As discussed in one of our previous posts, the test of bad faith for winning a T5 application about bad faith eviction consists of three parts (and the former tenant must prove all three parts on a balance of probabilities), articulated in RTA subsection 57(1):
2) The former tenant vacated as a result of that notice (or application or LTB order based on that notice);
3) No person referred to under RTA section 48 or 49 occupied the rental unit within a reasonable time after the former tenant vacated the rental unit.
This post focuses on LTB rulings on the timing of good/bad faith for the purposes of the first part of the three-part test of bad faith under RTA section 57.
Is the good faith requirement limited only to the time of service or does it extend beyond the time of service of N12?
- In one of the rulings below (Member Roger Rodrigues' 7) TST-87559-17 (Re), 2017 CanLII 142773 (ON LTB), <https://canlii.ca/t/hrxb3>), the landlord informed the tenant of his change of circumstance, so the tenant actually had the option to stay, and it protected the landlord.
- In another ruling (Member Lynn Mitchell's 3) CET-67272-17 (Re), 2017 CanLII 70040 (ON LTB), <https://canlii.ca/t/hmmx9>), the adjudicator stated: "I consider that the good faith requirement contained in section 48 of the Act obliged the Landlord to notify the Tenants of the change in circumstances as soon as they became known...".
- In another ruling (Member Diane Wade's 4) Karall v Goo, 2021 CanLII 80488 (ON LTB), <https://canlii.ca/t/jht2w>), the landlord was told by the tenant that the tenant bought another place, so the landlord didn't inform the tenant of the change of circumstance (because the landlord thought that the tenant's agreement of purchase and sale was firm and the tenant would be moving anyway), and it was allowed.
- In another ruling (Member Anna Solomon's 1) TST-94914-18 (Re), 2019 CanLII 134579 (ON LTB), <http://canlii.ca/t/j6w3w>), the landlord obtained the eviction order first, then the real estate sale fell through, but the landlord enforced the eviction order via the Sheriff anyway, and this action resulted in the finding of bad faith under a T5 application.
- This is quite different from some other (perhaps older) rulings, for example, Member Louise Horton's 2) Wakula et al v. Yaoutsis, TST-58317-14 (Re), 2015 CanLII 22312 (ON LTB), <http://canlii.ca/t/ghdtp>, where it was stated that "the issue before the Board was whether at the time it was given, the notice was given in bad faith. ... That this had changed around the time the tenants were moving out, does not negate" that.
As you can see, LTB rulings are somewhat divergent on this, but circumstances are taken into consideration, and things get very fact-driven. It is important to get legal advice early on.
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List of rulings in the post:
1) TST-94914-18 (Re), 2019 CanLII 134579 (ON LTB), <http://canlii.ca/t/j6w3w>
At para. 23: "bad faith can extend to the period between when the N12 Notice was given, and the time when a tenant moves out."
2) Wakula et al v. Yaoutsis, TST-58317-14 (Re), 2015 CanLII 22312 (ON LTB), <http://canlii.ca/t/ghdtp>
At para. 12: "the issue before the Board is whether at the time it was given, the notice was given in bad faith."
At para. 17: "That this had changed around the time the Tenants were moving out, does not negate that the notice was given in good faith."
At par. 20: "The good faith obligation attaching to an N12 notice must surely survive the instant of its service."
4) Karall v Goo, 2021 CanLII 80488 (ON LTB), <https://canlii.ca/t/jht2w>
At para. 35: "The case law establishes that there is a duty on the Landlord to act in good faith beyond the date the N12 is served."
5) TST-66921-15 (Re), 2016 CanLII 39740 (ON LTB), <https://canlii.ca/t/gsb23>
At para. 14-15: "After serving the N12 notice, there was a change of circumstances which compelled the Landlord to abandon his and his family’s plans. The Landlord has met his evidentiary burden to explain why he did not take possession.
15. Further, it is the Landlord’s intention at the time that the N12 notice is served that is relevant."
6) Gill et al v. Johnson, TST-60739-15 (Re), 2015 CanLII 69379 (ON LTB), <https://canlii.ca/t/glvbg>
At para. 9-10: "it is reasonable to expect a landlord to determine in advance whether an occupation plan is viable or not before serving a notice of termination for own use. In the Landlord’s situation, this would have involved very basic due diligence in advance to determine the reasonable likelihood of finding suitable employment in Ontario. [...] good faith intention has to be a reasonable one. It has to be more than the whim this seems to be."
7) TST-87559-17 (Re), 2017 CanLII 142773 (ON LTB), <https://canlii.ca/t/hrxb3>
At para. 17: "the assessment ... does not end after the N12 notice is given to a tenant. Rather, the inquiry is ongoing."
8) TST-80046-16 (Re), 2017 CanLII 28627 (ON LTB), <https://canlii.ca/t/h3r25>
At para. 25: "this means that at the time the Landlord gave the N12 notice to the Tenant there must have been a genuine intention to move into the rental unit."
At para. 21: "Once the May Agreement failed to firm up, the N12 served in support of that agreement conceptually became a nullity, as there was no longer a genuine, good faith intention of that purchaser to occupy the rental unit. Likewise, it has become an absolute certainty, once the agreement terminates, that the agreement which gave rise to the notice of termination will not be completed. On either ground, the circumstances on which the notice was based have changed, rendering it moot."
At para. 13: "He found that the even though the Purchaser's son did not immediately take possession or continue to live in the rental unit, that did not mean that the N12 Notice, when it was served, was given by the Sellers/landlords in bad faith. He relied on the landlord’s evidence that when the landlords served the N12 notice, there was no reason to disbelieve the Purchasers' stated intention for use of the unit."
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Let's look at these rulings in some detail:
This interesting LTB ruling by Anna Solomon supports the idea that, unlike what we see in cases like 2) Wakula et al v. Yaoutsis, TST-58317-14 (Re), 2015 CanLII 22312 (ON LTB), <http://canlii.ca/t/ghdtp>, the determination of whether or not the N12 was served in bad faith (the first prong of the three-prong test of bad faith from RTA Section 57 for T5 application purposes) is NOT limited just to the time when the N12 was given, but instead "can extend until the time when the tenant moves out".
In Anna Solomon's 1) TST-94914-18 (Re), 2019 CanLII 134579 (ON LTB), <http://canlii.ca/t/j6w3w> ruling below:
- The LTB determined that the landlord served an N12 for purchaser's use in good faith at the time when it was served.
- The landlord won at the N12 hearing.
- The tenant appealed the N12-based eviction order, obtained a stay, but breached the terms of the stay.
- Meanwhile, the real estate sale fell through because of the delays.
- The landlord called the Sheriff to enforce the N12-based eviction order AFTER the real estate sale fell through. Because of this fact, the N12 notice was considered to be "served in bad faith".
The landlord was ordered to pay $17,770.00 to the tenant.
(The picture below is provided just to show some key events from the ruling.)
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"23. However, I also agree with the following statement from the Board’s order TST-87742-17-RV, which the Landlord submitted: “the Landlord’s obligation to act in good faith extends beyond the time the notice of termination is served”. I take this statement to mean that bad faith is not confined to the moment in time when a landlord gives a tenant an N12 Notice. I find that bad faith can extend to the period between when the N12 Notice was given, and the time when a tenant moves out."
1) TST-94914-18 (Re), 2019 CanLII 134579 (ON LTB), <http://canlii.ca/t/j6w3w>
"13. In the meantime, the agreement of purchase and sale between YM and CM did not close. CM pulled out of the deal because the Tenant did not move out of the rental unit by the closing date and YM could not provide vacant possession. Initially, the parties may have discussed the possibility of salvaging the deal. However, at a certain point the Tenant made it clear that there was no potential for the sale proceeding. The parties agree that in September 2017, the Tenant’s lawyer sent YM’s lawyer an email (which was forwarded to YM), stating that the sale would not close because the Tenant no longer qualified for the same mortgage rate. I find that this email marked the end of the sale. After this email was sent, the Tenant never indicated that she was still interested in purchasing or moving into the rental unit. Any correspondence between the parties (through their agents and lawyers) after September 2017 was about the terms of a financial settlement only.
[...]
The Landlords gave the N12 Notice in bad faith
18. I agree with the Landlords that they did not act in bad faith when they served the N12 Notice on the Tenant. In other words, the evidence establishes that at the time the Landlords gave the Tenant the N12 Notice they genuinely intended to sell the rental unit to CM and they genuinely believed that CM would move into the rental unit after the sale closed.
19. When the Landlords served the N12 Notice, they had no reason to believe that the sale would not close. YM had executed an agreement of purchase and sale with CM and CM had provided a deposit of $20,000.
20. The Landlords also had no reason to believe that CM would not move into the rental unit after the sale closed. The Landlords presented uncontested evidence that CM, through her real estate agent, led them to believe that she was going to move in. The agreement of purchase and sale was negotiated between the parties’ real estate agents. The Landlords and CM did not have any direct communications with each other. In fact, the Landlords and CM only met at the hearing of this application at the Board. The agreement of purchase and sale included a clause that CM required vacant possession, so she could move in. Further, CM swore an affidavit in support of the Landlords’ application for eviction, confirming her intention to move in.
21. The Tenant’s legal representative argued that the Landlords should have acted with greater diligence and inquired further into CM’s actual intention to move in, especially since it appears that CM may have contemplated renting the unit out. However, as already stated, this sale was negotiated through real estate agents and there was no evidence presented that the Landlords’ agent had any information that CM was not intending to move in, which the Landlords could have discovered if they had probed further.
22. In many other cases, the Board has found that an unforeseen change in circumstances that results in the person listed in the N12 Notice being unable to occupy the rental unit does not constitute bad faith (see, for example, TST-66921-15, TST-87559-17, TST-80046-16). I agree that this is a case where an unforeseen change of circumstances resulted in CM failing to take occupancy of the rental unit. This change of circumstances was the agreement of purchase and sale failing through. I am satisfied that the Landlords did not foresee this happening when they served the N12 Notice.
