The Adversely Evolving N12 Notice for Personal Use

Aug 13, 2021


WRITTEN SUBMISSION OF THE TENANTS

 This submission is respectfully made following the hearing of this matter that was completed held on December 6, 2019, February 26, 2021, and May 25, 2021, and in compliance with the interim order of Member dated May 31, 2021.

Background

  1. The tenants (Tenants) applied for an order determining that the Landlord (Landlord) gave a notice of termination in bad faith (T5 Application). The Tenants also applied for an order that the Landlord charged them illegal rent, did not pay the interest on the last month rent deposit and did not pay them one-month rent compensation under s. 48.1 of the Act (T1 Application).

Tenants’ Evidence

  1. The tenant, Ms. K, testified that Landlord called her on May  25,    The Landlord informed the Tenants that she had already sold her house and needed to move into the rental unit by herself. The Landlord also told the Tenants that the next 60 days would be the Tenants’ last.
  1. The Tenants were paying rent of $1,730.00 a month at that point. They also presented a copy of the rental agreement with the Landlord dated back to October 2016.
  1. The tenant, Ms. K, gave testimony that their initial rent was $1,650.00 and that Landlord never gave them a written notice  of  rent    Nevertheless, Landlord increased their rent from $1650.00 to $1,700.00 per month from November 1, 2017, to $1,730.00 from January 1, 2019.
  1. On May 31, 2019, the Landlord sent an email to the tenant, Mr. N, which he shared with his wife, Ms. K. Tenants presented the said email in evidence. In her  email,  the Landlord confirmed her May 25th telephone conversation with Tenants and stated the following:
“I’m informing you that I will need my property for my own family use, by our lease agreement the notice of termination is 60 days but I’m willing to extend to 90 days. please let me know if you want your termination to be extended, please respond to my notice by latest May 31st by 3pm”

The email’s subject read: “Madawaska Ave/Main Floor”. It had the date, May 31, 2019, at the top and the Landlord’s name at the bottom. She routinely used that name while communicating with the Tenants: “Donna”.

  1. Ms. K immediately took steps to find a new place to live and then called the  Landlord on May 31, 2019. She told the Landlord that they would comply with the Landlord’s notice and move out on June 30, 2019.
  1. The Tenants had found the new rental by May 27, 2019 and signed the respective rental agreement on May 31, 2019, after the telephone conversation with the Landlord. The fact of the said conversation is confirmed by the Landlord’s telephone record (Tab L, page 85). Accordingly, the Tenants vacated the rental unit on June 30, 2019.
  1. They presented a copy of the rental agreement for their new place at Centre Avenue in Toronto. The Tenants moved into that rental unit on July 1, 2019. Their new rent was $2,850.00 a month.
  1. The Tenants discovered that the Landlord advertised the rental unit for rent at a higher price on July 5, 2019. They presented a photograph of the house’s front yard with a “For Lease” sign. The date on the photograph was July 5, 2019. The Tenants also presented a copy of the MLS (Multiple Listing Services) listing that advertised the rental unit for rent. This MLS listing included, among other things, the following information:
  • Contract day: June 6,
  • Expiry day: October 31,
  • Monthly rent: $2,380.00.

The listing also requested potential tenants to provide credit, financial and employment information, payment for the first and last months and ten postdated rental cheques for the remaining 10-month term of the lease.

  1. The Tenants also presented another MLS listing for the same rental unit with a contract date of October 5, 2019 and an expiry date of January 31, 2020. The Landlord asked for $2,350.00 in rent in that listing. It is noteworthy that the Landlord published this listing after the Tenants had filed their T1 and T5 applications.
  1. The tenant, Ms. K, testified that she and her family moved out of the rental unit because of the Landlord’s demand and the email notice dated May  31,  Before the notice, they wanted to stay in the unit as it suited them well: it was close to their work and son’s school. In addition, it was not a good time to move because of her son’s eye surgery that required him to stay and recover.
  1. Ms. K also testified that she researched the rental market before renting the place at Centre Avenue. The  prices were high,  and  there  was nothing  on the market  in the area cheaper than the rent they agreed to pay at Centre Avenue.
  1. The Tenants presented the list of rentals available at the appropriate time and a letter of the opinion of Mr. Ken , a licensed real estate broker qualified as an expert. Mr. Ken stated in his letter that the rental prices  for  the comparable properties in  the same area of the city were between $2,700.00 and $3,000.00 per month from April 1, 2019 to September 30, 2019.
  1. Ken testified at the hearing. He explained that he based his analysis on ten properties similar to Madawaska Avenue and listed for rent in the same area at    the appropriate time. He attached all ten MLS listings to his letter of opinion. The Landlord’s legal representative subjected Mr. Ken to vigorous cross-examination. The witness responses were clear and convincing.
  1. The tenant, Ms. K, also testified about the Tenants’ monetary claim:

 

T1 application:

The Tenants wanted the Board to order the Landlord to pay back all amounts Tenants paid in rent above $1,650.00 a month. They also claimed that the Landlord did not pay them one-month rent compensation under s.48.1 of the Act and interest on the last month rent deposit.

T5 application:
The Tenants also claimed all portion of the increased rent for 12 months that was $13,440.00 = ($2,850.00 – $1,730.00) x 12 months, $2,000.00 for trouble and inconvenience and $1,000.00 for moving expenses.

  1. Ms. K explained that the T5 application monetary claim was based  on  the Landlord’s lack of good faith and dishonest behavior, distress and serious inconvenience caused by the necessity to move on the very short notice and within a very narrow period, and the time and efforts that her husband and she had to spend to move.

