Monday, 3 December 2012

Evicting a tenant to move in your mother: Corporate Landlord

As many people know, the residential landlord and tenant relationship in Ontario bears a hallmark of security of tenure.  Meaning, once a tenant is in possession of a rental unit it is very difficult for a landlord to regain possession of that unit from the tenant.   Fixed term leases automatically renew on a month to month basis and landlords may only terminate a lease for cause or not for cause grounds as set out in the Residential Tenancies Act.  Simply wanting a rental unit back from a tenant is not a valid nor legal reason to regain possession.

Certainly, terminating a tenancy and evicting a tenant on the basis of cause such as non-payment of rent, impaired safety, illegal act, substantial interference with reasonable enjoyment, is fairly intuitive.  What, however, about the tenancy of a tenant who meets all of the conditions of a lease, always pays the rent, disturbs no one?  For the most part, the tenancy of such a tenant is unassailable subject only to the narrow grounds set out in the Residential Tenancies Act.

One of those narrow grounds is the subject of this article today.  That is, the right of a landlord to seek to terminate the tenancy of a tenant on the basis of landlord's own use.  The twist to this topic today, and what is relatively new, is that a corporate landlord may terminate a tenancy of a tenant for the use of the mother of the single shareholder of the corporation.

It was not long ago that a corporate landlord could not terminate a tenancy to move into a rental unit.  The thought was that a corporate entity had no personalty and hence could not occupy a rental unit for residential purposes.  This position was changed by the Divisional Court in a case called Slapsys (1406393 Ontario Inc.) v. Abrams wherein the Court held that a Corporate landlord could indeed serve a Notice of Termination in Form N12 (Landlord's own use) where that use was for the benefit of a single shareholder of the corporate landlord.  

In a more recent case this principle has been extended to include serving a Notice of Termination (in form N12) for the mother of the single shareholder of a corporate landlord.  That decision is from the Divisional Court in Saleh v Bedford Properties Estates Limited decided on November 19, 2012.

It is apparent that the Landlord and Tenant Board and now the Divisional Court is eroding the security of tenure enjoyed by tenants in the "not for cause" realm.  Based on this decision it is not too difficult to see the current limitation of "single" shareholder being erased altogether.  If the Board is prepared to terminate a tenancy for the mother of a corporate shareholder it becomes increasingly difficult to reject, on a principled basis, a notice of termination for a second shareholder.  Given that a single shareholder is now able to terminate for any of the relations identified in the N12 (children, spouse, care-giver, spouse's parent, spouse's child) aren't the grounds now so broad (given the number of people for whom a corporate landlord can terminate a tenancy) so as to limit the availability of termination to single shareholder corporate landlords decidedly arbitrary?  The rationale for allowing a single shareholder of a corporate landlord to terminate for a large range of relations seems to be a rationale that can easily be suited to corporations that are closely held by the same group of people.

For example, a corporate landlord (owned by a single shareholder) is able to terminate the tenancy of a tenant where that shareholder wishes his spouse to move into the unit.  However, at present, if that corporate landlord is owned by both the husband and wife as shareholders termination is not possible if the wife (or husband) wishes or needs to move into the rental unit (imagine a situation of impending divorce or separation).  In both situations the same person is intended to occupy the rental unit for residential purposes--the only difference is the share structure of the corporate landlord.  In my view, maintaining that position/distinction becomes a matter of form trumping substance which in the landlord and tenant context under the Residential Tenancies Act is precisely something that the Board is directed to disregard.

Michael K. E. Thiele
Ottawa, Lawyer
310 O'Connor Street, Ottawa, Ontario
www.pqtlaw.com    
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14 comments:

  1. Have there been any other cases where this has happened?

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  2. Hi Michael,

    We are currently in a similar position but with my mother's home. My mother would like to claim the basement apartment back as I (daughter) would like to move into the unit. The tenant has been given a N12 form and has verbally confirm he has not intentions of going anywhere. We have indicated that we have asked him several times verbally to leave but has forced us to proceed with going to the Board. The only concern we have is we never signed any lease agreement and all rent has been paid in cash.

    Our deepest concern is, will we be able to get our home back? We really have no intentions of re-renting the basement back out.

    This tenant is determined and strongly believes as long as he pays his rent he is entitled to stay for as long as he wishes.

    Hopefully you can provide me with some advice.

    Thanks in advance.

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    Replies
    1. Thank you for the question. I presume that you are at the end of the lease term or on a month to month tenancy? If so, the termination date is for the last day of the month that provides at least 60 days of Notice. Check your N12 to ensure that it is accurate as I have found that tenants who resist eviction are often relying on mistakes that have been made in a Notice of Termination. If your N12 is correct you should apply to the Landlord and Tenant Board right away (Form L2). As the person moving into the unit (daughter) you will need to file a sworn declaration affirming your intention to occupy the premises for residential purposes. You don't need a big explanation of why nor do you need to justify your desire to occupy the premises. It is enough that your mother owns the unit and wants to allow you to occupy it.

