N12 and Conversion to Condominium (RTA Section 51)

 

RTA section 51 specifies when an N12 cannot be used in situations of conversion to condominium.

The simplified flow chart and the LTB rulings below can help with examples.

1. 1. RTA section 51
2. 2. Flow chart
3. 3. Examples of LTB rulings

I. RTA SECTION 51:

"Conversion to condominium, security of tenure

51 (1) If a part or all of a residential complex becomes subject to a registered declaration and description under the Condominium Act, 1998 or a predecessor of that Act on or after June 17, 1998, a landlord may not give a notice under section 48 or 49 to a person who was a tenant of a rental unit when it became subject to the registered declaration and description.  2006, c. 17, s. 51 (1).

PROPOSED UNITS, SECURITY OF TENURE

(2) If a landlord has entered into an agreement of purchase and sale of a rental unit that is a proposed unit under the Condominium Act, 1998 or a predecessor of that Act, a landlord may not give a notice under section 48 or 49 to the tenant of the rental unit who was the tenant on the date the agreement of purchase and sale was entered into.  2006, c. 17, s. 51 (2).

NON-APPLICATION

(3) Subsections (1) and (2) do not apply with respect to a residential complex if no rental unit in the complex was rented before July 10, 1986 and all or part of the complex becomes subject to a registered declaration and description under the Condominium Act, 1998 or a predecessor of that Act before the day that is two years after the day on which the first rental unit in the complex was first rented.  2006, c. 17, s. 51 (3).

ASSIGNEE OF TENANT NOT INCLUDED

(4) Despite subsection 95 (8), a reference to a tenant in subsection (1), (2) or (5) does not include a person to whom the tenant subsequently assigns the rental unit.  2006, c. 17, s. 51 (4).

CONVERSION TO CONDOMINIUM, RIGHT OF FIRST REFUSAL

(5) If a landlord receives an acceptable offer to purchase a condominium unit converted from rented residential premises and still occupied by a tenant who was a tenant on the date of the registration referred to in subsection (1) or an acceptable offer to purchase a rental unit intended to be converted to a condominium unit, the tenant has a right of first refusal to purchase the unit at the price and subject to the terms and conditions in the offer.  2006, c. 17, s. 51 (5).

SAME

(6) The landlord shall give the tenant at least 72 hours notice of the offer to purchase the unit before accepting the offer.  2006, c. 17, s. 51 (6).

EXCEPTION

(7) Subsection (5) does not apply when,

(a) the offer to purchase is an offer to purchase more than one unit; or

(b) the unit has been previously purchased since that registration, but not together with any other units.  2006, c. 17, s. 51 (7)."

https://www.ontario.ca/laws/statute/06r17#BK72

II. FLOW CHART (N12 in conversion to condo context):

III. LTB EXAMPLES:

1) SWL-01548-17 (Re), 2017 CanLII 48417 (ON LTB), <https://canlii.ca/t/h5332>

"[...]

Evidence:

3. The Tenant testified that she use to walk by the building when she was a child going to school and that it was a residential rental complex back then. That was over 40 years ago.  She said that she moved into the rental unit prior to the property being converted to condominiums in 2001 and was told by the previous Landlord that she had right of tenure under section 51.  The unit was sold to the current Landlord in 2014 and when she received the N12 Notice she told the Landlord that she thought section 51 applied to her.

4. The Landlord testified that she offered the Tenant the first right of refusal, but the Tenant didn’t want to purchase the unit.  The Landlord did not dispute that the property had been used as residential rentals since the Tenant was a child.

Analysis:

5. The Tenant is a person who was a tenant of a rental unit when it became subject to the registered declaration and description.  The Tenant had moved into the rental unit prior to the conversion of the rental unit into a condominium unit in 2001. Thus the tenancy falls within the scope of section 51(1) of the Act. Therefore the Landlord cannot serve the Tenant with a notice of termination under sections 48 or 49 of the Act for the Landlord’s own use or Purchaser’s own use.

6. However the exemption to section 51(1)of the Act must also be considered. That section provides that if no rental unit was rented before July 10, 1986 then section 51(1) does not apply.  In this case the rental unit was rented prior to July 10, 1986 because the Tenant testified that the property was a rental housing complex when she was a child going to school 40 years ago.   Without any evidence to the contrary I find that section 51(1) applies and the Landlord is not entitled to seve the Tenant with a N12 Notice to terminate the tenancy for purchaser’s own use and the application must be dismissed.