Landlord’s Evidence

  1. The Landlord testified that she did not consider her email to the Tenants dated May 31, 2019 as a termination notice. She did not want the Tenants to move. Even more, she wanted them to stay. Therefore, her email was a courtesy to the Tenants in case they wanted to end their tenancy.
  1. The Landlord  admitted that  she  sold her  primary residence at Bathurst Glen Avenue only on February 15, 2020 or almost nine months after her May 31, 2019 email to the Tenants.
  1. The Landlord admitted that she wanted to rent the house at Madawaska Avenue due to financial difficulties while waiting to sell her primary residence at Bathurst Glen Drive.
  1. The Landlord also admitted that she did not move to Madawaska Ave. until after February 15, 2020. She alleged that the only person who moved into the house was her older son. However, she could not explain why he did that while the Landlord intended to rent the place out and advertised it accordingly. Landlord’s oldest son did not give evidence at the hearing. The Landlord introduced no further proof of her son’s residency in the house.
  1. The Landlord insisted that her intention to rent the house at Madawaska Ave. was a temporary measure to resolve her financial difficulties. She asserted that all rental conditions she proposed to prospective tenants were designed for short rental. However, she was unable to explain what she considered as “short rental.” The Landlord also stated that the higher rent in her MLS listings for Madawaska Ave.  was due to the “short rental” conditions and furniture.
  1. The Landlord did not introduce much documentary evidence during her testimony: telephone records, a one-page description of four rental properties she prepared on her own,  and  photographs of the                                                    Madawaska interior. Instead, the Landlord dedicated most of her testimony to the comparative analysis of four properties on her description with   Madawaska Ave. to show that the Tenants rented her new place  for too much.

 

Analysis

 

T5 Application

Law

  1. Tenants’ T5 application is brought pursuant to section 57(1)(a) of the Residential Tenancies Act, 2006 (the ‘Act’) which reads as follows:

57 (1) 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;
  1. This provision means that to succeed on this application the Tenant must lead sufficient evidence to establish it is more likely than not that:
    1. The Tenants got a notice of termination under s. 48;
    2. They moved out of the rental unit as a result of the Landlord’s notice;
    3. The notice was given in bad faith meaning the Landlord had no intention of moving into the rental unit; and
    4. The Landlord did not in fact move into the rental unit within a reasonable time after the Tenants vacated.
  1. In addition, section 57 of the Act sets a presumption that reads as follows:

57(5) 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;

57(6) The period referred to in subsection (5) is the period that,

(a) begins on the day the landlord gives the notice of termination under section 48; and
(b) ends one year after the former tenant vacates the rental unit.

 

Notice of termination

  1. The Landlord maintained that her email to Tenants dated May 31, 2019 was not a notice of termination under s. 43 and s. 48 of the Act. She argued that the notice was not in the form approved by the Board and lacked the required elements.
  1. Section 43 of the Act sets out that a notice of termination must identify the rental unit for which the notice is given; state the date on which the tenancy is to terminate, and be signed by the person giving the notice or the person’s agent.
  1. The Landlord’s email substantially complied with section 43. The email identified the unit, clearly explained that the Landlord needed the rental unit for her family, and indicated that the Landlord’s notice of termination is for 60 days; that was the time set in s. 48 of the Act. The Landlord put her name at the bottom of her email. The Divisional Court considered this type of  communication  and signature  sufficiency  in Lev v. Serebrenikov, 2016 ONSC 2093. The court found that an email with the sender’s  name  on  it  is  a  signed   written      (Paragraphs   24   and 25).
  1. However, it is more important to consider this notice in the context of section 57 of the Act. Section 57 requires evidence that a landlord gave notice under section 48. However, it does not state that the notice must be in perfect compliance with section 43 of the Act.
  1. This interpretation of section 57 would be consistent with the legislator’s intention. Any other interpretation of this requirement will open the Pandora Box and allow any landlord to serve a tenant with the notice of termination for the landlord’s personal needs, make the tenant leave, and then escape liability based on the defects of his/her own notice.
  1. The Landlord’s attempt to portray her May 31, 2019 email as something else but a demand to vacate the unit as her family needs it withstands no objective semantic, common sense or legal analysis. The plain language of the email speaks for itself.
  1. As such, Tenants respectfully submit that there is sufficient proof that the Landlord served them with the notice under section 48 of the Act.

Tenants moved out as a result of the notice

  1. It is unclear if the Landlord disputes that the Tenants moved out based on her notice. She seems to imply that Tenants could have different agendas and wanted to terminate the tenancy irrespectively. However, the Landlord introduced no evidence in this regard. Nor did she clearly explain her opinion.
  1. The Tenants consistently maintained that Landlord’s written notice and verbal demands were the only reason they moved out. Ms. K provided sufficient and credible testimony regarding this issue. She explained why they wanted to stay in the unit.

Bad Faith

  1. It has been established that the Landlord advertised the unit for rent in 5 days after giving the termination notice. Therefore, the burden to prove that she acted in good faith shifted to her under s.57(6) of the Act.
  1. Nevertheless, the Landlord provided no credible explanation or evidence of material change in her circumstances between May 31 and June 6, 2019, which made her change her intention from moving into to renting out the rental unit. June 6, 2019 was when she advertised the unit for rent on MLS for the first time.
  1. In addition to that, Landlord testified that she put her  primary  residence  at Bathurst Glen Dr. on sale at the time. She intended to move into the rental unit when her primary residence was sold.
  1. However, she provided no evidence of whether she had an agreement to purchase and sell her primary residence at the time of the notice. The Landlord only stated that she sold it on February 15, 2020. It happened almost nine months after the notice and more than two months after the first hearing day of the Tenants’ application.
  1. Under such circumstances, on May 31, 2019, the Landlord could not be and was not reasonably certain that her efforts to sell her primary residence would result in a completed sale  and  her  consequent moving to Madawaska Avenue within a reasonable time. Her further testimony confirmed just that. She admitted moving to the unit after February 15, 2020. It was the day when Landlord completed the sale of her primary residence.
  1. As such, the Tenants respectfully submit that the Landlord gave notice under section 48 of the Act in bad faith.

 

Did Landlord move in the rental unit within reasonable time?