23. However, I also agree with the following statement from the Board’s order TST-87742-17-RV, which the Landlord submitted: “the Landlord’s obligation to act in good faith extends beyond the time the notice of termination is served”. I take this statement to mean that bad faith is not confined to the moment in time when a landlord gives a tenant an N12 Notice. I find that bad faith can extend to the period between when the N12 Notice was given, and the time when a tenant moves out.
24. In the present case, I find that the Landlords acted in bad faith when, in November 2017, they asked the sheriff to enforce the Board’s eviction order when they already knew (from the email from the Tenant’s lawyer sent in September 2017) that there was no prospect of the sale closing because the Tenant no longer qualified for her mortgage rate.
25. The Landlords’ legal representative argued that the Landlords enforced eviction not as a result of the N12 Notice they served but as a result of the Tenant failing to comply with a term of the Divisional Court’s order, dated October 26, 2017. However, the Divisional Court’s order was issued as a direct result of the Tenant’s appeal of the Board’s eviction order and the Board’s eviction order was made in relation to an application based on the N12 Notice.
26. Further, the Notice of Vacant Possession the sheriff posted on the rental unit after changing the locks quotes the Board’s order HOL-01337-17 This means that the sheriff relied on the Board’s order as authority for changing the locks.
27. In short, I find that there is a direct connection between the eviction and the N12 Notice. I also find that by directing the sheriff to enforce eviction at a time when they knew that CM’s purchase of the rental unit would not proceed, and CM would not be occupying the rental unit, the Landlords acted in bad faith."
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This is different from what we see in an older ruling in 2) Wakula et al v. Yaoutsis, TST-58317-14 (Re), 2015 CanLII 22312 (ON LTB), <https://canlii.ca/t/ghdtp>, where the landlord's circumstances changed right around the time when the tenants were moving out, and it was accepted without negating the good faith.
2) Wakula et al v. Yaoutsis, TST-58317-14 (Re), 2015 CanLII 22312 (ON LTB), <https://canlii.ca/t/ghdtp>
"7. It was undisputed that the Landlord told the Tenants verbally that he was going to move into the unit and bring his elderly mother with him. The Tenant ‘NW’ actually discussed with the renovator how to make the washroom and kitchen better for the Landlord’s mother.
8. In a second letter dated June 18, 2014, the Landlord agreed to extend the termination date to October 31, 2014. The Tenants had asked for more time because of the Tenant JB needed somewhere to move his photography equipment and they have an aging dog.
9. The Tenants were unable to find suitable accommodation at the price point they could afford and ultimately moved to Hamilton, on or around August 30, 2014.
10. There is no dispute that the unit was advertised for rent sometime in September 2014, when a sign was put up in front of the house. MZ, the Tenants’ friend, submitted a photograph he took of the sign. MZ also called the number on the sign and was told the unit was available for the end of September at a monthly rent was $500 more than the Tenants had paid. MZ did not view the unit and did not make any further inquiries.
11. There is also no dispute that the unit is currently rented for an amount that is at least $350.00 more than the Tenants’ were paying.
12. The Tenants believe that the new tenants moved in sometime in October 2014 based on an email from a friend on October 21, 2014, that ‘the people at your old address are … paying $2,400.00 per month.’ The email is hearsay as the individual that wrote it did not attend the hearing. As such, it is accorded little weight. In any event, the issue before the Board is whether at the time it was given, the notice was given in bad faith.
13. The Landlord’s evidence is that when he gave the notice letters to the Tenant, his intention was that his elderly mother, who currently lives on her own, would live in the unit. He would stay with her for six months of the year and stay with his family out West for the other six months of the year. While he was out West, his brother would look after their mother, although he would not stay with her.
14. The Landlord’s mother then refused to move into the unit. The Landlord stated that his mother was happy with the extended date but was not happy when the Tenants decided they were leaving in August after all and decided not to move into the unit. The Landlord could not afford to carry the unit without his mother’s financial contribution and decided at that point to re-rent it instead.
15. The Landlord submitted that he did actually move into the unit after the Tenants had moved out, occupying one of the rooms that was not being renovated, supervising and participating in the renovation, from September 1, 2014 to November 18, 2014. The new tenants began staying in the complex around that time and started paying rent when the tenancy officially began on December 1, 2014.
16. That the Landlord stayed on site during renovations does not in my view qualify as occupying the unit for the purposes of residential occupation. Indeed, the Landlord’s evidence is he had already decided to re rent the unit at that time. Giving a notice on the for part time residential occupation, does not in view qualify as ‘residential occupation’ as meant by the Act. However, the overarching issue is whether the notice was given in bad faith.
17. The evidence from both parties is consistent that at the time the notice was given the Landlord’s intention that his mother would move into the unit. That this had changed around the time the Tenants were moving out, does not negate that the notice was given in good faith.
18. Having determined the notice was not given in bad faith, the Tenant’s application must be dismissed."
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Other LTB examples that involved a change of circumstances:
Lynn Mitchell's decision 3) CET-67272-17 (Re), 2017 CanLII 70040 (ON LTB), <https://canlii.ca/t/hmmx9> extending good faith requirement past the instant when the N12 was given:
"20. In my view, limiting the question of good faith to an exploration of the mind of the Landlord at the instant of serving the N12 notice, and to ignore all the surrounding circumstances, would lead to results inconsistent with the objects of the Act. To require the Tenant to establish what was in the mind of the Landlord at the instant of the N12 notice service, without regard to the surrounding circumstances and to the behaviour of the Landlord between the service of the N12 notice and the termination date, would upset the balance of interests which the Act aims to achieve. The good faith obligation attaching to an N12 notice must surely survive the instant of its service."
"12. There is no doubt that the Tenants have proven the second and third parts of the test set out in section 57 of the Act. They moved out as a result of the N12 notice of termination served by the Landlord and neither the Landlord nor his parents moved into the rental unit within a reasonable amount of time after the Tenants vacated the rental unit.
13. Therefore, the remaining question for me to consider is whether the N12 was served in bad faith. As set out below, I find that it was because the Landlord acknowledged that he never intended to move into the rental unit. Even if I were to accept the Landlord’s assertion that at the time he served the N12 his parents intended to move into the unit, that intention had ceased to exist well before the Tenants moved out and before the termination date on the N12 notice. The intention had also ceased to exist before the termination date on the Tenant’s responding notice of termination.
14. As noted above, the N12 notice, dated February 22, 2017, indicated that the Landlord wanted to move into the rental unit himself. However, the Landlord testified that the N12 notice contained an error and that he never intended to move into the unit himself. He claims instead that his parents intended to move into the unit.
15. The Tenants vacated the unit in the belief that the Landlord intended to reside there himself. The Tenant JS testified that if he had understood that the Landlord claimed that his elderly parents intended to move into the unit, the Tenants would have questioned the efficacy of the notice. The Tenant was deprived of information by which he may have chosen to subject the N12 notice to a hearing. Such a hearing would require, at a minimum, affidavit evidence from the Landlords’ parents. No such evidence was adduced at any time.
16. I find that the misleading information in the N12 notice is sufficient to ground a finding that the N12 notice was given in bad faith.
Bad Faith Nonetheless Made Out
17. In the event that the failure of the Landlord to properly identify the individuals for whom the eviction is being sought is not determinative, such that the good faith of the Landlords’ parents to move into the unit should be considered, I find nonetheless that it is more likely than not that the notice was given in bad faith.
18. Even if I were to accept that the Landlord’s parents had the requisite intent to move into the rental unit at the time the N12 notice was served, the Landlord showed reckless disregard in failing to inform the Tenant that he no longer needed the rental unit. The Landlord failed to inform the Tenants that the Landlord’s parents had changed their minds before the Tenants had even vacated the rental unit.
19. While the Act describes the test in section 57 as being bad faith in the issuance of the notice, one must consider the intent of the Act. The purpose of sections 48 and 57 are to balance the good faith rights of a landlord to take occupancy of a unit with the rights of tenants to security of tenure.
20. In my view, limiting the question of good faith to an exploration of the mind of the Landlord at the instant of serving the N12 notice, and to ignore all the surrounding circumstances, would lead to results inconsistent with the objects of the Act. To require the Tenant to establish what was in the mind of the Landlord at the instant of the N12 notice service, without regard to the surrounding circumstances and to the behaviour of the Landlord between the service of the N12 notice and the termination date, would upset the balance of interests which the Act aims to achieve. The good faith obligation attaching to an N12 notice must surely survive the instant of its service.
21. The present situation is not one where the circumstances described in the N12 notice changed after the termination date of the tenancy and the departure of the Tenant. Even if it could be established that the Landlords’ parents planned to reside in the unit and even if the N12 notice had properly identified the parents as the prospective residents, I consider that the good faith requirement contained in section 48 of the Act obliged the Landlord to notify the Tenants of the change in circumstances as soon as they became known – that is, prior to the termination date and prior to the Tenants’ vacating the unit. The Landlord acknowledged that he gave no such notice."
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Unlike Anna Solomon's decision in 1) TST-94914-18 (Re), 2019 CanLII 134579 (ON LTB), <http://canlii.ca/t/j6w3w> (above), in 4) Karall v Goo, 2021 CanLII 80488 (ON LTB), <https://canlii.ca/t/jht2w> (decision by Diane Wade), the landlord was deemed to have acted in good faith throughout, even though he did not inform the tenant before the tenant vacated of his change of circumstances which meant that the tenant no longer needed to vacate. But the reasoning that the landlord provided for this was that the landlord had been informed that the tenant had already bought a house by that time, so he thought that the tenant would be moving out regardless. This explanation worked in this case, and the T5 application about bad faith eviction was dismissed. Member Wade acknowledged at para. 35 that "The case law establishes that there is a duty on the Landlord to act in good faith beyond the date the N12 is served."
"Determinations:
1. The Tenant moved out of the rental unit because the Landlord gave the Tenant a notice of termination claiming the Landlord required possession of the rental unit for his own use.
