Occasionally we get questions about whether or not notices of termination can be shortened contractually.
First, there is already an option to terminate early via a mutual agreement of termination (e.g. N11 form), which can be signed for any date in the future, as long as it is not signed at the time when the tenancy agreement is entered into or as a condition of entering into the tenancy agreement (see RTA subsection 37(5)). If both parties agree to terminate, the tenant would owe rent only up until the termination date on the agreement of termination (N11), assuming the tenant vacates on or by that date.
However, what if the tenancy agreement itself has a lease clause that would allow for a landlord or a tenant to terminate the tenancy with a shorter notice? Would this clause be valid and enforceable?
1)
First, it is obvious that the answer for landlords' notices of termination is "no": each section on eviction in the RTA specifies minimum notices for different grounds, and if the tenant doesn't vacate, the landlord has to file with the Board (RTA ss. 43(2)(b)), and the tenant is entitled to dispute the landlord's application at the LTB (RTA ss. 43(2)(c)). Besides, the whole point of RTA section 37 (security of tenure) is that "a tenancy may be terminated only in accordance with this Act". And RTA sections 3 and 4 make it generally impossible to contract out of statutory rights and obligations under the Act.
2)
What about tenants?
One might argue that, despite minimum statutory requirements for tenant's notices of termination (which are spelled out in RTA section 44), in practice, tenants can vacate early anyway (there is no mechanism of keeping tenants if they want to vacate). (See more on this in this post.) And the landlord would just be able to sue them for loss of rental income as a result of breach of contract, as long as the landlord can show that the landlord minimized his losses for the tenant's breach (RTA s. 16, RTA ss. 88(4)) by actively trying to re-rent the unit and no double-dipping occurred (RTA ss. 88(3)). (See more on this in this post.)
So could a tenant and a landlord agree in their lease that the tenant can provide a shorter (e.g. 30 days') notice of termination? Would this clause be valid and enforceable?
A pretty old case in Pinheiro v. Bowes, 1994 CanLII 7479 (ON SC), <https://canlii.ca/t/1wc1r> (which, by the way, was used later in 1086891 Ontario Inc. v. Barber, 2007 CanLII 18734 (ON SCDC), <https://canlii.ca/t/1rldv>, which confirmed that landlords cannot contract out of their statutory right to increase rent every 12 months, as per RTA s. 119) analyzed this specific scenario in detail, and the answer seems to be "no", i.e. minimum notice requirements in the RTA would trump the lease clause.
"[11] I must express some discomfiture at permitting a landlord to rely on the statutorily created invalidation of that landlord’s own lease proviso, but it is not for a judge to run roughshod over a statute in an effort to protect a tenant.
[...]
[14] In my view, while s. 99 was largely created to protect tenants, it cannot be said to be contrary to public policy to enforce it in favour of a landlord. Section 99 provides a broadly gauged protective rule for landlord-tenant relationships and must be enforced as it plainly reads and provides. On its face, it invalidates the lease proviso in issue and makes the tenant liable for one month’s additional rent."
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"[1] KILLEEN J.:—This application by the landlord under s. 113 of the Landlord and Tenant Act, R.S.O. 1990, c. L.7, has been narrowed down, by agreement, to one issue, namely, whether a contractual provision as to notice of termination may override s. 80(1) of the Act.
The agreed facts
[2] The parties entered a lease which contained the following provisions as to notice of termination:
19. (a) If either the Tenant or the Landlord wishes to terminate the tenancy at the end of the term created by this agreement then he will give notice to that effect in writing delivered personally by hand or by Her Majesty’s mail not less than 60 days prior to the expiration of this agreement.
(b) If either party has given such notice the rented premises may be shown to prospective tenants at all reasonable hours after delivery of the notice.
(c) If no such notice pursuant to this paragraph has been delivered by either party, then the Tenant shall become a monthly tenant under the terms and conditions herein set out, providing that nothing herein shall prevent the parties agreeing to any other terms for said monthly tenancy.
(d) The Landlord and Tenant further agree that the monthly tenancy created by (c) may be terminated by giving written notice to terminate on or before the last day of one month of the tenancy to be effective on the last day of the following month of the tenancy.
[3] It is acknowledged that, after the specified term of this lease, the tenant became a monthly tenant by operation of para. 19(c) above. Thereafter, the tenant stayed in the premises for some time and, on October 27, 1993, served a written notice purporting to terminate the tenancy as of November 30, 1993. In doing so, the tenant thought that she was lawfully complying with the one-month notice proviso set out in para. 19(d) of the lease.
[4] If the tenant was entitled to rely on para. 19(d), then, of course, she owes nothing further to the landlord. If, however, that clause cannot be relied upon, then the tenant owes the landlord one additional month’s rent by virtue of s. 99 of the Act.
The resolution of the notice issue
[5] The parties acknowledge that two provisions of the Act must be considered in deciding the central issue of this case. These sections are as follows:
80(1) This Part applies to tenancies of residential premises and tenancy agreements despite any other Act or Parts I, II, or III of this Act and despite any agreement or waiver to the contrary except as specifically provided in this Part.
…
99(1) A notice to terminate a monthly tenancy shall be given not less than sixty days before the date the termination is specified to be effective and shall be specified to be effective on the last day of a month of the tenancy.
[6] Mr. Schlemmer, for the tenant, argues that s. 99, which creates a notice period of 60 days for monthly tenancies, does not bind the tenant in this case because of the express provision in the lease which permits termination on notice for the lesser period of 30 days.
[7] Mr. Schnurr, on the other hand, argues that s. 80(1), in clear and unambiguous language, invalidates the shorter one-month notice period in the lease for all purposes and, in combination with s. 99(1), effectively requires the tenant, or landlord, to give 60 days notice.
[8] At first blush, it may seem anomalous or even unjust to hold that a landlord may successfully argue the invalidity of a lease provision in a lease form which that landlord has proferred as a basis for a contractual bargain. Here, after all, the landlord has provided a lease form which permits either party to terminate a monthly tenancy on one month’s notice and not the longer period in s. 99(1) of the Act.
[9] Yet, s. 80(1) represents the legislative sticking point and it seems to be crystal clear in its intent. Section 80(1) says, in explicit terms, that every provision of Part IV applies to all residential tenancy agreements and that this is so “despite any agreement or waiver to the contrary except as specifically provided in this Part” (emphasis added).
[10] I can identify no ambiguity in s. 80(1) and the parties acknowledge that there is nothing in Part IV which permits any agreement or waiver to the contrary.
[11] I must express some discomfiture at permitting a landlord to rely on the statutorily created invalidation of that landlord’s own lease proviso, but it is not for a judge to run roughshod over a statute in an effort to protect a tenant.
[12] I realize that there is a host of arcane common law decisional authorities which permit a party for whose benefit a special protective clause was created to waive such clause and elect to carry on with a contract. Such waiver rulings are, however, a product of private contract principles and can have no pride of place where the legislature has spoken authoritatively and clearly the other way. There is nothing, for example, in the Interpretation Act, R.S.O. 1990, c. I.11, from which the tenant can draw comfort in her effort to rely on waiver or something like waiver.
[13] Judges must accept statutes as they find them if they are clear and unambiguous and catch the factual situation under consideration.
[14] In my view, while s. 99 was largely created to protect tenants, it cannot be said to be contrary to public policy to enforce it in favour of a landlord. Section 99 provides a broadly gauged protective rule for landlord-tenant relationships and must be enforced as it plainly reads and provides. On its face, it invalidates the lease proviso in issue and makes the tenant liable for one month’s additional rent. In the circumstances, there will be no order for costs.
Judgment accordingly."
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