  1. The Landlord’s admission that she moved into the rental unit almost nine months after May 31, 2019 proves the final point required under s. 57(1)(a) of the Act. Nine months is not a reasonable time to move in.
  1. The Landlord alleged that her oldest son moved into the rental unit within a reasonable time. However, as it was argued above, the Landlord provided no sufficient explanation why he was the only member of her family relocating to Madawaska Ave. Also, she could not explain why her son moved there while she advertised the place for rent. In June 2019, the Landlord offered it to prospective tenants for the next 12 months. She did it again in October 2019. The son did not appear before the Board to give evidence.
  1. In general, the entire Landlord’s testimony was not consistent with the documentary evidence and lacked common sense. It did not reasonably explain apparent contradictions between the documents and her statements at the hearing.
  1. It is respectfully  submitted  that  the  tenant’s,    K,  testimony  and documentary evidence buttressed the presumption that Landlord gave the notice in bad faith. The Landlord’s testimony, especially in the absence of her son, was insufficient to overcome the presumption operating against her position.

 

Remedy

  1. Subsection 57(3) of the Act provides that should a tenant be successful, the Board may order the landlord to pay all or any portion of any increased rent that the former tenant has incurred or will incur for a period of one year after vacating the rental unit and reasonable out-of-pocket moving, storage and other like expenses that the former tenant has incurred or will incur, and any other order that the Board may consider appropriate.
  1. The Landlord did not dispute that the Tenants paid $2,850.00 for their new rental unit. However, the Landlord tried to argue that the new unit is not comparable with Madawaska Ave. The Landlord produced a  one-page  description  of  four properties. She made the long and convoluted argument that some specific characteristics of those properties are similar to Madawaska Avenue and that the Tenants should have rented her new place for a lower price.
  1. The Tenants presented a detailed opinion letter of a licensed real estate broker, Ken, who also personally testified and was cross-examined at the hearing.
  1. The Tenants respectfully ask the Board to accept Mr. Ken’ evidence over Landlord’s evidence for the following reasons:
  1. Mr. Ken’ analysis of the rental prices in the area is based on a larger number of diverse properties. There were ten properties versus the Landlord’s four.
  2. All properties he analyzed as comparables were available for rent during the summer and the beginning of fall 2019. There was only one such property on the Landlord’s list with a contract date on July 26, 2019.
  3. His analysis was based on broader characteristics of the comparable properties.
  4. Despite his status as a broker of record for Ms. Ken, a sale representative in his brokerage, Mr. Ken had much less personal interest in the outcome of the hearing and, therefore, much more limited bias, if there was any at all.
  5. Mr. Ken’ expert qualification was subject to verification at the hearing.
  1. The tenant, Ms. K, also testified that she conducted a thorough search for a new rental for  her family.   She stated that  Centre Avenue was the cheapest available alternative in the same area at the end of May 2019.
  1. The Tenants respectfully submit that The Board should not accept the Landlord’s argument that they had a hypothetical option to rent a new place for the same or slightly higher price. The rental market is too complex and volatile.
  1. As such, the Tenants ask the Board to grant their full portion of the increased rent for 12-month which is $13,440.00.
  1. The Tenants did not produce any documentary evidence to confirm their moving expenses and quantify  their  claim for troubles and inconvenience. However, Ms.    K delivered credible testimony about  how  unexpected  and  upsetting  the Landlord’s request to vacate was and how much time and effort they invested in finding a new place and moving there within such a short period.
  1. As such, the Tenants ask the Board to grant their claim for $1,000.00 moving expenses and $2,000.00 for troubles and inconvenience.

 

T1 Application

  1. Relevant provisions of the Act:

Notice of rent increase required
(1) A landlord shall not increase the rent charged to a tenant for a rental unit without first giving the tenant at least 90 days written notice of the landlord’s intention to do so.

Increase void without notice
(4) An increase in rent is void if the landlord has not given the notice required by this section, and the landlord must give a new notice before the landlord can take the increase.

Money collected illegally
(1) A tenant or former tenant of a rental unit may apply to the Board for an order that the landlord, superintendent or agent of the landlord pay to the tenant any money the person collected or retained in contravention of this Act or the Tenant Protection Act, 1997.

Time limitation
(4) No order shall be made under this section with respect to an application filed more than one year after the person collected or retained money in contravention of this Act or the Tenant Protection Act, 1997.

Rent deemed lawful
(1) Rent charged one or more years earlier shall be deemed to be lawful rent unless an application has been made within one year after the date that amount was first charged and the lawfulness of the rent charged is in issue in the application.

Increase deemed lawful
(2) An increase in rent shall be deemed to be lawful unless an application has been made within one year after the date the increase was first charged and the lawfulness of the rent increase is in issue in the application.

  1. The Tenants seek repayment of the unlawful rent that the Landlord has overcharged since December 2017. Ms. K testified that they never received written notice of the rent increase.
  1. The leading case with respect to invalid or void notices of rent increase is the Ontario Court of  Appeal’s  decision  in Price     Turnbull’s   Grove   Inc., 2007   ONCA  408 (Price). The Court in Price found that the use of the word “void” in the  equivalent provision of the current Act, section 116(4), meant that the legislature “expressed its intention, in plain language, that a rent increase imposed without at least 90 days advance written notice to the affected tenant is of no legal force or effect. Thus, a rent increase rendered void under section 116(4) of the Act for non- compliance by the landlord with the mandatory notice requirement of section 116(1) of the current legislation is not merely unlawful – it is a nullity. It is as if the increase never occurred.” [Price, paragraph 37]. As such, void rent could not be saved by the deeming provision of the legislation (Section 136(1) of the current Act). The Court held that section 136 simply did not operate “to render lawful a rent increase deemed to be void” under section 116(1).
  1. The reasoning of this court decision should apply with respect to the consideration of whether the rent increase in this case has been saved under section 136 of the Act since The Tenants respectfully submit that their lawful rent at all times was $1,650.00.
  1. The total rent overpayment calculated based on Ms. K’s evidence at the hearing is as follows:
    1. $50.00 per month overpayment from November 1, 2017 to December 31, 2018
      ($1,700.00 – $1,650.00) x 14 months = $700.00.
    2. $80.00 per month from January 1, 2019 to June 30, 2019
      ($1,730.00 – $1,650.00) x 6 months = $480.00Total: $700.00 + $480.00 = $1,180.00
  1. Tenants claim $76.72 in unpaid interest on the last month rent deposit.
  1. The Tenants also claim compensation under s.48.1 of the Act that the Landlord never paid to them. The amount of compensation is equal to one month rent. If the Board grants Tenants’ claim for the illegally collected rent and finds that the lawful rent was $1,650.00, Tenants ask the Board to reward this amount.
  1. The total amount the Tenants ask the Board to reward under their T1 application is
    $2,906.72 = $1,180.00 + $76.72 + $1,650.00.
  1. The Landlord neither disputed the Tenant’s T1 application at the hearing nor did she present any evidence to challenge it.
 