2. I find that the Landlord did not give the Tenant the notice in bad faith. I say this for the reasons that follow.
Undisputed Facts
3. The Landlord served the Tenant a N12 notice of termination for the Landlord’s own use of the rental unit on October 17, 2019, with a termination date of January 14, 2020.
4. The residential property was a townhome, the Tenant’s rent was $1,870.00 per month. The Tenant lived in the unit since 2010. Her tenancy was month-to-month, and the term was from the 15th to the 14th.
5. The Tenant vacated the rental unit on January 14, 2020.
6. The Landlord did not end up moving into the Tenant’s unit.
7. The Landlord sold his residential home in Oakville on August 3, 2019, with a closing date of November 25, 2019. The original date of the closing was November 28, 2019. The Landlord bought a new home on November 4, 2019, with a closing date of November 25, 2019.
Tenant’s Evidence and Submissions
8. The Tenant testified that when she received the N12 notice, she began looking for another place, but she could not afford to pay the high rents in Oakville. Therefore, she started looking elsewhere, where it would be more reasonable.
9. The Landlord advised her that he had to serve the notice because he had not found a new place to live yet, and his house sale was closing the end of November 2019.
10. The Tenant decided to buy as opposed to rent. On October 28, 2019, the Tenant put an offer in on a home in Woodstock, where prices were affordable. The Tenant advised the Landlord of the offer. The offer was accepted, conditional on financing.
11. On December 11, 2019, the Tenant’s mortgage was approved.
12. The Tenant received the keys for her home in Woodstock on January 10, 2020 and arranged for movers to come on January 13, 2020. The movers brought her son’s belongings to his aunt’s home in Oakville, so he could finish his final year of high school in Oakville.
13. The Tenant submits that the Landlord never intended to move into the rental unit, it was a means of evicting her in order to renovate and sell to benefit himself. The motive for the N12 appears to be purely for financial gain, the proceeds from the future sale of the rental property likely helped him secure a higher-value property for himself and his family. In support of her argument she entered into evidence the sale prices of the Landlord’s personal home and rental property, postulating it was these sales that helped him buy his own home worth about 2.5 million dollars.
14. Further, the Landlord’s email to her on November 22, 2019 states the reasons for entry are to: review the condition of the home; and, “give my wife a sense of the home, as she has never been in it”. The email said a friend and a contractor would also be entering to “see what work is needed and start thinking of design (example, paint colour, flooring)”.
15. The Tenant says this email shows the ruse the Landlord was playing because they had already bought their own home at this time, therefore the entry to prepare the property for move-in was unnecessary.
16. She also submitted that by not advising her that he no longer intended on moving into the rental unit points to his bad-faith – he had a duty to tell her this so she could choose to stay in the unit instead of vacating. Therefore, her application should be granted, entitling her to the remedies allowed under the legislation.
Landlord’s Evidence and Submissions
17. The Landlord testified that they began looking for a new home to buy in April 2019 because they had listed their home for sale on March 21, 2019. When their home sold on August 3rd, they stepped up their search. The intention all along was to buy a larger, newer property for him and his family.
18. When he served the N12 notice on October 17, 2019, he was getting desperate because they had not found a new place to buy, and the closing date of November 25th was quickly approaching.
19. As they have no family in the area, on October 30, 2019 the Landlord booked a 99-night stay at Staybridge Suites Oakville, as evidenced by the email reservation confirmation. The stay was past the termination date in the N12 to allow for some renovations to be done before moving into the rental unit.
20. On October 29th, the Landlord reserved a moving container from Cubit Portable Storage, for delivery on November 21, 2019, the reservation that was entered into evidence notes the reason for the container as “moving” and that it was to be stored at the Cubeit location.
21. From April to August 2019, the Landlord visited almost 30 homes, and put offers in on approximately four different homes, as evidenced in his affidavit entered into evidence.
22. The Landlord testified that he had previously put an offer in on the home on Linbrook Road in Oakville, but it was rejected because of the price differential. At the beginning of November, the Landlord was approached by the seller’s agent and asked to put in another offer. The Landlord did this on November 4, 2019, and it was accepted. The purchase only happened because the agent approached him.
23. He did not tell the Tenant that he bought the house and hence would not need to move into the rental unit because she had told him she had bought a place. Therefore, she would not be staying in the unit anyways. Once an offer has been accepted his experience is that the sale will happen, even if conditional on financing. Therefore, he believed the Tenant would be buying and moving into that home.
24. The Landlord submitted that he acted good faith all along; when he gave the notice, he believed he and his family would be moving into the rental unit for at least year and take that time to look for a larger home to buy. He did not tell the Tenant about buying a new home because of her emails about buying herself. The Tenant was excited about having bought her own place. He did not do anything out of bad faith, there was a change in circumstances whereby they were able to buy and move directly into their purchased home instead of moving into the rental home. Had the agent not approached him, then they would not have known to put another offer in on the house With respect to the rental unit, instead of renting it out, at what could have been a much higher rent, he decided to put it up for sale. The renovations that were done on the home prior to the sale, were slated to be done when they thought they would be moving into the townhome.
Analysis
25. Subsection 57(1)(a) of the Residential Tenancies Act, 2006 (the ‘Act’) states:
The Board may make an order described in subsection (3) if, on application by a former tenant of a rental unit, the Board determines that,
(a) the landlord gave a notice of termination under section 48 in bad faith, the former tenant vacated the rental unit as a result of the notice or as a result of an application to or order made by the Board based on the notice, and no person referred to in clause 48 (1) (a), (b), (c) or (d) occupied the rental unit within a reasonable time after the former tenant vacated the rental unit;
26. Section 57(1) (a) of the Act articulates a three-part test. In order to be successful in her T5 application the Tenant must establish all three of the requirements of subsection 57(1)(a) on a balance of probabilities.
• First, that the Landlord gave a notice of termination under section 48 of the Act (the N12 notice) in bad faith;
• Second, that the Tenant vacated the rental unit as a result of the N12 notice or a Board order based on the N12 notice; and,
• Third, that the Landlord did not move into the rental unit within a reasonable time after the Tenant vacated.
27. Here, it is undisputed that the Landlord did not move into the rental unit. Therefore, I have to determine whether the Landlord rebutted the presumption of bad faith in section 57(5) which says:
For the purposes of an application under clause (1) (a), it is presumed, unless the contrary is proven on a balance of probabilities, that a landlord gave a notice of termination under section 48 in bad faith, if at any time during the period described in subsection (6) the landlord,
(a) advertises the rental unit for rent;
(b) enters into a tenancy agreement in respect of the rental unit with someone other than the former tenant;
(c) advertises the rental unit, or the building that contains the rental unit, for sale;
(d) demolishes the rental unit or the building containing the rental unit; or
(e) takes any step to convert the rental unit, or the building containing the rental unit, to use for a purpose other than residential premises.
28. To make a determination under s.57(5) of the Act, the issue before me is whether the Landlord gave the Tenant the N12 notice of termination in bad faith. In other words, what was the intention of the Landlord when he gave the Tenant the N12 notice?
29. In considering landlord’s own use applications regarding whether a landlord (or a member of her/his family as described in the Act) genuinely intends to move into a rental unit, the Ontario Divisional Court in Beljinac v. Salter1, referring to Justice Steele’s reasons in Feeney v. Noble2 stated that: “…the test of good faith is a genuine intention to occupy the premises and not the reasonableness of the landlord’s proposal.” Moreover, in Kennealy v. Dunne3, the English Court of Appeal pronounced that a landlord need only establish a bona fide wanted and immediate intention to occupy the premises as a residence.
30. Here, the Landlord testified that the reason for wanting to move into the rental unit was because their home had sold and there was only 5 weeks left for them to move. When he gave the N12 on October 17, 2019, they had not found another home to buy, therefore he believed this was the only option at that time. By living in the rental unit, they could take time to find another home to buy, as they were to stay at least one year according to the law. The Landlord had not intended on buying so quickly, the Real Estate Agent for the Seller approached him about putting an offer in. This was a home that they had previously put an offer on, but it had been rejected, therefore when they got a second chance, they took it. This opportunity did not arise until after he had served the Tenant the N12 notice. He would not have known to put a second offer in had the agent not approached him.
31. The Landlord’s evidence also establishes that in the interim between the closing of their home and when they were to move into the rental unit, the Landlord and his family were going to live in a hotel and store their belongings. The Landlord testified that the hotel was book for 99 nights, which would give time to do renovations after the Tenant vacated, before they moved in.
32. Based on the above, I find, at the time the Landlord gave the N12 notice to the Tenant, it was given in good faith.
3. Kennealy v. Dunne, 1976 Nov.26 [1977] 2 W.L.R. 421.
33. The next issue is the Landlord’s responsibility to advise the Tenant of the change in his circumstances.
34. The Tenant referred to Board file TST-87742-17, unreported, where the member agrees “with what was stated in Board orders TST-87559-17 and CET-67272-17 that the Landlord’s obligation to act in goof faith extends beyond the time the notice of termination is served”.
35. The case law establishes that there is a duty on the Landlord to act in good faith beyond the date the N12 is served. In this case, the Tenant argues that by not advising her that they would not be moving in was an overt act of bad faith, I do not see that it was.
36. The Landlord’s testimony was clear that the only reason he did not tell the Tenant was because she had bought her own home at that point in time. The evidence supports his belief that the sale was going to take place. In cross examination the Tenant agreed that she told the Landlord that she had an offer in on her house, but her caveat was that it was conditional on financing. No evidence or testimony was given as to the type of offer she referred to in her emails, therefore, how was the Landlord to know it was conditional on financing.
37. With respect to the Landlord entering the rental unit on November 22, 2019, the Landlord never said it was for the purpose of his family moving in. It was for his wife to get a sense of the place as she had never been inside before, and to determine the decorating and work that needed done. Although the Tenant assumed it was with respect to their moving in, such actions are also attributable to what the Landlord ultimately decided to do – sell the rental unit. It is irrelevant that the Landlord may have gained financially from the sale.
