What if a landlord gives notice to terminate in bad faith: Reasonable Doubt

Here’s what happens if a landlord fails to take possession of a rental for their own use

I wrote previously about the ability of a landlord to terminate a tenant’s tenancy for the landlord’s own use. As I set out in that article, under section 48 of the Residential Tenancies Act, 2006 (RTA), a landlord may provide a tenant with notice to terminate the tenancy if the landlord, in good faith, requires possession of the rental unit for a period of at least one year for the purpose of residential occupation by the landlord, the landlord’s spouse, a child or parent of the landlord or the landlord’s spouse, or a person who will provide care services. The notice of termination must be given at least 60 days prior to its effective date, and may only be given if the tenancy is month-to-month or if the effective date of termination is the end date of the lease. The landlord must provide the tenant with either another rental unit that is acceptable to the tenant, or with compensation equal to one month’s rent.

The requirement that the landlord give the notice to terminate in good faith is of paramount importance. For this reason, if the landlord gives a notice to terminate in bad faith and then re-rents the unit or otherwise fails to take possession for the landlord’s own use, the RTA provides that the (now-former) tenant can bring an application to the Landlord and Tenant Board (LTB) and seek compensation for the bad-faith termination.

On such an application, the LTB will consider a) whether the landlord gave a notice to terminate for landlord’s own use, b) whether the tenant moved out of the unit as a result of having received the notice (or as a result of an LTB order terminating the tenancy arising out of the notice), and c) whether the person(s) named in the notice as requiring the unit for their own use failed to move into the unit within a reasonable period of time after the tenant vacated the unit. If the LTB is satisfied that the landlord gave the notice, the tenant moved out as a result of the notice (or a subsequent order), and the person(s) named in the notice failed to move into the unit within a reasonable period of time, the LTB may order that the landlord gave the notice in bad faith.

It should be noted that in 2017, the then-provincial government amended the RTA provisions dealing with these sorts of applications. Previously, a tenant bringing an application bore the entire burden of proving that the landlord gave the notice to terminate in bad faith. Now, however, if a landlord gives a notice to terminate for landlord’s own use and then engages in specified activity within the year after the tenant vacates the unit (including advertising the unit for rent or signing a lease for the unit with a new tenant), the landlord will be presumed to have given the notice in bad faith and will bear the burden of proving otherwise.

This presumption does not mean that a landlord will automatically be liable if the person(s) named in the notice fail to move into the unit after the tenant moves out. If the landlord has evidence of a material change in circumstances after the notice to terminate was given, and the LTB is satisfied that the landlord had a good-faith intention to take the unit for landlord’s own use at the time that the notice was given, the LTB can dismiss the tenant’s application despite the fact that the unit may have been rented to a new tenant.

If the LTB grants the tenant’s application, it has discretion as to the remedy that can be granted. The most commonly granted remedies are an order for the difference in rent between the unit vacated by the tenant and the tenant’s new unit for a period of one year (subject to adjustment if the tenant’s new unit is materially different from the previous unit), and the tenant’s reasonable out-of-pocket moving costs. The LTB may also order other remedies (example: an administrative fine), but these remedies are much less common.

Timothy Duggan is a condominium lawyer and civil litigator with Horlick Levitt Di Lella LLP. Reasonable Doubt appears on Mondays. You can contact him on Twitter at @timmyd_ and tell him what you would like to read about in future columns.

A word of caution: You should not act or rely on the information provided in this column. It is not legal advice. To ensure your interests are protected, retain or formally seek advice from a lawyer. The views expressed in this article do not necessarily reflect those of Horlick Levitt Di Lella LLP or the lawyers of Horlick Levitt Di Lella LLP.

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