LANDLORD’S RESPONDING SUBMISSIONS

  1. The landlord respectfully submits that in coming to a determination of the facts of the case, the Board should consider if any weight should be given to the evidence of the tenants in light of the fact that while under oath, Ms. K, clearly lied or deliberately mislead the Board on numerous separate occasions.
  1. The landlord submits that as a result of the adjournment of the first hearing, she was given an opportunity to examine the evidence-in-chief of the tenants in detail. A review of the transcript of evidence submitted by the Landlord reveals the following,
    1. At page 27, line 11, Ms. K was asked to compare her new rental unit (Centre Ave.) to the main floor of the bungalow she rented from the landlord (Madawaska Ave.). In reply, she lied to the Board by stating that the basement of Centre Ave. was unfinished and therefore, there was no betterment between both rental units. After the first hearing, the landlord discovered that the basement of Centre Ave. was in fact finished. See. Landlord’s Document Book, Tab. C page 23.
    2. At page 57, line 11, Ms. K stated that she signed a new lease on June 1, 2019 and that she accepted the offer on June 1, 2019. A review of the tenants’ evidence submitted at page 13 (Agreement to Lease Centre Ave.) reveals that the tenants signed a binding agreement to lease Centre Ave. on May 27, 2019 which was later accepted by their new landlord on May 31, 2019. On June 1, 2019, the tenants signed an acknowledgment of receipt of a signed copy of the agreement and not an acceptance of the offer as Ms. K stated at Line 15, page 57 of the transcript. It is submitted that this fact on its face should support a dismissal of the tenants’ T5 application due to the fact that the tenants fully intended to terminate their tenancy and move to Centre Ave. before they received the alleged N12 email on May 31, 2019.
    3. At page 30, Line 24, Ms. K was asked when she discovered that the landlord had advertised Madawaska Ave. for rent. Ms. K replied that she discovered Madawaska Ave. for rent on July 5, 2019 when she “just passed by on the street”. The landlord submits that this statement is both a lie and a clear attempt to mislead the Board. The evidence provided in the tenants’ evidence at page 11 clearly shows that she completed a rental listing search on June 6, 2019 showing that Madawaska Ave. was listed for lease and not on July 5, 2019 as she stated in her testimony under oath. Further to this, the landlord submits that the tenants were well aware that Madawaska Ave. was listed for lease because they were still residing at the property and assisting the landlord with showings. See Landlord’s Document Book, Tab H, page 49 to 55.
    4. At page 35, Line 20 and Page 64, Line 1, the tenants submit that after she received the alleged N12 notice from the landlord, she believed that she would be homeless if she was unable to find another rental unit before the termination date. She stated that she believed this because she is a “simple sales representative and the landlord was high level like Supreme Court”. The landlord submits that these statements were made by Ms. K in an attempt to mislead the Board and create a narrative that she was a victim unaware of her rights as a tenant and being taken advantage of by an unscrupulous landlord. After the tenant provided her oral testimony on the December 6, 2019, the landlord discovered that Ms. K had completed a 2-year paralegal diploma in 2020 and was well aware of her rights even more so that the landlord and the tenants’ “expert” witness. This submission is supported by the fact that the tenants started to compile the evidence for their T1/T5 application on June 26, 2019 while she was still in possession of the rental unit. See Tenants’ evidence page 11 showing the date that the research on Madawaska Ave. was completed.

 

It is submitted that parties who come to the Board with unclean hands and dishonorable intentions should never benefit in any way whatsoever in obtaining any type of relief at the detriment of the other party.