It is ordered that:

1. The Landlord’s application is dismissed.

[...]"

2) CEL-76563-18 (Re), 2018 CanLII 88413 (ON LTB), <https://canlii.ca/t/hv7fx>

"[...]

2. It was uncontested that the Tenants’ tenancy commenced on September 1, 2003.  According to the Tenants, the rental unit was converted to a condominium in July 2004.  It was uncontested that a conversion to condominiums took place at this residential complex. Therefore, the Tenants submit that the Landlord was not entitled to serve a notice under section 48 of the Act.

3. The Landlord is the recent purchaser of the rental unit.  She purchased the unit with the intention at some point for her son to move into the unit. The Landlord submitted that she was not aware that the Tenants she inherited with this unit were subject to subsection 51(1) of the Act. She was simply told they were month-to-month Tenants.

4. The Tenants submitted that they were aware that the unit was for sale and posted notice in the unit regarding their tenancy and subsection 51(1) of the Act.  There was no dispute that the Landlord never viewed the unit.

5. Given that there was no dispute the Tenants were occupying the rental unit when the conversation to a condominium took place back in 2004, I am satisfied that in accordance with subsection 51(1) of the Act, the Landlord was not entitled to serve a notice of termination pursuant to section 48 of the Act.   Consequently, the application is dismissed.

[...]"

Disclaimer:

You should not act or rely on any information provided in this blog. It is not legal advice, and the content is provided for general discussion and general information purposes only and to help encourage further research. To ensure your interests are protected, retain or formally seek legal advice from a licensed legal professional.

Never disclose details about your specific legal matters outside of situations when you have established solicitor-client relationship with a qualified legal professional. By using this blog, you acknowledge and accept this warning and agree to waive all liability for use of any information contained in this blog.

Refused stay of an N12-based eviction order pending leave to appeal (Pannone v. Peacock, 2022 ONCA 520)

 

An interesting recent decision from the Court of Appeal for Ontario where the court dismissed the tenant's motion to stay an order and refused to exercise its discretion to transfer the matter to the Divisional Court because of prejudice to the landlord.

Context: the landlord's previous real estate deal (which was the basis for the N12 eviction) fell through, and the landlord entered into a new agreement of purchase and sale.

The ruling provides a brief overview of case law on the test on a motion for a stay pending appeal or leave to appeal.

Pannone v. Peacock, 2022 ONCA 520 (https://www.ontariocourts.ca/decisions/2022/2022ONCA0520.htm)

"... [7] On a motion brought by the landlord, a single judge of the Divisional Court quashed the tenants' appeal and ordered them to vacate by June 28, 2022, failing which the eviction could proceed. Evidence filed by the landlord immediately prior to the motion to quash (the “new evidence”) indicated the landlord's original sale had been terminated as of May 13, 2022 because the tenants had failed to vacate and the purchasers were unable to continue to wait for the premises. The new evidence also indicated the landlord had subsequently resold the property with a closing date of July 20, 2022 at a price $30,000 less than the original sale. The single judge concluded such evidence was irrelevant for the purposes of the motion to quash. In her view, the issues raised on the appeal were either not questions of law or lacking in merit. She also found the appeal was an abuse of process as it was a means of taking advantage of the automatic stay of the Board’s order upon filing a notice of appeal and of avoiding paying rent. Pursuant to the terms of the single judge’s order, the eviction is currently scheduled for July 6, 2022.

[8] The test on a motion for a stay pending appeal or leave to appeal is well‑established:

i. Is there a serious question to be determined on appeal;

ii. Will the moving party suffer irreparable harm if the stay is not granted; and

iii. Does the balance of convenience favour granting a stay?

The components of the test are not water-tight compartments, the strength of one component may compensate for weakness in another. The overarching consideration is whether a stay is in the interests of justice. See: RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at p. 334; Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), at p. 677; BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, at para. 16.

[9] Although the serious issue to be determined component is a low threshold, I conclude it cannot be met in this case and that a stay should not be granted for that reason alone.