38. I am also not convinced that had the Tenant known of the Landlord’s change in circumstances, that she would have opted to stay in the rental unit as opposed to buying her own home. The evidence supports that she was excited about the purchase, and also that she went through hoops to ensure being approved, such as having her mother also put on the title. I find it is more likely that the Tenant would have continued this process, therefore, she has not been prejudiced by the Landlord ultimately not moving into the rental unit.
39. Therefore, based on the analyses above, I find that the Landlord also acted in good faith after giving the N12 notice.
40. As I have found the Landlord gave the N12 in good faith and act in good faith after giving it to the Tenant, I find the Landlord has rebutted the presumption of bad faith under s.57(5) of the Act, accordingly the application must be dismissed. An order will issue for same."
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"10. The Landlord testified that when he bought the house, he told his real estate agent that he wanted vacant possession of the house. The Landlord testified that he did not have anything to do with preparing or serving the N12 notice. The Landlord testified that at the time he intended to occupy a unit in the house and that he also intended to move his extended family into the other units in the house. The Landlord testified that he was unable to take possession of the entire house until February 2015 because other tenants in the house had not vacated the house until then. The Landlord testified that his contractor started renovations on the house soon after the final tenants vacated, but that there were delays in completing the renovations so the Landlord was unable to move into the house throughout the spring of 2015. The Landlord testified that he had booked movers to move him into the house for July 1, 2015. The Landlord testified that in the spring of 2015 he was promoted in his employment and that, as a result of his employment, he travelled extensively to different cities in the United States in May and June 2015. The Landlord testified that in June 2015 his employer told him that he should move to the United States to cut down on travel costs because travelling between cities in the United States costs significantly less than travelling to these cities from Canada. The Landlord testified that he now lives with a work colleague in Redding, Pennsylvania, but that his long term plan is to move back to Toronto and move into the house with his family.
11. The Landlord testified that his family was not interested in moving into the house when the Landlord was not living there.
12. The Tenant did not challenge the Landlord’s testimony about his intention at the time the N12 was served or about the Landlord’s circumstances.
13. At the hearing, the Landlord’s representative submitted that the fact that the Landlord did not take possession of the rental unit after serving the N12 notice is not irrefutable proof that the N12 notice was served in bad faith, but that this fact causes the onus of proof to shift to the Landlord to establish, on a balance of probabilities, to explain why he did not take possession. I agree with this submission.
14. I find that the Landlord’s evidence establishes, on a balance of probabilities, that the Landlord had a good faith intention to occupy the rental unit at the time the N12 notice was served to the Tenant; however after serving the N12 notice, there was a change of circumstances which compelled the Landlord to abandon his and his family’s plans. The Landlord has met his evidentiary burden to explain why he did not take possession.
15. Further, it is the Landlord’s intention at the time that the N12 notice is served that is relevant. As stated above, the Landlord’s evidence establishes, on a balance of probabilities, that the Landlord had a good faith intention to occupy the rental unit at the time the N12 notice was served to the Tenant.
16. I therefore find that the Tenant has not established, on a balance of probabilities, that the Landlord served the N12 notice in bad faith."
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In 6) Gill et al v. Johnson, TST-60739-15 (Re), 2015 CanLII 69379 (ON LTB), <https://canlii.ca/t/glvbg>, Member Pilon, who previously reviewed and upheld the Wakula v. Yaoutsis decision by Member Horton, stated that "it is reasonable to expect a landlord to determine in advance whether an occupation plan is viable or not before serving a notice of termination for own use" and that "the good faith intention has to be a reasonable one. It has to be more than the whim this seems to be".
6) Gill et al v. Johnson, TST-60739-15 (Re), 2015 CanLII 69379 (ON LTB), <https://canlii.ca/t/glvbg>
"8. The second and third issues were not disputed: the Tenants moved out and the Landlords did not move in. On the first issue, however, as was indicated at the hearing, I determined notice of termination was given in bad faith.
9. This is because it is reasonable to expect a landlord to determine in advance whether an occupation plan is viable or not before serving a notice of termination for own use. In the Landlord’s situation, this would have involved very basic due diligence in advance to determine the reasonable likelihood of finding suitable employment in Ontario. Moreover, I find the need for basic due diligence might have been especially obvious where the Landlord’s previous employment in Ontario did not suit her on her earlier attempt to return to Ontario.
10. The Landlords argued I should apply a recent Landlord and Tenant Board (the ‘Board’) decision in TST-58317-15 issued on March 5, 2015 which I upheld in review order TST-58317-14-RV issued April 13, 2015 to dismiss the application. TST-58317-15 is, however, distinguishable because it addresses bad faith from a completely different angle. The Member hearing that application concluded that “the issue before the Board is whether at the time was given the notice was given in bad faith.” Here, I find that good faith intention has to be a reasonable one. It has to be more than the whim this seems to be, where the Landlord returned in March, 2014 ‘to visit’ in her words, because the Landlord did not do the bare minimum to determine whether her plan for which she evicted the Tenants could become reality. Very simple inquiries could and should have been made before displacing the Tenants in this way. My review decision was not inconsistent with that order, nor is it inconsistent with this one.
11. I therefore find the Landlord served notice of termination in bad faith."
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In contrast with Anna Solomon's decision (above) 1) TST-94914-18 (Re), 2019 CanLII 134579 (ON LTB), <http://canlii.ca/t/j6w3w>, in 7) TST-87559-17 (Re), 2017 CanLII 142773 (ON LTB), <https://canlii.ca/t/hrxb3> (decision by Roger Rodrigues) the landlord's plans changed unexpectedly after serving the N12 notice (when the landlord couldn't sell her house from which she wanted to move to the tenant's unit), BUT, importantly, the landlord informed the tenant that the landlord would no longer require the tenant's unit for vacant possession, and it was the tenant's *choice* to still vacate anyway (the tenant could have stayed and disputed the N12-based L2 application, if it came to that, even though the tenant stated that she was "naive", did not read the full text in the N12 and did not know that staying was an option). So the N12 was deemed to have been served in good faith anyway.
At para. 17: "the assessment ... does not end after the N12 notice is given to a tenant. Rather, the inquiry is ongoing".
"3. On or about May 20, 2017, the Landlord gave the Tenant a Notice to Terminate at End of the Term for Landlord’s or Purchaser’s Own Use (the ‘N12 notice’), for the use of rental unit by the Landlord, with a termination date of July 31, 2017. The Tenant vacated the unit in accordance with the N12 notice.
4. When the Landlord served the N12 notice to the Tenant she owned two houses. The house where the unit is located (the “Hertle house”) and the house where the Landlord was living (the “Eldon house”).
5. The Landlord is a single mother. When the Landlord’s son was diagnosed with autism earlier this year, the Landlord quit her job to care for her son, who did not want to go to school. Upon becoming unemployed, the Landlord decided to sell the Eldon house and move to the Hertle house. The proceeds of sale of the Eldon house would provide the Landlord with required funds and she planned to do some work from home.
6. On May 20, 2017, the Landlord called the tenants living in the Hertle house, including the Tenant, and informed them she was selling the Eldon house and would be moving into the Hertle house. The Landlord executed a Listing Agreement on May 19, 2017 in connection with the Eldon house and the house was listed for sale on June 30, 2017. However, while the house remained on the market until July 30, 2017, there were only seven showings and the house did not sell.
7. On July 29, 2017, the Landlord attended at the unit and met with the Tenant. The Landlord’s affirmed and uncontradicted evidence was that, during that meeting, the Landlord told the Tenant the Eldon house “was not moving” and she would be selling the Hertle house instead. On cross-examination, the Tenant acknowledged this meeting and conversation with the Landlord took place and, further, if the Landlord’s initial plan had worked out, the Tenant would not have brought the within application.
8. Approximately one week after vacating the unit, the Tenant saw a “for sale” sign in front of the Hertle house and a few days later filed this application with the Board. The Landlord did not dispute the Hertle house was listed for sale only days after the Tenant vacated.
Legislation and Analysis
9. Subsection 57(1)(a) of the Residential Tenancies Act, 2006 (the ‘Act’) states:
The Board may make an order described in subsection (3) if, on application by a former tenant of a rental unit, the Board determines that,
(a) the landlord gave a notice of termination under section 48 in bad faith, the former tenant vacated the rental unit as a result of the notice or as a result of an application to or order made by the Board based on the notice, and no person referred to in clause 48 (1) (a), (b), (c) or (d) occupied the rental unit within a reasonable time after the former tenant vacated the rental unit;
10. Subsection 57(1) (a) of the Act articulates a three-part test. In order to be successful in their T5 application the Tenant must establish all three of the requirements of subsection 57(1)(a) on a balance of probabilities. First, the Landlord gave a N12 notice of termination under section 48 of the Act in bad faith. Second, the Tenant vacated the rental unit as a result of the N12 notice or a Board order based on the N12 notice. Third, Landlord did not move into the rental unit within a reasonable time after the Tenants vacated.
11. The determinative issue before me is whether the Landlord gave the Tenant the N12 notice of termination in bad faith. In other words, what was the intention of the Landlord when she gave the Tenant the N12 notice?
12. Based on the totality of the evidence presented, I am unable to find, on a balance of probabilities, the Landlord served the Tenant with the N12 notice in bad faith.
13. In considering landlord’s own use applications regarding whether a landlord (or a member of her/his family as described in the Act) genuinely intends to move into a rental unit, the Ontario Divisional Court in Beljinac v. Salter 2001 CanLII 40231 (ON SCDC), [2001] O.J. No. 2792 (Div. Ct.) (“Beljinac v. Salter) 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.” Moreover, in Kennealy v. Dunne, the English Court of Appeal pronounced that a landlord need only establish a bona fide wanted and immediate intention to occupy the premises as a residence.
14. In the application before me, this means that at the time the Landlord gave the N12 notice to the Tenant there must have been a genuine intention, on her part, to move into the rental unit.
