Bad Faith: What Happens Now?
Transcript
Introduction
Welcome to Landlord’s Self-Help Centre’s module Bad Faith: What happens now? The information offered in this presentation is intended as general information, it is not legal advice. If you need more information, please contact a legal service provider. For detailed information about the forms, please refer to the other Landlord Learning modules.
Residential Tenancies Act, 2006
In Ontario, the Residential Tenancies Act is the provincial law that governs most residential rental agreements. It defines the rights and responsibilities of both landlords and tenants and outlines appropriate reasons for giving a notice of termination. It also establishes offences such as bad faith evictions and sets out various penalties landlords may face.
The RTA includes provisions for the termination of a rental agreement when the landlord or a purchaser in good faith requires the unit for the landlord’s or purchaser’s own use, or the residential use of an immediate family member. As well as when a landlord needs to do renovations or repairs, demolition or conversion of a rental unit.
Security of Tenure
The Residential Tenancies Act gives tenants security of tenure which means that a tenant can continue to occupy the rental unit until:
- The tenant gives notice to terminate;
- The landlord and the tenant agree to terminate the tenancy; or
- The landlord gives notice to end the tenancy for a reason allowed by the Act.
Unlawful Removal, Eviction or Lockout
Landlords can only terminate a tenancy in accordance with the rules in the Residential Tenancies Act. If a landlord illegally evicts or locks a tenant out of the rental unit, they can be fined under the Residential Tenancies Act and they may face more fines under the Provincial Offences Act.
Notice Requirements
It’s important to be aware of the requirements of a notice of termination. Just because a tenant is provided with a notice, does not mean they will vacate the rental unit by the termination date. Tenants are entitled to question the notice. Landlords should file an application with the Landlord and Tenant Board if they are not sure whether the tenant will vacate on their own.
Landlord’s Own Use
Landlord’s own use means that the rental unit is required for the residential use by
- The landlord or landlord’s spouse,
- A child or parent of the landlord or their spouse, or
- A person who will provide care services to one of these individuals
Good Faith: Landlord’s Own Use
When landlords try to terminate a tenancy for own use, suspicions are raised because this ground is commonly used inappropriately. If an application is filed with the Landlord and Tenant Board, landlords are assumed to be making this application in bad faith and have to convince the board otherwise.
When serving notice to end tenancy for landlord’s own use, it is important that there be good faith. Good faith is requiring to move into the rental unit for residential purposes for at least 1 year. Landlords are also required to notify the Landlord and Tenant Board of any N12 or N13 notices they have given for the same or different rental unit within the last two years. Non-compliance means the Landlord and Tenant Board can refuse the application.
This notice should not be served to a tenant because there has been a breakdown in the relationship, or because the rent is too low. If this happens, a tenant can file a T5 application against a former landlord for bad faith within 12 months of the date they moved out.
The landlord is also required to pay the tenant compensation in an amount equal to 1 month’s rent or offer the tenant another unit that the landlord owns that is acceptable to the tenant.
Purchaser’s Own Use
Purchaser’s own use means that when a unit is sold, the landlord can give a notice of termination on behalf of a purchaser if the rental unit is required for residential use by
- The purchaser or their spouse,
- A child or parent of the purchaser or their spouse, or
- A person who will provide care services to one of these individuals
Good Faith: Purchaser’s Own Use
Before giving a notice for purchaser’s own use,
- The landlord must have a signed purchase and sale agreement,
- The property can only contain three units or less, and
- The purchaser or their immediate family member or caregiver, in good faith, must require the rental unit for their own personal occupation
The landlord is also required to pay the tenant compensation in an amount equal to 1 month’s rent or offer the tenant another unit they own that is acceptable to them.
When serving notice to end tenancy for purchaser’s own use, it is important that is in good faith. Good faith is requiring to move into the rental unit for residential purposes. Landlords are also required to notify the Landlord and Tenant Board of any N12 or N13 notices they have given for the same or different rental unit within the last two years. Non-compliance means the Landlord and Tenant Board can refuse the application.
Demolition, Renovation/Repairs, Conversion
If N13 form is given to the tenant because a landlord intends to do repairs or renovations, the tenant is given the right of first refusal, and is able to move back into the unit once the repairs and renovations are complete. The tenant must give notice in writing of their intent to reoccupy the rental unit before they move out of the unit. If the tenant provides proper notice and the landlord does not allow the tenant to move back into the unit, they can be facing steep fines.
Good Faith: Demolition, Renovation/Repairs, Conversion
Good faith is also required when providing notice for the demolition, renovation or repair, or conversion of a rental unit. Landlords must comply with the compensation requirements of the notice and allow the tenant the right of first refusal in certain situations. Read the notice carefully to make sure you understand all the legal requirements before providing it to your tenant.
This notice should not be served to a tenant because there has been a breakdown in the relationship, or because the rent is too low. If this happens, a tenant can file a T5 application against a former landlord for bad faith within 2 years of the date they moved out.
Bad Faith
Landlords should not serve the N12 or N13 notice to a tenant simply because they are experiencing problems with that tenant and believe this is the easiest method to ask the tenant to leave. This is a common mistake landlords make which can lead to serious consequences.
A tenant can file a T5 application within 1 year of the date they moved out of the rental unit when given the N12 in bad faith and within 2 years of the date they moved out of the rental unit when given the N13 in bad faith.
Bad Faith Orders
The landlord can be facing steep fines by the Landlord and Tenant Board if they are found to have acted in bad faith. A Landlord and Tenant Board order may require the landlord to pay the former tenant’s increase in rent for up to 1 year, reasonable out-of-pocket expenses and an abatement of rent. In addition to, general compensation equivalent to 12 months of the last rent charged to the former tenant. The Board can order anything they feel is appropriate under the circumstances.
Offences and Penalties
It is an Offence for a landlord to obtain possession of a rental unit improperly by giving a notice to terminate in bad faith.
A landlord who is guilty of an offence under the RTA is liable to a fine of up to $50,000 for individuals and $250,000 for corporations.
What happens now?
There is no formal way to retract a N12 or N13 notice. Make sure you understand and are prepared to follow all the required legal conditions, whether or not you file an application with the Landlord and Tenant Board.
If you served an N12 or N13 and your plans change, try writing a letter explaining the change to the tenant and inform them that they can continue to live in the rental unit. If it’s too late because the tenant signed a new lease somewhere else, offer them more compensation for the trouble and ask that they sign an agreement that they will not take further action against you for the specific rental unit.
If the tenant doesn’t agree and relies on the N12 or N13 notice they were provided, they may file an application against you at the Landlord and Tenant Board for bad faith.
Conclusion
Thank you for watching this module about bad faith. The information offered in this presentation is intended as general information, it is not legal advice.
If you have a specific issue or situation, please contact a legal service provider.