[10] Under s. 21(5) of the CJA, a panel of the Divisional Court may, on motion, set aside or vary the decision of a judge who hears and determines a motion to that court.

[11] This court has consistently held that the proper procedure for setting aside or varying the decision of a single judge of the Divisional Court is by way of a motion to a panel of the Divisional Court under s. 21(5) of the CJA and that parties must proceed by that route before coming to the Court of Appeal: Bernard Property Maintenance, at para. 2; Overseas Missionary Fellowship v. 578369 Ontario Ltd. (1990), 73 O.R. (2d) 73 (C.A.), at p. 75. See also Coote v. Ontario (Human Rights Commission), 2010 ONCA 580, at para. 2; Alliance to Protect Prince Edward County v. wpd White Pines Inc., 2018 ONCA 576, at para. 13.

[12] In the absence of authority to the contrary, my view is that Ms. Rodger's appeal route is by way of review motion to a panel of the Divisional Court under s. 21(5) of the CJA.

[13] Although I cannot as a single judge finally determine whether this court has jurisdiction to entertain Ms. Rodger's leave motion, my view that the proper appeal route is by way of review motion to the Divisional Court militates against granting a stay. If this court has no jurisdiction to entertain the leave motion, the leave motion is without merit and it would be contrary to the interests of justice to grant a stay: see, for example, Fontaine v. Canada (Attorney General), 2018 ONCA 749, at para. 5.

[14] I recognize that in Bernard Property Maintenance, on consent of the parties and with the assent of the Chief Justice of the Superior Court of Justice, this court reconstituted itself as a panel of the Divisional Court to hear and determine an appeal that should have proceeded to the Divisional Court under s. 21(5) of the CJA. However, this court did so only because of the unusual circumstances that this court had granted leave to appeal, a stay of the order below, and an extension of time.

[15] Given that the jurisdictional issue has now been flagged, I see no prospect that leave to appeal would be granted in this case.

[16] Turning to Ms. Rodgers' request that I transfer these matters to the Divisional Court, s. 110 of the CJA provides me with discretion to transfer the proceedings rather than requiring Ms. Rodgers to recommence proceedings in the Divisional Court if so advised. Relevant considerations concerning the exercise of such discretion include:

· the merits of the proposed appeal or application; and

· whether the respondent will suffer undue prejudice as a result of further delay waiting for the matter to be heard: Bernard v. Fuhgeh, 2020 ONCA 529, at para. 15.

[17] The landlord opposes the transfer request contending that there is no merit in the proposed panel review and that he will suffer prejudice due to several factors, including the following:

· the tenants continuing failure to pay rent (the single judge determined rental arrears amounted to $9,200 as of June 16, 2022);

· the fact that his original real estate transaction was terminated because of the tenants' persistent refusal to vacate despite the eviction order; and

· further delay may jeopardize the new sale scheduled to close on July 20, 2022.

[18] While I agree that many of the issues Ms. Rodgers raises on her leave application have no merit, in my view, she has raised a question of law in her stay motion concerning the new evidence that has at least some arguable merit.

[19] In particular, Ms. Rodgers submits that because the landlord's original notice of termination under s. 49 of the RTA was given on behalf of the purchasers under the landlord's original agreement of purchase and sale that was subsequently terminated, the eviction order that was made in reliance on that notice of termination should be set aside or treated as having no force and effect. She submits that on a plain reading of s. 49, the notice of termination is given on behalf of the purchaser and cannot be used by the landlord to "bridge" to a new purchaser.

[20] Ms. Rodgers relies on Gill v. Laframboise, Board file CEL-00894-21, in support of her position. However, in that case, the landlord was applying for an eviction order based on a notice of termination served on behalf of a purchaser under an agreement of purchase and sale that had been terminated and had not served a termination notice on behalf of the purchaser under a new agreement for sale the landlord had made. The Board declined to make the eviction order sought based on the original notice of termination. In this case, the landlord obtained an eviction order but was unable to complete his original transaction because of the tenants' failure to vacate. The landlord argues that the RTA should not be interpreted in such a way as to allow tenants to frustrate landlords' ability to sell their property. The eviction order once obtained should not be set aside where the landlord was unable to complete a sale transaction due to the actions of the tenant.