15. The Landlord provided detailed and logical evidence. Moreover, the Landlord’s evidence was credible because it was internally consistent, coherent, supported by documentary evidence before me and, equally important, was not contradicted by any other evidence presented. The Landlord had a plan in place, which was necessitated by her son’s recent medical diagnosis. In order to care for her son, the Landlord had to quit her job. In the absence of employment income, the Landlord decided to sell one of her properties and, with the proceeds of sale in hand, move into the unit. While the Landlord’s decision about which of her two properties would be sold, the Eldon house versus the Hertle house, was not raised during the hearing, in an application for landlord’s own use, and as already stated, the good faith of the landlord is not to be assessed by determining the reasonableness of the landlord’s proposal: Salter v. Beljinac.
16. The Landlord presented her testimony in a compelling fashion. It was very clear the Landlord was exasperated and truly surprised the Eldon house did not sell as expected. This was especially so as, in response to my questions, the Landlord testified other houses in the neighbourhood, with comparable asking prices, sold quickly. Further, the Landlord testified, in preparation of her and her son’s move to the Hertle house, she queried his current school and the Tenant, who works with a local school board, about schools in the area of the Hertle house best suited to accommodate her son. This evidence, coupled with the Landlord advising all tenants of the Hertle house in May 2017 she would be selling the Eldon house and the documentary evidence presented pertaining to the Elton house being listed and the low number of showings, leads me to find, on a balance of probabilities, the Landlord did not give the Tenant the N12 notice in bad faith.
17. In my opinion, the assessment of the evidence going to whether a landlord in good faith requires possession of the rental unit for the purpose of residential occupation does not end after the N12 notice is given to a tenant. Rather, the inquiry is ongoing and, in my view, it could not have been the intent of the drafters of the legislation, in a situation where circumstances change and a landlord concludes, for whatever reason, she/he can no longer move into a unit as planned, the landlord can simply deliberately withhold that relevant information from a tenant. Such withholding of information in essence means, on an application such as this, the landlord would not be coming to the tribunal with clean hands. Equally important, in a case where a landlord fails to disclose the change in circumstances, had such new information been disclosed to the tenant in a timely fashion, the tenant, who relied on the initial notice, could have exercised her/ his right not to move and/or challenge the N12 notice before the Board.
18. In the instant case, I find no reason to impugn the Landlord’s good faith after the N12 notice was served to the Tenant. When it became apparent, in late July 2017, the Eldon house was not selling, the Landlord met personally with the Tenant and advised the Tenant Eldon house was “not moving” and she would be selling the Hertle house instead. I asked the Landlord if, during the July 29th meeting with the Tenant, she thought of advising the Tenant she did not have to move and the Landlord testified she did not “think of it” because, at that time, the Tenant’s belongings were packed and ready to move. I also asked the Landlord why the for sale sign went up so quickly after the Tenant vacated the Hertle house and the Landlord testified her financial circumstances had not changed and she still required funds to support herself and her son. The Landlord added the Hertle house had ninety-six showings, compared to the seven showings of the Eldon house, after it was listed.
19. While I am not finding in the Tenant’s favour, I must also note I found her to be a credible witness. The Tenant readily acknowledged she did not read the N12 notice in its entirety and in particular the portion of the Board’s prescribed form stating she is not required to move out of the rental unit in accordance with the notice. The Tenant testified she is a “first time renter”, was “naïve”, did not know about the existence of the Board and that she could have remained in the unit because, as it turns out, the N12 notice was invalid as the termination date on the notice does not reflect the last day of the term of the tenancy. The Tenant went on to acknowledge, on more than one occasion, this failure to read the N12 notice was a mistake from which she learned.
20. As stated, the Board prescribed N12 notice served to the Tenant clearly informs the Tenant she does not have to move out of the unit if she disagrees with the notice and the Tenant acknowledged not having read that portion of the notice. In addition, while the Tenant testified she was able to remain in the unit, even as late as July 29th when she met with the Landlord, if she knew she “had an option, she did not provide an explanation why she did not do so when she was informed by the Landlord, on that date, the Landlord was no longer selling the Eldon house, but rather the Hertle house. In my view, the Landlord disclosed to the Tenant, in a full and timely fashion, that her initial plans of moving into the Hertle house were not materializing and the Tenant, again, failed to assert her right to remain in the unit—which, as she testified, was “an option” at that point. Given the particular facts of this case, I am unable to find the Landlord’s good faith was displaced from the time when the Tenant was given the N12 notice.
21. For the foregoing reasons, I find, on a balance of probabilities, the Landlord did not give the Tenant the notice in bad faith and, as such, the Tenant’s application must be dismissed."
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In another decision by Roger Rodrigues (see 8) TST-80046-16 (Re), 2017 CanLII 28627 (ON LTB), <https://canlii.ca/t/h3r25> below), the landlord moved into the unit for a few months and then moved back to the same matrimonial home. The tenant suspected that this was a ruse to evict the tenant from the outset, but the adjudicator found no bad faith in the change of circumstances after assessing the testimonies provided by the landlord and his wife / witness and some evidence.
"The Landlord’s Evidence
11. The Landlord and his spouse have been married for fourteen years and have two minor children. The Landlord testified that, when he served the N12 notice to the Tenant, he and his wife were having marital difficulties, which began around April 2015; they were “going through a rough patch” as the Landlord stated on more than one occasion. As well, the Landlord lost his job during the summer of 2015.
12. The Landlord eventually moved out of the matrimonial home and began living with friends. He sometimes picked up the children from school. On October 1, 2015, the Landlord rented a room, with a shared kitchen, in a house and began living there to “prevent arguments” between himself and his spouse in front of the children.
13. The Landlord lived in the room until April 29, 2016. Shortly thereafter he left Canada to visit family in the U.K. He returned to Canada on June 20, 2016 and, on July 3, 2016, he states that he moved into the unit. The Tenant had vacated the unit on June 30, 2016 pursuant to my order, issued in the Landlord’s application. The Landlord stated that he moved into the unit as the room he was renting was too small and the children did not visit him there.
14. The Landlord testified that he moved his belongings, including a queen size mattress, a futon, a boom box, cutlery and clothing, into the unit. He says that he resided in the unit, on a full-time basis, until late October 2016, at which time he missed his wife and children and his children missed him, so he decided to move back into his matrimonial home.
15. Coincidentally, around the same time, the Landlord learned, through a friend, that a couple was looking for a place to live and the Landlord rented the unit to them, effective November 1, 2016.
16. The Landlord denies that he served the N12 notice to the Tenant in bad faith. He states that his circumstances simply changed and he moved back in with his family in order to “save [his] marriage.”
17. SB is the Landlord’s wife and her viva voce testimony essentially corroborated all the central elements of the Landlord’s position. In particular, SB testified that the Landlord moved out of his family home in October 2015 and returned in October 2016. SB added that the marital issues began in April 2015 and intensified in June 2015. During the Landlord’s absence from their home, according to SB, “Things were getting a lot better. It made sense that he return due to the impact on the kids.”
18. SB further corroborated the Landlord’s testimony that he rented a room and, thereafter travelled to the UK to visit family. SB stated that the couple’s children did not visit the Landlord at the room he rented prior to moving into the unit. SB testified that when the Landlord returned to Canada he moved into the unit and he and SB “began getting along better.” SB also testified that, as at the date of the hearing, she and the Landlord remained together and living in the family home.
19. I found SB to be a credible witness. It was clear that she found it difficult testifying about her family’s private matters in an open hearing room. Nevertheless, her evidence was not shaken on cross-examination and was internally consistent and consistent with the remainder on the evidence before me—in particular, the Landlord’s testimony. Moreover, SB did not hesitate to make a statement against interest. When asked if she believes that her marriage was “salvageable in October 2015” SB testified that she had “no idea” and this was the first time that she and the Landlord were going through a separation and they were separating “for the wellbeing of the kids.”
The Legislation
20. Subsection 57(1)(a) of the Residential Tenancies Act, 2006 (the ‘Act’) states:
The Board may make an order described in subsection (3) if, on application by a former tenant of a rental unit, the Board determines that,
(a) the landlord gave a notice of termination under section 48 in bad faith, the former tenant vacated the rental unit as a result of the notice or as a result of an application to or order made by the Board based on the notice, and no person referred to in clause 48 (1) (a), (b), (c) or (d) occupied the rental unit within a reasonable time after the former tenant vacated the rental unit;
21. Clearly, subsection 57(1) (a) of the Act articulates a three-part test. In order to be successful in their T5 application the Tenants must establish all three of the requirements of subsection 57(1)(a) on a balance of probabilities. First, that the Landlord gave a notice of termination under section 48 of the Act (the N12 notice) in bad faith. Second, that the Tenants vacated the rental unit as a result of the N12 notice or a Board order based on the N12 notice. Third, that the Landlord did not move into the rental unit within a reasonable time after the Tenants vacated.
22. The determinative issue before me is whether the Landlord gave the Tenant the N12 notice of termination in bad faith. In other words, what was the intention of the Landlord when he gave the Tenant the N12 notice?
Analysis
23. Based on the totality of the evidence presented, I am unable to find, on a balance of probabilities, that the Landlord served the Tenant with the N12 notice in bad faith.
24. In considering landlord’s own use applications regarding whether a landlord (or a member of her/his family as described in the Act) genuinely intends to move into a rental unit, the Ontario Divisional Court in Beljinac v. Salter 2001 CanLII 40231 (ON SCDC), [2001] O.J. No. 2792 (Div. Ct.), referring to Justice Steele’s reasons in Feeney v. Noble (1994), 19, O.R. (3d) (Div. Ct.), observed that: “…the test of good faith is a genuine intention to occupy the premises and not the reasonableness of the landlord’s proposal.” Moreover, in Kennealy v. Dunne, the English Court of Appeal pronounced that a Landlord need only establish a bona fide wanted and immediate intention to occupy the premises as a residence.
[Notes (not in the ruling):
1.