  1. With respect to the Tenants’ Evidence, the landlord responds as follows:
    1. At paragraph 2 of the tenants’ submissions, the tenants mischaracterize the evidence in an attempt to create a false narrative detrimental to the landlord. The evidence provided by both parties did not state that the landlord had sold her current residence. The transcript shows that the tenants alleged that the landlord listed her property for rent and was trying to sell Madawaska Ave.
    2. Contrary to the statement at paragraph 4 of the tenants’ submissions which states that the tenants allege that the landlord failed to provide them with a notice of rent increase. At Tab A page 5 of the landlord’s evidence book, the agreement to lease evidenced in writing that the tenants agreed to a rent increase in accordance with the terms of the lease and the tenants agreed to pay the increased in respect of each rental period for at least 12 consecutive months in accordance with Section 135.1 of the RTA.
    3. Contrary to the statement at paragraph 5 of the tenants’ submissions, the email was sent to only one tenant and clearly does not comply with the requirement that notices must be include all tenants.
    4. Contrary to the statement at paragraph 7 of the tenants’ submissions, the “acknowledge of receipt” was signed on June 1, 2019 but the offer to lease Centre Ave. by the tenant was accepted by the landlord on May 31, 2019. Further to this, Tab L, page 85 does not confirm what was said in a telephone conversation.
    5. At paragraph 8, the tenants sign an agreement to lease Centre Ave. agreeing to an annual rent adjustment.
    6. Contrary to the statement at paragraph 9 and as set out at paragraph 2(c) above, the tenants were well aware that the landlord was trying to rent Madawaska Ave. because the tenants were still in possession of the rental unit when they obtained a listing report on June 6, 2019 showing the property for lease. The landlord’s stated that the tenants assisted her in showing the unit. See Tab H, pages 49 to 55.
    7. Contrary to the statement at paragraph 10 of the tenants’ submissions, the landlord received a copy of the tenants’ T1 and T5 application on November 25, 2019.
    8. Contrary to the statement at paragraph 11 of the tenants’ submissions, the evidence shows that the tenants terminated their tenancy and vacated the rental unit because they had made an offer to lease Centre Ave. on May 27, 2019 and not because they received an email from the landlord on May 31, 2019. The tenants asked the landlord to accept an early 30 day termination of their tenancy and the return of their June 2019 rent cheque. Further to this, the tenants provided no evidence whatsoever that moving had any detrimental effect on her son’s eye surgery.
    9. At paragraph 12, the tenants state that they researched the rental market before renting Centre Ave. thus evidencing that the tenants had an intention to move out in advance of receiving the May 31, 2019 email from the landlord. The landlord submits that the facts show the tenants clear intention to terminate their tenancy and vacate Madawaska Ave. when they submitted a binding agreement to rented Centre Ave. on May 27, 2019.
    10. Contrary to the statement at paragraph 13-15 of the tenants’ submissions, the landlord submits that Mr. Ken cannot be qualified as an expert. Mr. Ken was not an arm’s length independent participant in the proceedings and showed bias in light of the fact that Ms. K worked for his brokerage. Further to this, his alleged market comparisons were substantially flawed for the following reasons:
      1. he used only 6 comparables when there were much more properties available and admitted that he was not familiar with the size or condition of the comparables;
      2. he failed to utilize comparables in the same style and size;
      3. He compared properties to the entire Centre Ave. property instead of comparing properties to the main floor unit only without the basement of Madawaska ;
      4. His comparables were based on the entire house with finished basements;
      5. He applied a simplistic formula to determine value by stating that bungalows were move valuable than 2-storey residential back-split units;
      6. He admitted that he is no longer an active salesperson; and
      7. He attempted to mislead the Board by choosing the most expensive comparables.
  1. With respect to the Landlord’s Evidence section of the tenants’ submissions, landlord submits as follows:
    1. At paragraph 20, it was undisputed that the landlord was unable to lease Madawaska Ave. The tenants resided in the neighbourhood and were able to monitor the occupancy status of Madawaska Ave. Also, Ms. K was a real estate agent and able to review the status of the property on the MLS to determine if the property was rented. Since the property was furnished, the landlord’s evidence that her son moved in after 1 week is reasonable on the balance of probabilities.
    2. At paragraph 21 and on the balance of probabilities, it is reasonable to conclude that the cost to carry two properties without rental income would cause most individuals financial difficulty. Further to this, the landlord submitted in her oral testimony that her interpretation of “short term” was a few weeks to a few months.
    3. At paragraph 22 and contrary to the statements set out therein, the landlord submitted a 109 page document book along with the transcript of evidence from the first hearing in support of her position. Further to this, it is submitted that most of the landlord’s testimony was focused on the inconsistencies and dishonesty of the tenants’ evidence.
  1. It is submitted that at all times during the course of the hearing, the landlord provided the Board with cogent and forthright testimony that was clearly consistent with all the evidence.
  1. At paragraph 24 of the tenants’ submissions, counsel for the tenants sets out the evidentiary requirement to succeed on a T5 application. In the case at bar, it is respectfully submitted that the tenants have failed to meet the requirements.
  1. With respect to the issue of compliance with a valid notice of termination under Section 48, in TST-07189-19, Member Nicola Mulima sets out the 3-part test under Section 43 (1) of the RTA that determines whether a notice substantially complies with the RTA.

43 (1) Where this Act permits a landlord or tenant to give a notice of termination, the notice shall be in a form approved by the Board and shall,

  1. identify the rental unit for which the notice is given;
  2. state the date on which the tenancy is to terminate; and
  3. be signed by the person giving the notice, or the person’s agent. 2006, c. 17, s. 43 (1).
  1. Section 212 of the RTA opens the door to allow variations to the forms approved by the Board. Section 212 states,
212 Substantial compliance with this Act respecting the contents of forms, notices or documents is sufficient. 2006, c. 17, s. 212.

 

  1. In O’Shanter Development v. Bernsteim, 2018 ONSC 557, the Divisional Court examined the legal definition of “Substantial Compliance”. At paragraph 32, the Court states, “The principle that emerges from the Board’s decisions on substantial compliance with the Act’s requirements for forms and other documents, is that landlords must exercise great care when adding an addendum to, or otherwise altering, a Board approved form. Any information that does not comply with the Act may be found to be misleading and may render the altered form invalid.”
  1. In effect, the Divisional Court determined that forms that may mislead or confuse should not be considered to be in substantial compliance with the RTA.
  1. In O’Shanter, the court applied Section 84 of the Legislation Act which states,
84 Deviations from a form whose use is required under an Act do not invalidate the form if,

  1. they do not affect the substance and are unlikely to mislead; and
  2. the form is organized in the same or substantially the same way as the form whose use is required. 2006, c. 21, Sched. F, s.

 

  1. In the case at bar, it is clear that the email dated May 31, 2019 is not in substantial compliance with Section 48 for the following reasons:
    1. the email fails to list the names of both tenants. In all cases that come before the Board, this defect on notices is fatal and, in all cases, result in a withdrawal or dismissal of the application;
    2. The email fails to provide a province and postal code which renders the identification of the rental unit confusing and deficient;
    3. The email fails to provide a specific termination date as is clearly required by Form N12. It is submitted that the statement “60 days or 90 days” is confusing especially in light of the claim by the tenant that she was unaware of her rights and was under the assumption that she would be “homeless” after the time period. In counting days, an ordinary tenant would not know if the first day would be May 31, 2019 (the day the email was received) or the next day being June 1, 2019.
    4. The email is not signed by the landlord. Form N12 requires the notice to be signed by the landlord with the first name and the last name of the landlord printed. This was not provided in the email as the name of the landlord on the lease is not Donna.
  1. It is clear that the email fails to comply with Section 84 of the Legislation Act and Section 43(1) of the RTA for all of the above reasons.
  1. In the case at bar, the tenants allege that the Board relied upon the email dated May 31, 2019 and pleads that the email substantially complies with the requirements of Section 48 of the RTA. It is submitted that this would lead to an absurd result and lower the bar in such cases to the point that simple exchanges between a landlord and tenant could create substantial liability for the landlord.
  1. In Lev v. Serebrennikov, 2016 ONSC 2093, which was submitted by the tenants, the Divisional Court examined the question of whether an email constitutes an acknowledgement in writing signed pursuant to Section 13 of the Limitations Act, 2002, S.O. 2002, c. 24. At paragraph 21, the court states, an email acknowledging the debt with the individuals name on the email was a sufficient signature within the requires of the Act.
  1. At paragraph 24, the Divisional Court determined that, an email can satisfy the requirements of s. 13 of the Act concerning acknowledgement. The issue is every case will be one of fact concerning authenticity.
  1. It is respectfully submitted that the Divisional Court did not intend that the decision in Lev should apply to all other cases when it stated, “The issue is every case will be one of fact concerning ”.