[21] Counsel for the Landlord and Tenant Board who attended this proceeding was not aware of any other authority addressing the issue.

[22] Although I agree that the question of law Ms. Rodgers has raised has at least some arguable merit, I decline to exercise my discretion to transfer her motions.

[23] In my view, there is also merit in the landlord's argument. Moreover, the landlord has already suffered considerable prejudice through the actions of the tenants in that he lost the benefit of his original sale agreement through their failure to comply with the original eviction order and the tenants have continued to occupy the premises without paying rent. When asked, Ms. Rodgers did not offer any terms that would minimize the prejudice the landlord is continuing to suffer by her continued occupation of the premises. There is no evidence before me concerning whether the tenants have secured other premises. Taking account of all the circumstances, I conclude that it should be for Ms. Rodgers to take whatever steps she deems advisable to bring proceedings in the proper forum to either attempt to halt the eviction or pursue other remedies that she may have.

..."

More: Timing of Bad Faith / Is the good faith requirement limited only to the time when the N12 is given?

Disclaimer:

You should not act or rely on any information provided in this blog. It is not legal advice, and the content is provided for general discussion and general information purposes only and to help encourage further research. To ensure your interests are protected, retain or formally seek legal advice from a licensed legal professional.

Never disclose details about your specific legal matters outside of situations when you have established solicitor-client relationship with a qualified legal professional. By using this blog, you acknowledge and accept this warning and agree to waive all liability for use of any information contained in this blog.

Case on shared bathroom / kitchen with the owner (McKnight v. Kirk, 2022)

 

Helpful recent Divisional Court ruling for checking RTA ss. 5(i), i.e. questions on applicability of the Act in situations of shared bathroom / kitchen:

McKnight v. Kirk, 2022 ONSC 3617 (CanLII), <https://canlii.ca/t/jqbll>

The ruling elaborates on the test in Div. Ct. ruling in Cowie v. Bindlish, 2010, provides an overview of some LTB rulings applying the test from Cowie (at para. 24 - 26) and further explains that "based on the express words of s. 5(i), the question is not whether the family member is “required to share” with the tenants, but whether the tenants are required to share the facilities with the family member." (at para. 29)

The ruling also clarifies that subsequent sale (after the tenant was evicted) is irrelevant for determinations about applicability of the Act (at para. 37) and that there is no statutory requirement to inform the tenant that the RTA does not apply (i.e. RTA subsection 5.1(3)1 does not apply to RTA ss. 5(i)) (at para. 41).

For more information on this topic, please see previous posts:

1)

Shared bathroom / kitchen - When does the RTA apply?

2)

Cowie v. Bindlish 11 Years Later

__________________

McKnight v. Kirk, 2022 ONSC 3617 (CanLII), <https://canlii.ca/t/jqbll>

" [...]

[22]           This court considered the proper interpretation of s. 5(i) in Cowie v. Bindlish, 2010 ONSC 2628 (Div. Ct.), and stated as follows:

17        Any interpretation of section 5 (i) of the Act that would permit the respondent to unilaterally cause the board to be deprived of its jurisdiction to hear the appellant’s application by forming an intention in her own mind without communicating it to the appellant or by moving into the house at a later time would be contrary to the language of the section and the intention of the Legislature and would be grossly unfair. It would also effectively result in an unwarranted revision of the tenancy agreement that the parties had made.

18        Any such interpretation would also, in my view, be inconsistent with the objectives of the Act as reflected in sections 1 and 3 (1) of the Act.

[23]           The Tenant submits that the Member failed to explain why she departed from Cowie v. Bindlish and LTB decisions that have subsequently found that the Board must examine the circumstances throughout the tenancy to determine whether the RTA began to apply at a later point in time.

[24]           In SWL-17145-18, 2018 CanLII 88667 (ON LTB), the landlord and tenant initially shared the kitchen and bathroom, until the landlord moved to a new residence with his spouse and baby. The LTB found that the RTA applied from the date the landlord vacated the premises. The LTB found that, while the landlord’s departure was a unilateral action that would affect the tenancy, its finding was nonetheless consistent with this court’s holding in Cowie v. Bindlish because the unilateral act would cause the RTA to apply, rather than to cause the RTA to cease to apply.