"A landlord need not establish that his requirement of possession was reasonable, only that he bona fide wanted and genuinely had the immediate intention to occupy the premises as a residence." - Kennealy v. Dunne cited in McLean v. Mosher, 1992 CanLII 7625 (ON SC), <https://canlii.ca/t/g17dt>
2.
"As to the word "requires", defence counsel attempts to introduce such tests as need, lack of search for alternative accommodation, and availability of alternative accommodation.
Here I follow the definition of "requires" given by Stephenson L.J. in Kennealy et al. v. Dunne et al., [1977] 2 All E.R. 16 at pp. 23-4, as follows:
That leads me to the inescapable conclusion that "required" in Case 10 does not mean "reasonably" required: it means no more than bona fide wanted and genuinely intended to be occupied as a residence at once, or at any rate within a reasonable time, but so wanted and intended whether reasonably or unreasonably, even from the landlord's point of view.
As well, the words of Browne L.J. from the same case [p. 25]:
I am driven to the conclusion that "required" in Case 1 puts on the landlord the burden of proving no more than that he genuinely desires to have the house as a residence for himself or for the specified members of his family, and genuinely has the immediate intention of using it for that purpose if he does get possession." - Kennealy v. Dunne cited in Re Higgins and Mathot, 1983 CanLII 1781 (ON SC), <https://canlii.ca/t/g1bl0>]
25. In the application before me, this means that at the time the Landlord gave the N12 notice to the Tenant there must have been a genuine intention to move into the rental unit.
26. Here, the Landlord testified that, for the reasons already stated, that he moved out of his matrimonial home. He subsequently took up residence with friends and, later rented a room, with shared facilities, in house. Upon returning from the UK in late June 2016, the Landlord moved into the unit, just days after the Tenant vacated. He remained living in the unit, on a full time basis, until late October 2016, when he returned to his family home as his absence was having a negative impact on his minor children and his relationship with his wife was improving. The Landlord’s testimony was corroborated by a variety of documentary evidence, including his Ontario driver’s licence, bearing the unit’s address and issued in August 2016, his lease for the room he rented prior to moving into the unit, a letter from a paralegal firm stating that the Landlord discussed matrimonial issues with the firm during the material time, confirmation of his trip to the UK and a letter from his employer confirming that he was laid off in early July 2015, when he testified that his marital issues deteriorated.
27. I am giving no weight to a letter written by the Landlord to the Board, dated October 20, 2016, stating, in part, that he was vacating the unit and returning to his family home. The letter, which may or may not corroborate the Landlord’s initial good faith intention to move into the unit, is highly self-serving and, in my view, serves no purpose at all.
28. I am very conscious of the Tenant’s position concisely outlined in her application and alluded to during the hearing that the relationship between the parties was strained prior to the Landlord serving the N12 notice to the Tenant. However, subsection 57(1) (a) of the Act contains no reference to a landlord’s motivation in requiring vacant possession for a landlord or a family member. As well, previous cases before the Board and Divisional Court have made it clear that motive is not especially important as long as there is good faith intention.
29. I am also cognizant that the Tenant may have a very strong suspicion, indeed she may be firm in her conviction, that the Landlord did not have a good faith intention to move into the unit. In her application the Tenant states that the Landlord did not move into the unit at all and requests that I so find. However, based on the totality of the evidence presented, most of which has been outlined above, I am unable to make the findings of fact suggested by the Tenant. To do so would amount to a finding based on no evidence and/or speculation and conjecture and amount to a serious error of law. During cross-examination the Tenant was asked is she had any evidence that the Landlord did not occupy the unit and she testified, “No.”
30. As I stated above, I found the Landlord’s spouse to be a credible witness; her testimony corroborated the Landlord’s testimony and, further, the Landlord presented ample documentary evidence corroborating his version of events. I should also note that, in my view, and having heard similar cases in the past, the Landlord’s evidence is not as suspicious as it may appear to the Tenant. During a couple’s separation, circumstances may change and it is difficult to predict what will happen two or three, or more, months down the road. It is far from unusual for couples to separate, only to realize later that the wish to be together for the benefit of the children or otherwise.
31. I will also not draw an adverse inference from the increased rent charged to the new tenants of the unit. The Tenant acknowledged that, during the four years that she had possession of the unit, the Landlord only raised the rent twice. The Landlord also testified that the rent currently charged to the new tenants is “market rent”, which it likely is otherwise the unit would remain empty.
32. Lastly, the Tenant was provided with an unimpeded opportunity to cross-examine the Landlord and SB, yet these witnesses’ viva voce evidence was not shaken on cross-examination. The evidence of both witnesses, which was provided in a straightforward manner, was entirely consistent with each other, was internally consistent, and was not contradicted by any other reliable evidence before me. In the circumstances, I am obligated to apply the principle from Maldonado v. M.E.I., [1980] 2 F.C 302 (C.A.) at 305, that when a witness swears to the truth of certain allegations, a presumption is created that those allegations are true unless there are reasons to doubt their truthfulness. Accordingly, I accept the Landlord’s and SB’s testimony as true and that, as at the date when the Landlord served the Tenant with the N12 notice, he had a good faith intention to move into the unit.
33. For the foregoing reasons I find, on a balance of probabilities, that the Landlord did not give the N12 notice to the Tenant in bad faith, that he did move into the unit within a reasonable amount of time after the Tenant vacated and, as such, the Tenant’s application must be dismissed."
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An N12 was based on a conditional sale, the sale fell through, the property was later sold to a new purchaser but the same N12 was used for the L2 application. The L2 application was dismissed.
"KG (the 'Landlord') applied for an order to terminate the tenancy and evict Ronald Laframboise (the 'Tenant') because the Landlord has entered into an agreement of purchase and sale of the rental unit and the purchaser requires possession of the rental unit for the purpose of residential occupation. The Landlord also claimed compensation for each day the Tenant remained in the unit after the termination date.
This application was heard by videoconference on September 23, 2021 at 12:10 PM.
The Landlord, KG, the Landlord’s representative, Richard Bowers, the Landlord’s witness, HS, and the Tenant’s representative, Charmaine Spitzer, attended the hearing.
With the consent of all parties, the two matters CEL-00893-21 and CEL-00894-21 were heard together, as both relate to N12s served by the same landlord in relation to the same purchase agreement. The orders in both matters are substantively identical.
Determinations:
1. The Application is based on an N12 Notice of Termination served on the Tenant on May 17, 2021, with a termination date of July 31, 2021. The N12 indicates that a purchaser requires the rental unit for residential occupation.
2. In submissions for the hearing, the Landlord provided an agreement of purchase and sale dated June 13, 2021 (the “June Agreement”), nearly a month after the N12 was served, with a completion date of August 31, 2021. The agreement has since been extended to September 30, 2021, and will presumably be extended further.
3. At issue is the fact that the notice of termination relied upon by the Landlord was in served in relation to a previous purchase agreement. The Landlord’s realtor, HS, provided oral testimony that there was a previous agreement entered into with a different purchaser on May 2021 (the “May Agreement”). The N12 was served based on the intention of the purchaser in the May Agreement to occupy the rental unit. The May Agreement contained a condition for financing, which was never satisfied, and the May Agreement accordingly came to an end.
4. While a copy of the May Agreement was not provided as evidence or submissions, its content beyond the foregoing is immaterial, as it was uncontested that the purchaser in the May Agreement is not the purchaser in the June Agreement.
5. Based on the submissions put before me by the Tenant’s representative, I believe that there are two questions that must be addressed within this scenario to ascertain the validity of the notice that forms the basis of this application.
6. First, can a Landlord serve a notice of termination in a tenant under subsection 49(1) of the Residential Tenancies Act, 2006 (the “Act”) when an agreement of purchase and sale is conditional?
7. Second, if the first question is answered in the affirmative, can the Landlord continue to rely on a notice of termination given under subsection 49(1) of the Act if the agreement of purchase and sale is terminated and a subsequent agreement entered into?
Can a Landlord serve a notice of termination in a tenant under s. 49(1) when an agreement of purchase and sale is conditional?
8. Agreements of purchase and sale may contain conditions precedent in them. From the testimony of Mr. S, the May Agreement under which the N12 was given was conditional on the purchaser obtaining satisfactory mortgage financing. There is a general contractual principle known as a “condition precedent”, which is a contingency built into a contract that does not oblige one or more parties to perform the contract until a defined event has or has not happened. In the case of a financing condition, a purchaser expressly reserves the right to be relieved of their performance obligations under the contract if, within a defined period of time, they are not able to obtain a mortgage commitment that works for their financial situation. Such a contractual term is common, and indeed wise if it can be obtained, as it allows a defined escape route from the contract if it proves financially unworkable. Once the conditions in the agreement are removed or satisfied, the agreement is said to be “firm.”
9. The Tenant’s representative stated at the hearing that a Landlord cannot give notice under section 49(1) of the Act when the agreement is conditional. It would appear that this Board has in the past found that agreements that come before it while still conditional must be dismissed when there is uncertainty at the hearing that the sale transaction may be completed (see TSL-00881-18 (Re), 2019 CanLII 87153 (ON LTB)). This position is consistent with the contents of the Board’s Guideline 12: “The LTB may refuse an application if it is not reasonably certain that a completed sale will result from the agreement. If a term or condition of the agreement makes it uncertain that the deal will be completed, it may be appropriate to delay the application until the sale becomes more certain.” I accept that, when an application is before the board, if there is reasonable uncertainty on the face of the contract’s contingencies that the conveyance will be completed, the Board cannot grant an order of eviction. It does not flow from that principle that a notice cannot be given while the agreement is still conditional.
10. The contents of subsection 49(1) are key:
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…
11. The words “has entered into an agreement of purchase and sale” are not qualified in any way. There is no requirement that the agreement be firm, nor any provision that an agreement containing conditions or contingencies delays a landlord’s or purchaser’s right to proceed with a notice of termination for the purchaser’s own use. I do not believe that the Act can be seen as the source of a requirement that an unconditional agreement be a rigid pre-condition of a notice of termination under subsection 49(1).