18.  With respect to the question, did the tenants move out of the rental unit as a result of the landlord’s notice? As set out in paragraph 2 above, it is clear on the balance of probabilities, that the tenants did not move out of the rental unit as a result of the May 31, 2019 email. Despite her attempt to mislead the Board, the documentary evidence provided by Ms. K herself clearly establishes that the tenants had a binding offer to lease Centre Ave. on May 27, 2019 thus showing clear intention to terminate their tenancy and vacate the rental unit before receiving the May 31, 2019 email.

  1. With respect to the question, was the notice given in bad faith? It is respectfully submitted that the Board should accept the evidence of the landlord which states that the tenants requested an early termination of their tenancy in order to move to Centre Ave. This was a larger and more luxurious property with a finished basement. The tenants were well aware of the landlord’s attempt to rent the premises because they were occupying Madawaska Ave. at the time the landlord listed the property for lease and was showing the property to prospective tenants. The tenant’s testimony that she was “shocked” when she saw a “For Lease” sign on July 5, 2019 is disingenuous. As a result of the foregoing, there was no bad faith on behalf of the landlord.
  1. The May 31, 2019 email states, “I will need my property for my own family use”. The landlord currently resides in the rental unit and did not lease the unit to anyone else. Further to this, the landlord provide evidence that her son moved into the unit soon after the tenants vacated the unit.

For 8 months, the landlord was burdened with the cost of two properties and made her best efforts to sell her Bathurst Glen Drive property so that she could move her entire family into Madawaska Ave. The landlord relies upon the written statement of the neighbour that was submitted at the first hearing.

  1. With respect to the tenants’ T1 application, the tenants agreed to a rent increase in accordance with the terms of the lease and the tenants have paid the increased rent in respect of each rental period for at least 12 consecutive months in accordance with Section 135.1 of the RTA.
  1. It is respectfully submitted that in light of the forgoing submissions by the landlord that the Tribunal should dismiss the tenants’ applications with costs awarded against the tenants pursuant to Section 204(2) of the RTA.

 

ALL OF WHICH IS RESPECTFULLY SUBMITTED

DATE: June 30, 2021

 

TENANT’S RESPONSE SUBMISSION

The Tenants, respectfully disagree with the legal arguments and interpretation of facts included in the Landlord’s submission to the  Board. The Landlord’s  submission  appears  to be an emotional attempt to counter major facts and evidence in this matter with the allegations of untruthfulness and the Tenant’s alleged failure to actively fight the Landlord’s own wrongdoing.

Paragraph 2a of the Landlord’s submission

The Landlord relies on page 23 of Tab C of her documents to state that the Tenant’s new rental residence has the finished basement. The Landlord proposes to prefer this document over the sworn testimony of the Tenant without further exploring the accuracy of the MLS listing in question. The Tenant believes that this is an unreasonable approach as exaggerations and other marketing tricks are common in the real estate industry.

Paragraph 2b of the Landlord’s submission

The Landlord’s argument here is not entirely clear. This issue was thoroughly explored on the first hearing day. The Tenant testified that on May 25, 2019 the Landlord requested her        to move out. Ms. K started looking for a new rental immediately. She found a new rental opportunity before May 31, 2019. The rental agreement was finalized on May 31, 2019.

The Landlord tries to portray a situation that the Tenant had no reason to move out and that she, for some reason, intended to move out before receiving the May 31, 2019 notice. The aggregate of evidence suggests something different.

In any event, the fact that the Tenant tried to secure her new rental before receiving the Landlord’s notice of termination is legally irrelevant as soon as the Landlord clearly stated her intention to the Tenant on May 25, 2019 and supported it with her written notice on May 31, 2019. Moreover, the Tenant’s action fell within the requirements of section 16 of the Act, requiring the Tenant to take reasonable steps to minimize her losses and get a new rental after May 31, 2019.

Paragraphs 2c and 2d of the Landlord’s submission

It is unclear to what printout of the MLS listing for Madawaska Avenue the Landlord refers. The MLS listing that the Tenant submitted in evidence online on February 20, 2021 was printed on February 11, 2021. If there was any controversy here, which the Tenant denies, the Landlord failed to cross-examine the Tenant or clarify it in some other way while the Tenant was giving her evidence. As such, the Landlord’s allegation that the Tenant came to the Board with unclean hands is baseless.

It is more important, though, that the timing of the Tenant’s knowledge of the Landlord’s lack of good faith and intention to re-rent the property is not legally relevant. The Landlord’s straight and/or implied arguments included in paragraphs 1c and 1d and several times in other parts of her submission may be summarized in the following way:

  1. The Tenant was proficient in legal and business matters.
  2. The Tenant had early knowledge of the Landlord’s wrongdoing.
  3. The Tenant had an obligation to confront the Landlord’s wrongdoing directly.
  4. The Tenant’s failure to confront the Landlord about the latter’s bad faith and intentions deprives her of any remedy under section 57 of the Act.

These arguments are not legally valid as the Act, in general, or section 57, in particular, does not impose an obligation on a tenant to doubt and investigate the Landlord’s various actions and take pre-emptive legal steps to thwart them.

