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.

A few recent rulings (early April 2022)

 

A few recent rulings which might be of interest (an N12-based appeal, a couple of rulings from the Human Rights Tribunal, a couple of commercial lease cases):

1)

Marshall v. Brady, 2022 ONSC 2158 (CanLII), <https://canlii.ca/t/jnmlm>

Appeal of N12 decision based on "new post-hearing evidence about the mother living in Florida this past winter", challenging the good faith claim.

"Both the finding of good faith and the finding of intended full time occupancy are findings of fact."

Appeal dismissed.

______

"[8] We conclude that the appeal raises no question of law, and the Court therefore has no jurisdiction under s. 210 of the RTA. The Tenants are essentially challenging the factual findings of the Board, which are not the subject of appeal. Both the finding of good faith and the finding of intended full time occupancy are findings of fact. There was no extricable issue of law and no error of law. The exceptional circumstances referred to by counsel, in which a factual matter may give rise to an error of law, do not apply in this case. The new evidence, even if admitted, does not give rise to an error of law."

______________________

2)

Interim decision of the Human Rights Tribunal about witnesses' evidence:

Amoako v. Truong, 2022 HRTO 483 (CanLII), <https://canlii.ca/t/jnm6g>

"[7] The proposed witnesses’ evidence that the respondent is not racist is not admissible and they will not be permitted to testify on that issue. This is opinion evidence about the respondent’s character and is not directly relevant to the interaction between the parties that gave rise to the allegation of discrimination. This is consistent with other Tribunal decisions such as Segal v. Toronto (City), 2009 HRTO 1907 at paras. 9 to 15 and Benjamin v. PTC Accounting & Finance Inc., 2011 HRTO 1593 at para. 24.

[8] The Application alleges that the respondent told her that he had bad experiences in the past when he rented out to Black people. The respondent denies this. The applicant’s narrative puts into issue whether the respondent told her that he did not want to rent to Black people based on his past experience when he rented to Black people. The racial background of past tenants and tenants to whom he rented after the interaction has some relevance. If the applicant does not dispute the fact that the respondent rented units to these two tenants, then there may be no reason for the tenants to testify on this point. This will be further addressed at the hearing to determine whether the tenants are necessary and relevant witnesses.

ORDER

[9] The proposed witnesses will not be permitted to testify about their opinion as to whether the respondent is racist."

______________________

3)

A decision from HRTO involving a failure to establish a link between the respondent's alleged actions/inactions and applicant's Code-protected grounds / characteristics.

Rosario v. Grey (County), 2022 HRTO 490 (CanLII), <https://canlii.ca/t/jnm6h>

"[15] It states, in Section 2.(2), of the Code: “Every person who occupies accommodation has a right to freedom from harassment by the landlord or agent of the landlord or by an occupant of the same building because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sexual orientation, gender identity, gender expression, age, marital status, family status, disability or the receipt of public assistance”. The applicant did not complain to the respondent that the harassment he was experiencing from his neighbour was because of a protected grounds. The applicant did not allege or provide evidence in his possession or that may be reasonably available to the applicant to link the harassment of the neighbour or the failure, if any, on the part of the respondent to resolve the issues between the applicant and his neighbour, because of his race, colour or disability.

[16] The Tribunal has stated on many occasions that it does not have a general power to deal with allegations of unfairness. See, for example, Forde v. Elementary Teachers’ Federation of Ontario, 2011 HRTO 1389; Szabo v. Office of a Member of Parliament of Canada, 2011 HRTO 2201; and Abdi v. Voyageur Transportation, 2011 HRTO 1319. Discrimination generally involves an allegation of unfair treatment on the basis of one or more of the grounds under the Code, such as disability. Unfair treatment is not discriminatory in the legal sense unless there is proof that one or more of these personal characteristics were a factor in the treatment the applicant experienced. The Tribunal's jurisdiction is limited to claims of discrimination that are linked to the protections set out in the Code

[17] In order to make out a violation of the Code, the applicant would have to establish a link between the respondents’ alleged actions/inactions and his race, colour and/or disability. I find that the applicant has failed to point to any evidence in his possession or that may be reasonably available to the applicant that could reasonably establish that his race, colour or disability was a factor in any of the respondent’s actions/inactions in regard to his tenancy at the apartment building owned and managed by the respondent."

______________________

4)

An interesting decision on whether or not a commercial tenant was in default of the lease (with involvement of CECRA funding), on applicability of estoppel by convention and on conditions for relief from forfeiture:

Top Modern Nail Spa Inc. v. 2383437 Ontario Inc., 2022 ONSC 2103 (CanLII), <https://canlii.ca/t/jnmlx>

______________________

5)

On validity of an arbitration clause as the basis for renewing a commercial lease term:

Magna International Inc. v. Granite Real Estate Inc., 2022 ONSC 2200 (CanLII), <https://canlii.ca/t/jnlrg>

______________________

6)

On whether an "air parcel" is assessable "land" for land assessment (MPAC) purposes:

Craft Kingsmen Rail Corp v. Municipal Property Assessment Corporation, 2022 ONSC 2222 (CanLII), <https://canlii.ca/t/jnmlb>

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.