      At the hearing the tenant can challenge the good faith of the delivery of the notice and challenge whether you will actually move in etc.. Presuming he is unsuccessful in challenging your intentions his next avenue would be to seek relief from eviction or a delay in the eviction date (under section 83) of the RTA. Whether he has grounds for delayed or refused eviction depends on his circumstances. It would be quite rare for an eviction to be refused especially in your circumstances where a daughter is moving in with a mother.

      You will likely be successful in the long run--though there can be hiccups along the way. You will have greater immediate success and will be able to anticipate the tenant's tactics and strategies if you retain an experienced representative (i.e. a lawyer or licences paralegal). While the system is theoretically set up to allow people to represent themselves there is no doubt that it is an adversarial system where the better prepared or the better strategist can win.

      With respect to your specific questions--the fact that there is no signed lease likely means that you are on a month to month tenancy. There is no problem with rent being paid in cash--it is perfectly legal and you are not denying receipt of the rent. Even if you took a position that there was no lease and no rent paid (not denying it in an immoral way--but requiring proof of the tenancy to satisfy a legal test) the reality is that the Board find that there is a lease--oral or implied (both of which are just as valid as a written lease).

      Good luck, please let me know what happens.

      Michael K. E. Thiele

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    2. Hi Michael,

      Thank you for the thorough response!

      Quick question, if the tenant ever decides to change his mind about relocating. Should I ask him to fill out a N11 form? What should I do to ensure he will not go back on his words?

      Thank you,

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    3. Hello again:

      Until a tenant moves out and returns the keys to you there is no way to ensure that the tenant will actually move out in accordance with an agreement. The N11, which is an agreement to terminate, is a very good document to sign with your tenant but it does not guarantee anything. What the N11 allows you to do is to apply to the Landlord and Tenant Board for an eviction order based on an agreement to terminate. You may apply to the Board as soon as the N11 is signed and have the eviction Order in hand for the end of the term and be able to file it with the sheriff should the tenant not move out in accordance with the agreement to terminate. If you think that the tenant will indeed move out in accordance with the agreement you can wait and see. If the tenant does not move out then you have 30 days from the termination date to file the N11 (with form L2) at the Board. The problem with waiting is that the hearing process will take several weeks and there is always the risk of an appeal. If you have made plans to move in on the expectation that the tenant has moved out--the delay can be very frustrating.

      The N11 form--being an agreement to terminate--requires signatures from both. A tenant does not have to cooperate in signing one and in fact can give you a Notice of Termination or even just a letter advising when the tenancy will be terminated. You should always respond to a unilateral notice from your tenant stating that you agree with the termination date his letter or notice proposes and accept that termination date. This is particularly important where the tenant's unilateral notice does not comply with the Notice provisions under the RTA. What you are trying to do is to turn a unilateral notice of termination into an agreement to terminate by accepting the date the tenant is proposing. An Agreement to Terminate can be for any date without any particular notice periods.

      Michael K. E. Thiele
      Ottawa Lawyer

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  3. Hi Michael again,

    Thanks again for all your patience with answering my questions.

    Since then, my tenant has filed a T2 against us and is scheduled for next month. He is requesting for us to stop the action that has caused the reason of application and is requesting for lease.

    We attended our hearing to today and the board member has decided to the adjourn the date to tenant's T2 date. We are informed that both will be reviewed on Feb 12th. I understand the board likely decided to pursue this route as the tenants T2 hearing date is still before the termination date (Feb 28th). Will the tenant's T2 offset our termination date? Will the LTB give the tenant more time at my residence? What should I anticipate?

    Thanks again for all your advice.

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  4. Hi There:

    Without your name it is difficult for me to follow the chain of conversation. Looking up at the comments, I presume you are moving into your mother's home in the basement? On that fact scenario, it is difficult to see what the T2 could actually be about. It doesn't make sense to file a T2 seeking an Order that you stop asking for the basement back.

    Anyway, to your questions about process. It is quite normal for the Board to adjourn an application to the date of a subsequently filed application. The principle is that the Board wants to hear all issues pertaining to a tenancy at the same time. It is more efficient that way and also allows for the proper consideration of section 83 considerations in an eviction matter. With respect to your termination date. The termination date in your notice is theoretical at best. Presuming you are successful the Board will make an Order terminating the tenancy on whatever date they deem fit----the termination date in your notice of termination is just one factor that the Board considers. They will never terminate the tenancy earlier (as that is against the law) but very often extend the termination date if the hearing is close to the termination date. They will consider what is a reasonable time for the tenant to move and delay the eviction until that date. It is for this reason, that in this Blog, I strongly recommend filing application immediately after serving and N12 and not wait to see if the tenant moves or not. This is especially important if you need the apartment by a fixed date. At the hearing you can argue that termination should not be delayed and that your termination date in the Notice should govern. You could argue that the delay was caused by the tenant himself and that you shouldn't be prejudiced. You should also be prepared to lead evidence on the importance of early possession (as close to the termination date as possible). If you mother needs health care, nursing, or support services from you that is certainly a factor that would encourage the Board to grant a termination closer to the date in the Notice of Termination. If the tenant leads evidence of a profound hardship caused by eviction on a particular date then that may result in the termination date being extended. In N12 cases the range of time between hearing, termination and eviction varies significantly as the Board takes into account the particular circumstances of the parties.