[25]           In TET-87517-18-IN, 2018 CanLII 42846 (ON LTB), the LTB found that the landlord actually resided in a separate unit and “staged” his living situation to evade the application of the RTA.

[26]           In TET-79055-17-RV, 2017 CanLII 60359 (ON LTB), the LTB found that the s. 5(i) exemption applied because it was clear at the outset of the tenancy that the landlord’s daughter would be moving into the premises and that the kitchen and bathroom would be shared. The daughter’s delay in moving in did not cause the RTA to apply.[1]

[27]           In our view, the Decision was not a departure from the relevant authorities. What the above cases demonstrate is that the application of the s. 5(i) exemption very much turns on the facts in evidence before the LTB in a particular case.

[28]           In the Decision, the Member applied this court’s interpretation of s. 5(i) in Cowie v. Bindlish and correctly held that the relevant time period for assessing the application of the s. 5(i) exemption was at the outset of the Tenant’s occupancy, in July 2019. As detailed further below, she also considered whether the circumstances changed when J. left the premises to attend school. This demonstrates that the Member did not only consider the circumstances at the outset of the Tenant’s occupancy, but was alive to the potential that the RTA could have applied at a later stage.

[29]           In addition, the Member properly interpreted the terms “lives in the building” and “required to share.” The Tenant argues that J. was not “required to share” the bathroom and kitchen with the tenants because she was able to use the bathroom and kitchen in the owner’s first floor unit. However, based on the express words of s. 5(i), the question is not whether the family member is “required to share” with the tenants, but whether the tenants are required to share the facilities with the family member. There was evidence before the LTB that while J. used the first-floor bathroom to shower, she regularly used the second-floor bathroom, kitchen and laundry facilities. The tenants had no alternative facilities and were therefore required to share with J.

[30]           Contrary to the Tenant’s submissions, there was evidence before the LTB to support the Member’s finding that J. continued to live in the third-floor room, even after she left for school in September 2019. J. testified that she left her clothing and bed behind and returned every other weekend and stayed in the third-floor room. In March 2020, she stayed with her grandmother for some period of time but eventually returned to the premises. The third-floor room was periodically rented to other tenants, and during those times, she stayed with her mother or in a room on the second floor. The Member found that the Landlord always ensured that J. had a room in one of the upstairs rooms. Moreover, the Tenant knew when he moved in that the Landlord’s daughter, J., lived on the third floor. In making her findings, the Member did not ignore the evidence or make a finding that was not available on the evidence before her and no error of law arises.

[31]           Based on the foregoing, the circumstances in which a factual matter may give rise to an error of law do not arise in this case. 

Did the Member Err in Interpreting Section 5(i) by Failing to Consider that the Premises was Co-Owned by the Landlord’s Mother?

[32]           The Tenant submitted that the exemption did not apply because the Landlord co-owned the property with her mother, Mary Louise Kirk, and that J. was thus not a “spouse, child or parent” of the owner, as required under s. 5(i).

[33]           The Member considered the use of the term “owner” in s. 5(i) and the absence of a definition of “owner” in the RTA. The Member found that “landlord” under the RTA is defined more broadly than an owner. The Member adopted a contextual and purposive interpretation of the provision to find that interpreting the term “owner” to apply only to a sole owner would defeat the purpose of the exemption, which was to allow a balance between the rights of a tenant with the rights of an owner or their family members who live in the rental premises.

[34]           In this case, the Member found on the evidence that the Landlord’s mother was in effect a guarantor and had no other involvement with the property, which was managed entirely by the Landlord.

[35]           The Member did not err in her interpretation of “owner” under s. 5(i) of the RTA. To the contrary, to find that the exemption does not apply because the “child” at issue is the child of one co-owner and not the other co-owner, who is also a family member, would be an overly technical and narrow interpretation of the provision. This is especially so when the other co-owner is an owner in name only, as was the case here.

Did the Member Err in Failing to Consider the Subsequent Sale of the Premises?

[36]           The Tenant argued that the Landlord could not rely on the s. 5(i) exemption because the premises were sold in the interim, and the sale closed on July 15, 2021, which was the date of the hearing before the LTB. Before this court, the Tenant argued that a new owner steps into the shoes of the previous owner and that it would be contrary to the RTA for the exemption to continue, for example, if the new owner is a corporation.

