residential complex or rental unit for the purpose of residential occupation.

Defects in the N12

SWL-12891-18 (Re), 2018 CanLII 88666 (ON LTB)

4. Section 48 of the Residential Tenancies Act, 2006 (‘the Act’) sets out that a Landlord may terminate a tenancy if the Landlord in good faith requires possession of the rental unit for the purposes of residential occupation by the Landlord. The section goes on to specify that the termination date on the Notice to Terminate at End of the Term for Landlord’s or Purchaser’s Own Use (Form N12) must be at least 60 days after the notice is given and must be the day a period of the tenancy ends.

5. The Landlord testified that the tenancy is month to month, and rent is due on the first of every month. This means the period of the tenancy is monthly, and the period of the tenancy begins on the first day of the month and ends on the last day of the month. Therefore, to be in compliance with section 48 of the Act, the termination date on the Landlord’s N12 notice must be the last day of the month. In this case, as the termination date of the notice was not the last day of the month, the notice is in contravention of section 48 of the Act.

9. Section 48.1 of the Act states that a landlord must compensate a tenant in an amount equal to one month’s rent or offer the tenant another rental unit acceptable to the tenant if the landlord gives the tenant an N12 notice of termination of the tenancy under section 48.

10. Section 73.1 of the Act sets out that if a landlord compensates a tenant under section 48.1 after serving a notice of termination under section 48, and the Board refuses to grant the landlord’s application for an order terminating the tenancy and evicting the tenant based on the notice, the Board may order that the tenant pay back the compensation to the landlord.

11. In this case, I am satisfied that the Landlord compensated the Tenant as per section 48.1.

12. If the facts before me were that the Tenant was still in possession of the rental unit and the application was being dismissed because of invalidity of the N12 Notice, I would order the Tenant to refund the compensation to the Landlord. However, in this case, I am satisfied that the Tenant vacated on February 4, 2018, as a direct result of being served with the N12 notice. This is established by the fact that she contacted the Landlord on January 23, 2018 to advise that she could not move out by February 1 as demanded by the N12, but managed to secure new accommodations and vacated within the first week of February 2018. In my view, the intent of section 48.1 is to require a landlord to pay the tenant compensation equal to one month’s rent where the landlord obtains vacant possession of the rental unit for the purpose of residential occupation. That is exactly what happened in this case, and the Tenant is entitled to keep the compensation she was given by the Landlord.

13. I do not agree that just because the Tenant did not vacate by the termination date in the N12 (flawed as it may be), it follows that the Landlord is entitled to a refund of the compensation paid to the Tenant. There is nothing in the Act to support such an interpretation. In fact, the Tenant was entitled to stay in the rental unit past the termination date on the N12 notice and await a hearing of the Landlord’s application. The N12 notice itself indicates that the tenant may choose not to voluntarily move out of the rental unit by the termination date and can instead require the landlord to file an application at the Board and prove the merits of their claim at a Board hearing. Tenants who exercise this right do not lose their entitlement to compensation pursuant to section 48.1 of the Act.

Planning Act, R.S.O. 1990, c. P.13

52 (1) No person shall subdivide and offer for sale, agree to sell or sell land by a description in accordance with an unregistered plan of subdivision, but this subsection does not prohibit any person from offering for sale or agreeing to sell land by a description in accordance with a plan of subdivision in respect of which draft approval has been given under section 51.

Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34

1 (1) In this Act,

“conveyance” includes an assignment, appointment, lease, settlement, and other assurance, made by deed, on a sale, mortgage, demise, or settlement of any property or on any other dealing with or for any property, and “convey” has a meaning corresponding with that of conveyance; (“acte translatif de propriété”, “transport”, “transporter”)

“property” includes real and personal property, a debt, a thing in action, and any other right or interest; (“bien”)

See Also: Defining a Rental Unit