These arguments are not convincing, either. The Landlord speculates about the Tenant’s mindset in May and June 2019, stating that the Tenant completed the paralegal studies more than a year after the relevant events. It is respectfully submitted that the Board should prefer the Tenant’s testimony about her vision of the situation and feelings at the time.

Further in this response submission, The Tenant responds only to the Landlord’s points which require such responses and were not sufficiently addressed in her main submission.

 Paragraph 3a of the Landlord’s submission

The Tenant’s evidence on the first day of hearing may be summarized that the Landlord’s message was that she either sold her house or was in the process of selling it. It was clear that the Landlord commanded the Tenant to move out as she needed the place.

Paragraph 3a of the Landlord’s submission

The Tenant made an argument about the unlawfulness of rent increase in her main submission. The Landlord’s reason that the rent agreement may eliminate the proper rent increase notice requirements is not valid. The Landlord’s reference to s. 135.1 of the Act is not valid, either: this section came in force on July 21, 2020. It did not exist in May and June 2019. As such, the Court of Appeal decision in Price v. Turnbull’s Grove Inc., 2007 ONCA  408 (Price) should apply under the circumstances.

Paragraph 3e of the Landlord’s submission

The Tenant’s agreement to pay a higher rent at her new place does not deprive her remedies under s. 57 of the Act. Section 57 is specifically designed to compensate the Tenant for the difference in rent.

Paragraph 3f of the Landlord’s submission

The Tenant denies any assistance to the Landlord in renting the rental unit. The Landlord never introduced Pages 49-55 of Tab H in evidence during her testimony. There is no explanation of what these documents are, as well as who and when produced them. In any event, they do not include any information pointing out that the Tenant assisted the Landlord in renting out her own home.

Paragraphs 3h and 3i of the Landlord’s submission

Once again, the Landlord’s allegation that the Tenant’s moving out had nothing to do with her request to vacate the rental unit and notice dated May 31, 2019 is a far-fetched argument that has no support in the facts of this matter.

Paragraph 4a of the Landlord’s submission

As the Tenant noted in her main submission, the Landlord failed to overcome presumption set in s. 57(5) of the Act in the absence of the Landlord’s son’s evidence regarding his residence in the unit. The Landlord provided no proof of his occupancy except her own allegation.

Paragraphs 7 through 17 of the Landlord’s submission

The Tenant explained in her main submission why the May 31, 2019 notice substantially complied with the Act.

  1. The Tenant indicated at the hearing that the Landlord’s telephone request and subsequent written notice were in no way misleading or confusing. She had no problem understanding the details of the Landlord’s message. As such, O’Shanter Development v. Bernsteim, 2018 ONSC 557, does not apply to the circumstances of this case.
  2. The Landlord’s May 31, 2019 email had all information required under the law. The Landlord attempts to prove the opposite by running a comparable analysis of the blank N12 notice and email. It is not a good way to determine the validity of the notice. It should be done using the requirements of the Act and relevant case law. The main criteria here is whether the notice was confusing for the tenant.
  3. The Landlord tries to portray her May 31, 2019 email as a simple exchange with the tenant (paragraph 14 of the Landlord’s submission). However, this was not the case. The Landlord specifically named her email as a notice of termination. Please refer to the following phrases in the email: (1) “please respond to my notice by latest May 31 by 3pm” and (2) “I called Mila on May 30 to remind her about the confirmation of 60 days or 90 days the notice of termination”.
  4. The Landlord has never denied or argued the authenticity of her email and that “Donna” was her name that she used to sign it.

Paragraphs 18 through 19 of the Landlord’s submission

The Landlord repeatedly argues that the Tenant somehow wanted to move out and that the Landlord had nothing to do with that. There is no evidence that the Tenant initiated termination of her tenancy for whatever reason. The sequence of events is clearly established:

  1. The landlord called the Tenant on May 25, 2019 and requested the Tenant to vacate as she needed the rental unit for her family.
  2. The Tenant trusted the Landlord and relied on her request to secure a new rental.
  3. The Landlord provided a written notice of termination on May 31, 2019.
  4. The Tenant confirmed receiving of and compliance with the notice by telephone on the same day.
  5. The rental agreement for the new place was finalized after the telephone conversation with the Landlord on the same day.
  6. The Tenant moved out on June 30, 2019.

 Paragraph 22 of the Landlord’s submission

The Tenant respectfully submits that there are no grounds under Rule 23 to exercise discretion and reward cost to the Landlord. However, the Tenant asks the Board to reward her cost for the unproductive appearance on February 26, 2021 as the interim order allowed her to do. The Tenant believes that the $500.00 cost is reasonable under the circumstances.

All of which is respectfully submitted on behalf of Tenants,

 