    Hope that helps a bit. You can see that your situation is getting complicated. You may wish to consider hiring an experienced landlord and tenant lawyer or paralegal at this time. The reason is that if you make a mistake and lose it can be very difficult for a lawyer or paralegal to "fix it" after the Board has made a decision.

    Michael K. E. Thiele
    Ottawa Lawyer
    613-563-1131

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  5. Hi Michael,

    Thank you for your response! I honestly is appreciated of your advice.

    To be honest, I am having difficulties finding a legal representative in the Toronto area.

    In regards to the board making a decision, I presume that the Board will ask the tenant to leave but it is a matter of what termination date is set out correct? I cannot foresee the Board allowing the tenant to stay beyond 6 months from the date of the next hearing.

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  6. Hi Again: If the Board finds that the N12 was served in good faith and that you or your mother is entitled to occupation then the termination of the tenancy should be within a month or two at most. However, there are exceptions. I have seen the Board delay eviction for up to one year and I have also seen the Board refuse eviction on the grounds that the tenant needed the apartment more than the landlord. The latter arose from the tenant having an adult disabled child who had lived in the same unit for 30 years compared to the landlord who acknowledged that she intended to occupy the premises for as long as it took her to get a teaching job. The landlord had options, the tenant did not.

    The point is that you are likely correct and the termination will "close" to the termination date if it is determined that your mother is indeed entitled to terminate the tenancy and regain possession of the unit. However, the facts of each case and the circumstances of each person are hugely significant when it comes to the exercise of discretion under section 83 of the Residential Tenancies Act.

    Michael K. E. Thiele

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  7. Michael, this is a wonderful blog. Very glad I found you. Can you give further information or a link to the LTB decision that allowed the tenant with the disabled son to stay because the landlord had options and the tenants did not? Thank you :)

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  8. Rèchelle Krieger10 November 2015 at 22:55

    My dad passed away a week ago, November 2nd and the landlords asked me a day later when I was coming to remove his things and if I wanted them to do it , again I got a texted from the landlord November 10th asking when I'm coning to remove his things , my dad died before he gave them his rent for the month and he never paid last months rent do I still have 30 days to remove his things ? Do they have the right to go in there and do it without me because of the rent not being paid this month and no last months rent ? How do I handle this ?

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    Replies
    1. Hi: I'm sorry for your loss. Your father's tenancy terminates 30 days from the date of his death. The fact that rent had not been paid does not change that. The landlord could serve a Notice of Termination for Non-Payment of Rent---but that is a pointless exercise as the tenancy is terminating in 30 days regardless. The landlord does not have a right to enter the unit, to move your father's possessions, or interfere in any other way--other than perhaps to deal with anything in the unit that is perishable. Presumably you are your father's executor? Or if not executor then the only next of kin who will deal with his property? If so, then the landlord needs to deal with you. Be forthright with the landlord about your plans. The unpaid rent becomes a claim against your father's estate. It is a debt that the estate must pay in proportionate share with all other debts. The debt does not become yours to pay. The landlord can not seize property to pay for the rent.

      Hope that answers your questions.

      Michael K. E. Thiele

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  9. Hi Michael,
    I was reading some of the comments and decided to ask you something. I live in apartment building, the building itself allow pets but the apartments owner don't. When I was signing my lease, one of the conditions was that I wasn't allowed to have pets in the apartment because the owner is allergic but she doesn't leave in the building. My question is even if I did sign the lease with the condition of not having pets, can I still bring pet in?
    Thank you!!

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  10. Michael, the information you give is very informative, thank you.
    My wife and I are new landlords in Toronto. I have a tenant who was leasing and now is renting month to month for the past 5 months. I need to ask the tenant to move out so my father can live there. Wondering must I use N12 form and register it with Landlord and Tenant Board or can I send them an email. In addition, what type of information is needed to be included in the email?
    thank you,

    ReplyDelete

IMPORTANT NOTICE

Any answers provided are intended to reflect the Law of Ontario, Canada. The answers are not legal advice and no one should rely on the answers provided as legal advice. The answers are intended to be general information about Ontario Law and are the personal view of the author based on the limited facts provided to the author. The answers may not be legally accurate and may indeed be contrary to the law of Ontario. Answers and conclusions drawn may have been different if facts had been shared that have not been disclosed in the comment/question. This blog is intended to assist people in learning about Ontario Landlord and Tenant Law. However, if you have actual legal problems this blog should under no circumstances replace proper legal advice obtained by retaining a lawyer or licensed paralegal to advise you. Nothing in this blog, comments submitted or answers provided, gives rise to a solicitor and client relationship. Comments are published as submitted and commenters should be aware that if they identify themselves in a comment that their identity will become public upon the comment being published. Comments that have been published may be deleted upon request to the author.

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About Michael Thiele

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Ottawa lawyer and partner at Quinn Thiele Mineault Grodzki LLP.  Graduate of Queen's University in Kingston, Ontario.  Called to the bar in Ontario in 1997.  Undergraduate degree at Colby College, Waterville Maine, U.S.A.