[37]           In our view, the Member correctly determined that in the circumstances of this case, the sale would not impact the application of s. 5(i). This is because the relevant time for determining the application of the exemption is when the tenancy began. The tenancy began in July 2019, and the Tenant was evicted in March 2021, long before the sale took place. The issue before the LTB was whether the s. 5(i) exemption applied when the Tenant resided at and was evicted from the premises. The subsequent sale of the premises had no impact on this determination. The fact that the s. 5(i) exemption was found to apply at that time does not mean that it would continue to apply after the property was sold.

Did the Member Err in Failing to Consider the Requirements under Subsection 5.1(3)?

[38]           The Tenant also relied on s. 5.1(3)1 of the RTA to assert that the Landlord was obligated to inform the Tenant of her intention to seek an RTA exemption at the commencement of his tenancy and that this never occurred. At the hearing, the Tenant acknowledged that s. 5.1 does not apply to the tenancy but submitted that the interpretation of s. 5(i) should be informed by its terms.

[39]           This argument was not raised before the LTB and should not be raised for the first time on appeal. In any event, s. 5.1 has no application, whether directly or by analogy.

[40]           Subsection 5.1(3)1 of the RTA requires that an agreement state that the provider of the living accommodation intends that the living accommodation be exempt from the RTA, among other things. However, the application of the provision is limited to housing situations defined in s. 5.1(1) of the RTA, specifically, “living accommodation provided to a person as part of a program described in subsection (2).” Therefore, s. 5.1(3) does not apply to the exemption found in s. 5(i) of the RTA.

[41]           While the Tenant submits that the interpretation of s. 5(i) should be informed by the requirements under s. 5.1(3), the Legislature has not enacted similar notice requirements in relation to s. 5(i). The fact that the legislator has enacted specific conditions in relation to a particular situation, in this case, living accommodation provided as part of a program, does not mean that it intended to do the same in respect of living accommodations where occupants are required to share facilities with the owner or owner’s family member. To the contrary, the absence of the specific requirements in relation to s. 5(i) suggests that the Legislature did not intend that the requirements under s. 5.1(3) apply.  

[42]           The Member did not err in failing to apply the requirements under s. 5.1(3) to the circumstances of this case.

Was the Landlord Required to Bring an Application under s. 9 of the RTA?

[43]           The Tenant submits that the Landlord was required to bring an application under s. 9 of the RTA for a determination as to whether the RTA applies. It does not appear from the Decision or record before the LTB that this issue was raised before the Member.

[44]           Section 9 states as follows:

9(1) A landlord or a tenant may apply to the Board for an order determining,

(a)               whether this Act of any provision of it applies to a particular rental unit or residential complex;

(b)               Any other prescribed matter.

(2) On the application, the Board shall make findings on the issue as prescribed and shall make the appropriate order.

[45]           As is clear from the language of the provision, s. 9(1) allows, but does not require that a landlord make an application for a determination under the RTA. Subsection 9(2) requires that the LTB make findings and an order on any such application but does not create an obligation on the landlord to bring an application.

[46]           The Tenant’s reliance on s. 185(1) of the RTA is also misplaced. That provision prescribes the form of application and information required but does not create an obligation to bring an application.

[47]           Section 5(i) of the RTA raises a question of subject-matter jurisdiction. Administrative decision makers cannot proceed to hear an application without legislative authority. It is therefore always open to a party – in this case the landlord – to raise a question of jurisdiction. Here, the Member found that the s. 5(i) exemption applied, the RTA did not apply, and that the LTB lacked jurisdiction over the dispute.

Conclusion

[48]           Accordingly, the appeal is dismissed.

[...]"

Disclaimer:

You should not act or rely on any information provided in this blog. It is not legal advice, and the content is provided for general discussion and general information purposes only and to help encourage further research. To ensure your interests are protected, retain or formally seek legal advice from a licensed legal professional.

Never disclose details about your specific legal matters outside of situations when you have established solicitor-client relationship with a qualified legal professional. By using this blog, you acknowledge and accept this warning and agree to waive all liability for use of any information contained in this blog.