LANDLORD’S REPLY SUBMISSIONS TO TENANTS’ RESPONSE

  1. It is submitted that the tenants’ characterization of the landlord’s submissions as emotional is in fact trivializing the seriousness and far- reaching public record attack on the landlord’s integrity and good reputation that has been established over a 20-year tenure in the real estate industry. The tenant, Ms. K, as a real estate agent and paralegal candidate schooled in the importance of ethics and professional conduct requirements is well aware of the destructive effect that her allegations can bring on the landlord’s professional reputation and future livelihood. Further to this, the tenant, when giving her testimony, was cognizant of the consequences of her actions as they relate to Section 234(v) with respect to furnishing false or misleading information, Section 238(1) with respect to a fine of up to $25,000.00 if it is found that the tenant lied under oath and Section 204(2) with respect to paying the legal costs of the landlord.
  1. With respect to the issue of the finished/unfinished basement, the landlord submits that the determination of this question of fact is a pivotal question in the litigation. As stated in the tenants’ response to the landlord’s submissions, K provided sworn testimony with respect to this issue being fully aware of the consequences of her testimony under oath. In her response to the landlord’s submissions, the tenant “doubled down” on her testimony under oath stating falsely that other agents regularly provide misleading information or “marketing tricks” in real estate listings. The landlord respectfully requests that the Board proceed under Section 201(1)(e) and view Centre Avenue to obtain a factual determination of this crucial question.
  1. With respect to the landlord’s submission at paragraph 2b, Section 57(1)(a) of the RTA states,
    (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;
  1. The landlord submits that another question before the Board is, Did the tenants vacate the rental unit as a result of receiving the May 31, 2019 email. The evidence clearly shows that the tenants had formulated their intention to vacate the rental unit on or before May 25, 2019 when they made a binding offer to lease the premises located at Centre Avenue on May 27, 2019. The facts show that the tenants did not vacate the rental unit as a result of the May 31, 2019 email. The facts also show that the landlord did not cash the rent cheque for the month of June 2019 as a result of the tenants’ request for an early termination.
  1. With respect to Section 16 of the RTA, the landlord submits that this section has no relevance to the issue of this litigation as none of the parties are liable to pay an amount as a result of any breach of the tenancy agreement. The tenants’ claim arises from an alleged breach of Section 57 of the RTA.
  1. With respect to 2c and 2d of the landlord’s submissions, page 11 of the tenants’ disclosure documents clearly shows that listing search was prepared by the tenant, Ms. K, and “Printed on 06/26/2019 at 4:30:32 PM”. This clearly shows that the tenants’ actions were premeditated and designed to create the narrative being put before the Board in their T5.
  1. Contrary to the tenants’ misinterpretation of the landlord’s submissions, the landlord submits as follows:
    1. The tenant, Ms. K, mislead the Board by creating a false narrative that she was unaware of her legal rights as a tenant and was being taken advantage of by an unscrupulous landlord;
    2. The tenants were fully aware and consented to the landlord’s actions as they actively assisted and participated in the showings in June 2019. There was no wrongdoing by the landlord;
    3. There was no wrongdoing by the landlord and if fact, if there was, a reasonable person would not expect the tenants to assist the landlord in showing the premises if they were actually fearful that they would be “homeless” on June 30th. 2019; and
    4. There was no expectation that the tenant would confront the landlord since both parties acted to minimize the tenants’ obligation to provide the landlord with a 60-day notice to terminate under Section 16 of the RTA.
  1. The Act, in general, requires parties to act in good faith in accordance with Rule A7. Further to this, it is an offense under Section 234(v) to provide the Board with false or misleading information. In all proceedings, there is a legal obligation for parties to provide truthful evidence while under oath. Documentary evidence signed by the tenants such as the binding offer to lease on May 25, 2019 is prime facie evidence of intent and not speculation.
  1. With respect to the tenants’ changes to their original submission that the landlord had sold her Bathurst Glen Drive property, the landlord submits that the evidence clearly shows that the landlord was in the process of selling her Bathurst Glen Drive property and due to a slow market, was not able to do so until many months after the tenants vacated the rental unit.
  1. With respect to Section 135.1 of the Act, the landlord submits that Bill 185, Subsection 135.1(5) Transition states,
This section applies with respect to an increase in rent even if it was first charged before the day the Protecting Tenants and Strengthening Community Housing Act, 2020 receives Royal Assent, provided the validity of the rent increase was to finally determined by the Board before that day.

 

  1. With respect to the remedy of rent differential and notwithstanding the landlord’s denial of any wrongdoing, it is respectfully submitted that the Board in considering the quantum of damages to be awarded to an aggrieved party should base its determination on the doctrine of betterment so as not to provide a party with a windfall when calculating damages. In the case at bar, the evidence is clear that the Centre Ave. property was of a substantially higher value than the Madawaska Ave. property.
  2. With respect to the issue of tenants’ assistance in renting the Madawaska property, it is submitted that on the balance of probabilities, the landlord’s testimony should be preferred over that of the tenants especially in light of the fact that the tenants resided in the rental unit during the month of June 2019 assisting the landlord with the showings and there was no evidence by the tenants challenging the evidence of the landlord.
  1. With respect to the tenants’ submission with respect to Section 57(5) and notwithstanding the landlord’s position that the email does not substantially comply with the requirements of a Section 48 notice, the landlord submits that her evidence with respect to her son’s occupancy should be accepted on the balance of probabilities. Further to this and on the balance of probabilities, a reasonable homeowner would not allow a property to remain unsecured and empty for months at risk for vandalism.
  1. The landlord repeats and relies on her submissions at 7 through 17 of the Landlord’s Responding Submissions. As admitted at page 5 of the Tenant’s Response Submissions, the alleged notice of termination had no specific date of termination as indicated as “60 days or 90 days”. It is also important to note that the “60 day or 90 days” notice referred to in the May 31, 2019 email related to the termination clause in the lease and not to Section 48(2) of the Act. The termination clause at Schedule “A” of the lease required the tenants to provide the landlord with not less than 60 days notice and states,
The Lessee shall have to give not less than sixty (60) days notice to the lessor of his intention to terminate or extend the lease, lessee acknowledges that the lease agreement cannot be terminated prematurely before the lease comes to an end and the sixty day calculated prior to the last day of the lease term.

As stated in the Landlord’s Responding Submissions, this was one of many elements that rendered the May 31, 2019 email ineligible as being in substantial compliance with the Section 48 requirements. Further to this, the intent of the email did not relate to Section 48 of the Act.

  1. With respect to the sequence of events it is submitted,
    1. There was no evidence of which party initiated the call and the landlord requested that the tenants provide her with their 60 day or 90 day notice in accordance with the lease agreement;
    2. The landlord trusted the tenants and thought that she was acting in the best interest of the tenants by complying with their request;
    3. The landlord provided a written request to the tenants asking them to provide her with their 60 day or 90 day notice of termination under the terms of the lease agreement;
    4. The tenants non-response to the landlord’s May 31, 2019 email is strange given the reasonable request by the landlord to accommodate the tenants’ request;
    5. The tenants signed a binding agreement to lease the Centre Ave. property on May 27, 2019 and the lease agreement was “finalized” on May 31, 2019 when the new landlord confirmed acceptance of the agreement.; and
    6. The tenants moved out on June 30, 2019 without any complaint whatsoever and being fully aware of their legal rights as

 

  1. ALL OF WHICH IS RESPECTFULLY SUBMITTEDDATE: July 28, 2021

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