12. Indeed, to require a contract free of contingencies as a precondition of a notice under subsection 49(1) would force this Board to engage in a level of enquiry well beyond its expertise. For example, the standard form of agreement that was used for the June Agreement contains the following language:
If within the specified times referred to in paragraph 8 any valid objection to title or to any outstanding work order or deficiency notice, or to the fact the said present use may not lawfully be continued, or that the principal building may not be insured against risk of fire is made in writing to Seller and which Seller is unable or unwilling to remove, remedy or satisfy or obtain insurance save and except against risk of fire (Title Insurance) in favour of the Buyer and any mortgagee, (with all related costs at the expense of the Seller), and which Buyer will not waive, this Agreement notwithstanding any intermediate acts or negotiations in respect of such objections, shall be at an end…
13. This language reserves a contingency between buyer and seller that, if a good title is not made out, or other contractual reservations not satisfied, the agreement may be terminated. If such a term is not incorporated into a contract for the sale of land, subsection 4(c) of the Vendors and Purchasers Act, R.S.O. 1990, c. V.2 imposes such a term in any such contract unless a contrary intention is expressed. Such a contingency is therefore endemic to agreements for the sale of land.
14. Were the Board forced to analyse every N12 to ascertain that the underlying agreement was free of contingencies when the notice was given, it would potentially be required to take and weigh evidence on the validity of potential title objections that might have been made on the date the notice was given. Similar enquiry would be needed on any other contractual contingency. The legal assessments of contractual validity and contingency that would arise from such a standard would take the Board well beyond its specific expertise of residential tenancies and into advanced areas of real property and conveyancing law.
15. It is more consistent with the plain language of subsection 49(1) to accept that the requirement for an agreement of purchase and sale under subsection 49(1) is satisfied by a valid agreement of purchase and sale, whether conditional or not. Such an interpretation is more in line with this Board’s specific expertise.
16. While the questions of an option to purchase is not before me, I would note (in what might be called “active obiter”) that the foregoing analysis is not intended to apply to an option, as in such transactions the right of conveyance is not triggered until the option is exercised (see TET-14624-11 (Re), 2011 CanLII 101409 (ON LTB)).
17. Having answered the first question in the affirmative, I must now turn to the second question noted above.
Can the Landlord continue to rely on a notice of termination given under s. 49(1) if the agreement of purchase and sale is terminated and a subsequent agreement entered into?
18. Giving nuance to the matter before me is that the Landlord has continued to rely upon the notice given on the strength of the May Agreement to support an application for personal use of the purchaser under the June Agreement. It is the Landlord’s position that a notice given on the May Agreement remains valid for the application before me, despite the application relating to the June Agreement.
19. One again comes back to the language of subsection 49(1), with different emphasis this time:
A landlord … 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…
20. The Act expressly acknowledges that an N12 notice is given on behalf of the purchaser. The notice served on May 17, 2021 was accordingly therefore given on behalf of the purchaser under the May Agreement, not on behalf of the purchaser under the June Agreement. As the N12 relates to the May Agreement, the good faith of the resulting application must therefore be looked at through the lens of the intention of the purchaser under the May Agreement.
21. Once the May Agreement failed to firm up, the N12 served in support of that agreement conceptually became a nullity, as there was no longer a genuine, good faith intention of that purchaser to occupy the rental unit. Likewise, it has become an absolute certainty, once the agreement terminates, that the agreement which gave rise to the notice of termination will not be completed. One either ground, the circumstances on which the notice was based have changed, rendering it moot.
22. That the June Agreement later came into being is immaterial, as the notice does not relate to that specific purchaser’s intentions.
23. To find otherwise would in my view allow a Landlord to continue to rely on a notice of termination that is at various times in its life cycle no longer in good faith. While I make no determination on the bona fides of the May Agreement, for the purpose of illustration I will assume it was indeed given in good faith. The notice given on behalf of its purchaser ceased to be supported by a good faith intention to occupy when that agreement came to an end. From that point until the June Agreement was signed, the notice was therefore no longer in compliance with the requirements of subsection 49(1). It seems absurd to allow a subsequent event (namely, entry into the June Agreement) to cure a notice of termination that has become non-compliant with the requirements of the Act. Once the notice of termination ceased to be compliant with the Act, I believe it must be seen as a nullity.
24. Relying on the notice served on May 17, 2021 in an application made in support of the June Agreement is accordingly a defect in the application, rendering it invalid, as the purchaser on whose behalf it was served no longer has a good faith intention to occupy the rental unit.
25. Once the June Agreement was entered into, the proper course for the Landlord would have been to serve a new N12 notice on behalf of the purchaser in the June Agreement, and apply to the Board on the strength of that notice of termination.
Summary
26. In consequence, three points come from the foregoing:
(a) A Landlord may, on behalf of a purchaser, serve a valid notice under section 49 of the Act immediately upon entering into an agreement of purchase and sale that contains conditions or contingencies that may result in the contract terminating before completion.
(b) If that agreement comes to an end before completion, the Landlord may no longer rely on the pre-existing N12 in support of its L2 application.
(c) If another agreement comes into being after the first agreement terminates, the Landlord should serve a fresh N12 on the basis of the new agreement, and make a fresh L2 application.
Costs
27. The Tenant’s representative asked that I award costs, as she argued the application was brought in bad faith. While the foregoing analysis in support of dismissal would support a technical conclusion that the application before the Board cannot support a finding of good faith intention to occupy based on the notice of termination on which it relies, I must note that I do not find that there was any unreasonable conduct by the Landlord or its representative. I come to this conclusion based on the esoteric nature of the defect in the application, and note that even with a recess both representatives struggled to find any case law to support their respective positions. I do not believe this an appropriate scenario to award costs.
It is ordered that:
1. The Landlord's application is dismissed."
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"[...] [7] On May 22, 2018, almost 11 weeks after the N12 was served and 10 days before closing, the Sellers were notified by the Purchasers’ lawyer that title to the residence would be taken by a corporation, Embleton Homes, Inc. The directors of this corporation are the Purchasers as well as the Respondents Malwinder Saini, and Sukhwinder Singh.
[...]
[13] The Member found that the Tenants had not established bad faith by the Sellers/landlords. The Member accepted that the Sellers/landlords served the N12 based upon the provisions of the APS requiring vacant possession of the rental unit for residential use by a family member of the Purchasers’ family. He found that the even though the Purchaser's son did not immediately take possession or continue to live in the rental unit, that did not mean that the N12 Notice, when it was served, was given by the Sellers/landlords in bad faith. He relied on the landlord’s evidence that when the landlords served the N12 notice, there was no reason to disbelieve the Purchasers' stated intention for use of the unit.
[...]
Issue 1: The T5 Decision
[21] The issue is whether the Member erred in law in dismissing the Appellants’ T5 claim on the ground that they had failed to establish that the Sellers issued the N12 notice in bad faith.
[22] The Member articulated and applied the three-part test set out in s. 57(1)(b) of the RTA. He held that the Tenant must establish all three of the following on a balance of probabilities:
First, that the landlord gave a notice of termination under section 49 of the RTA (the N12 notice) in bad faith;
Second, that the Tenants vacated the rental unit as a result of the (N12) notice or a Board order based on the (N12) notice;
Third, that the Purchaser did not move into the rental unit within a reasonable time after the Tenants vacated.
[23] The Member held that the first part of the test under s. 57(1)(b) requires a consideration of the landlord’s intention when the N12 is given. The change of purchasers under the APS and the title direction took place well after the N12 was given.
[24] The Sellers argue that the Appellants have not raised a question of law on the T5 issue. Rather, at best, what the Appellants argue are mixed questions of fact and law. Further, whatever the intention of the Purchasers, the inquiry under section 57(1)(b) of the RTA was the intention of the Sellers acting as the landlord under the RTA. When the N12 was provided to the Appellants, the Sellers had an APS for the property with people rather than a corporation. The APS had a clause requiring vacant possession so the Purchasers’ family could move in. There was no evidence before the LTB that the Sellers had colluded or were acting on information that would have allowed a finding of bad faith to be made against them when they issued the N12. Their evidence was that at the time of service, they had no reason to disbelieve the Purchasers’ stated intention that vacant possession was required for a family member to occupy the rental unit.
[25] The Appellants argue that the N12 was given in bad faith, as title to the residence was ultimately placed in the name of a corporation, and a corporation cannot personally occupy residential premises. Also, after closing, and after the Appellants vacated the residence, it remained vacant for five months. It was then only occupied for a short time by a relative of one of the directors of the corporate owners. Also, the evidence shows that the Purchasers desired to obtain income from the property. The Appellants submit this permits an inference to be drawn that there was never a genuine intention by the Purchasers to occupy the residence. The Appellants argue the Member ignored the evidence about how the title to the property came to be in the name of a corporation, and that the Purchasers were vague about their intentions for the use of the residence and ultimately what happened to the property. The Appellants assert these facts should have caused the Member to infer that the N12 was given in bad faith.
[26] I do not agree with the Appellants’ argument that the failure of the Board to infer bad faith amounted to an error of law. An appellate court is prohibited from reviewing a lower court or tribunal finding of fact if there was some evidence upon which the decision-maker could have relied to reach that conclusion: Housen v. Nikolaisen, 2002 SCC 33, at para. 1. This principle extends to inferences of fact: General Motors v. Johnson, 2013 ONCA 502, at para. 51. In declining to make the inferences urged by the Appellants, the Member wrote that he had considered all the evidence. There was evidence upon which he could make the finding that he did.
[27] The Appellants also argue that the Member erred in law in restricting his consideration of bad faith to the Seller’s knowledge at the time the notice of termination was given. In support of that argument, Ms. Elkins cited an LTB case - File No. TST-94914-18, 2019 LNONLTB 592 – in which the Board held that the landlord’s duty of good faith extends beyond the time the notice of termination is served. This was the additional issue referred to earlier upon which the parties were invited to make written submissions. Contrary to the submissions of the Respondents, this was not an issue of the panel “going in search of a wrong to right”. It was a circumstance of being alive to an issue raised during the submissions of self-represented individuals and following that issue to a place where logic dictated. TST-94914-18 was not referred to at the Board hearing in the present case – it was under reserve at the time.
[28] In TST-94914-18, Member Solomon held that the landlord’s duty of good faith extends beyond the time the notice of termination is served and found bad faith on the part of the landlord:
22. In many other cases, the Board has found that an unforeseen change in circumstances that results in the person listed in the N12 Notice being unable to occupy the rental unit does not constitute bad faith (see, for example, TST-66921-15, TST-87559-17, TST-80046-16). I agree that this is a case where an unforeseen change of circumstances resulted in CM failing to take occupancy of the rental unit. This change of circumstances was the agreement of purchase and sale falling through. I am satisfied that the Landlords did not foresee this happening when they served the N12 Notice.
23. However, I also agree with the following statement from the Board’s order TST-87742-17-RV, which the landlord submitted: “the Landlord’s obligation to act in good faith extends beyond the time the notice of termination is served”. I take this statement to mean that bad faith is not confined to the moment in time when a landlord gives a tenant an N12 Notice. I find that bad faith can extend to the period between when the N12 Notice was given, and the time when a tenant moves out.
[29] The Appellants characterize the issue as a “bad faith period” and argue that the LTB must consider the sellers’ faith (good or bad) up to the time a tenant vacates. The Sellers countered this argument by submitting several decisions of the LTB which the Board held that only the circumstances at the actual time the N12 is delivered are to be considered.
[30] In my view, TST-94914-18 should be restricted to its own unique facts. In that case, prior to the date the sale of the property was to close, the landlords obtained an eviction order based upon their N12 notice of termination. The tenants appealed the order and obtained a stay from the Divisional Court. As a result of the stay, the landlord was unable to complete the sale on the date set for closing. At some point following the aborted closing, the purchaser advised that landlord he could not complete the sale because he no longer qualified for the same mortgage rate. With knowledge that the sale of the rental unit would not be completed, the landlords asked the sheriff to enforce the writ of possession (the Divisional Court stay had been lifted as a result of the tenants failing to comply with conditions of the stay). The landlord then relisted and sold the rental unit to another buyer.
[31] The Board found that the landlords had not acted in bad faith when they served the N12 notice of termination. The Member accepted that at the time notice was given, the landlord genuinely believed that the purchaser would move into the rental unit following closing. However, she found that the landlords acted in bad faith when they asked the sheriff to enforce the Board’s eviction order knowing that there was no prospect of the sale closing.
[32] In the present case, the sale of the rental unit was alive at the time the Appellants moved out. The Sellers could not have been expected to refuse to close or to get into a dispute with the Purchasers with the potential of litigation. I am therefore unable to accept the Appellant’s argument based upon the decision in TST-94914-18.
[33] The decision on the T5 application focused on findings of fact and the application of a statutory test to the facts as found. Those determinations are ones which members of this specialized tribunal are asked to make regularly. There is no error of law in the Member’s determination that there was no bad faith on the part of the Sellers in giving the Appellants the N12 on March 7, 2018. I would therefore dismiss the appeal of the LTB’sdecision on the T5 application. [...]"
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"34. Even if I find that the Landlord did not ask for the unit back to charge rent at a higher price, I do not find that the Landlord intended to reside there for at least 12 months. The Landlord’s evidence was that after the Tenants vacated, she moved into the unit on April 1, 2019 and resided there for two months. Although the Landlord submits that there was a change in circumstance that required her to vacate the unit early, she did not submit sufficient evidence regarding this change. The Landlord did not submit any documentation showing that she was required to return to the UK in June 2019. I also find it unlikely that the Landlord was not aware that she had to return to the UK in advance of her giving the Tenants the notice to terminate, as her evidence was that she is required to renew her UK license every two years. On a balance of probabilities, I find that the Landlord knew or ought to have known that she would be required to go back to the UK within the twelve-month period she was in possession of the unit."
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"18. The Landlord testified that he served the N12 notice because his daughter had just got a job close to the location of the rental unit. A few weeks after he served the N12 notice, his daughter got a different job elsewhere and no longer required the rental unit. The Landlord did not, at any time, tell the Tenants that his daughter no longer required the rental unit and he did not serve any new notices of termination.
19. Based on the uncontested facts, I am satisfied, on a balance of probabilities that the Tenants vacated the unit because they received the N12 notice and that the Landlord served the N12 notice in bad faith. The Landlord’s legal representative submitted that the Tenants should have been aware that the Landlord no longer required the unit for his daughter because the Landlord sent a message in June 2018 indicating that he is selling the unit. However, the Landlord made no clear statement to the Tenants about the N12 notice. Having served the N12 notice and not having rescinded it, the Landlord cannot say that it was not effective as a reason to vacate the unit. From the Tenants’ perspective, they received a notice of termination and the Landlord consistently pursued vacant possession until they vacated. As for bad faith, the Landlord testified that he had changed his mind about requiring the unit for his daughter a few weeks after serving the N12 notice. From that moment onward, he no longer, in good faith, required the unit for his daughter’s residential use. His intention changed while the Tenants were still in possession of the unit and were indicating to him that they did not want to vacate. His continued insistence that they vacate the unit, without rescinding the N12 notice, is an indication of his bad faith."
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"No bad faith
7. The Tenant’s position appears to be that the Landlord’s son never intended to move into the rental unit and never actually moved in. The Tenant testified that she believes that the Landlord evicted her only in response to her asking for a replacement remote for the garage. The Tenant also testified that she believes that the Landlord’s son never moved into the residential complex because one of her former neighbours from the residential complex told her that in January, 2019 they spoke to a couple who was living in the rental unit and the couple advised that they were moving out in six weeks.
8. On the other hand, the Landlord testified that his son did move into the rental unit, albeit later than initially planned, and it was always his son’s intention to do so. The Landlord testified that at the time he gave the Tenant the N12 Notice, his son was living in Los Angeles working on a project to renovate and sell a house. The Landlord testified that his son was intending to move back to Toronto and into the rental unit when the real estate project was complete, which was expected to be a couple months after the N12 Notice was given. The Landlord testified that his son’s project was unexpectedly delayed due to problems with building inspections and permits. The Landlord testified that on the day he became aware that his son would not be moving back as planned, he notified the Tenant that she could stay in the unit. The Landlord testified that after the Tenant moved out, the rental unit sat vacant for a few months until the Landlord entered into a short-term lease with other tenants for the period of August, 2018 to January, 2019 to help cover the carrying costs for the unit. The Landlord testified that his son’s project in LA wrapped up in September, 2018 and his son moved back to Toronto in November, 2018. The Landlord testified that his son moved into the rental unit on February 1, 2019, right after the short-term tenancy ended. The Landlord testified that his son continues to live in the rental unit.
9. Based on the evidence before me, I prefer the Landlord’s version for what transpired before and after the N12 was served because it is supported by the documentary evidence, including the Landlord’s email to the Tenant, which advised that she could continue to live in the rental unit and the driver’s licence belonging to the Landlord’s son, issued in January, 2019, which indicates that his address is that of the rental unit. In addition, the Landlord was consistent in his reason for eviction throughout his communications with the Tenant. Since February 14, 2018, when the parties were discussing the matter in emails, the Landlord provided a singular reason for wanting vacant possession of the rental unit – so his son could move in. The Landlord’s words and actions do not indicate me to that he had an ulterior reason for wanting the Tenant to move out.
10. On the other hand, the Tenant’s version of what happened was not supported by the surrounding evidence. The Tenant’s assertion that the Landlord was only trying to evict her because she requested a replacement remote is not consistent with the parties’ correspondence about the remote. In those emails, the Landlord offers to pay for a replacement remote and does not seem to have any issue with the request. In addition, the Tenant’s claim that her former neighbour told her that there was a couple living in the rental unit in January, 2019 is consistent with the Landlord’s evidence to the extent that there were short-term tenants living in the rental unit at the time. The Tenant also claims that she was also told that the couple was moving out six weeks later (i.e. in February or March, 2019) but I place little weight on this claim because it is hearsay evidence and the Tenant’s former neighbours did not testify at the hearing to provide direct testimony and context for their statement. In addition, the Tenant acknowledged, in her testimony on March 11, 2019, that she did not know who was living in the rental unit at that time.
11. Ultimately, I am satisfied on a balance of probabilities that the Landlord’s son was intending to move into the rental unit at the time the N12 Notice was served and the only reason he did not move in around the termination date in the N12 Notice was due to an unexpected change in circumstances involving his real estate project in LA. I am satisfied that the Landlord’s son did ultimately move into the rental unit when his circumstances changed again and allowed for this to happen. In other words, I find that the Landlord’s son had a good faith intention to occupy the rental unit at the time the N12 Notice was served to the Tenant; however, after serving the N12 Notice, there was a change of circumstances that delayed his son’s move-in date.
12. The change in circumstances and the timing of events had unfortunate consequences for the Tenant because she quickly found a new place to live after receiving the N12 Notice. She also proceeded to move out of the rental unit even after the Landlord advised (before the termination date in the N12 Notice) that she could continue to stay in the unit. This no doubt caused the Tenant inconvenience and expense but the way things unfolded was not anyone’s fault and the facts do not support a finding that the Landlord served the N12 Notice in bad faith. The Board has repeatedly found that an unforeseen change in circumstance that prevents the person listed in the N12 Notice from taking possession does not constitute bad faith (see TST-66921-15, TST-80046-16 and TST-87742-17-RV).
13. Since I am not satisfied on a balance of probabilities that the Landlord gave the N12 Notice in bad faith, I find that the test in section 57 of the Act has not been made out and the application must be dismissed."
As these T5-based LTB rulings hopefully show, it gets very case-specific, and both parties should get legal advice for their specific case.
To find out more:
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