N12- Terminating a Tenancy for Purchaser’s Own Use

Transcript

Introduction

Welcome to Landlord’s Self-Help Centre’s module about terminating a tenancy for purchaser’s own use.  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.

Landlord’s Own Use 

Landlord’s own use means that the rental unit is required for the residential use by:

  • The landlord or their spouse;
  • A child or parent of the landlord or their spouse; or
  • A person who will provide care services to one of these individuals.

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.

When to serve the N12

There are important differences between the two notices for own use. With respect to landlord’s own use, a landlord can only provide a tenant with this notice if:

The landlord or their immediate family member or a caregiver, in good faith, requires the rental unit for their own personal occupation, and

The person moving into the unit intends to live there for at least one year.

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 rest of this module will focus exclusively on purchaser’s own use.

Residential Tenancies Act, 2006

Before serving a notice to your tenant, make sure you have grounds to do so.  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.

Security of Tenure

All tenants have security of tenure which means that the tenants are entitled to continue to live in the rental unit after the initial term ends.

The tenancy can only be terminated in 3 ways:

  • The tenant gives notice to terminate the tenancy;
  • The landlord and tenant agree to terminate the tenancy; or
  • The landlord gives a notice to end the tenancy for a reason permitted under the Residential Tenancies Act, and the tenant moves out, or if the tenant does not move out, the landlord applies to the Landlord and Tenant Board and obtains an eviction order.

Purchaser’s Own Use

To recap, the landlord can give a notice of termination of the rental agreement if the rental unit is required in good faith for the residential occupation by specific individuals.

If giving this notice for a caregiver, the caregiver must be living in the same building as the person receiving care services. For example, if you have a duplex and you need one unit for a caregiver, the person receiving the care services must be living in the other unit of this same duplex.

A notice of termination for own use cannot be given to the tenant 

  • If the property has more than three units;
  • Occupation is not required by one of the eligible individuals 
  • It is being given on behalf of extended family members such as a brother, cousin, aunt or grandparent (it can only be given for the individuals listed on the notice); or
  • There is a fixed-term lease still in place.

Good Faith

When serving notice to end tenancy for purchaser’s own use, it is important that there be good faith. Good faith is having a genuine intention to occupy the rental unit for residential purposes.

Once Bill 184, Protecting Tenants and Strengthening Community Housing Act, 2020 is proclaimed, landlords will also be required to notify the Landlord and Tenant Board of any N12 or N13 notices they have given for the same of different rental unit. 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.

What is the N12 notice?

Form N12 is a notice to end the tenancy that can be given to the tenant if the rental unit is required for residential use by someone such as a landlord, purchaser, or caregiver.

Make sure to use the most up to date forms which can be found on the Landlord and Tenant Board website, and take into consideration the length of time it will take to evict the tenant.

Monthly Tenancy

If your tenancy is on a month to month basis, Form N12 can be given at any time after a purchase and sale agreement is signed, but the termination date must match with the end of a rent period.

Be careful of the rent due date as this will affect the termination date. 

For example, if rent is due on the 15th of the month and you give notice to the tenant on March 15th, this means the termination date on the form should be May 14th.

Fixed-term Lease

If you have a fixed-term tenancy, a notice of termination for own use can be given at any time after a purchase and sale agreement is signed, but the termination date must match with the end of the term.

For example, you have a lease ending December 31, 2020.  You have to honour the lease term and can serve this notice to the tenant by the end of October for a termination date of December 31st.

N12 Notice for Landlord’s Own Use

This is what the N12 notice looks like, in the next few slides, we will go through a section at a time. 

The Landlord and Tenant Board website has links to instructions for many of their notices and applications, so make sure to read through them and use them to help you fill out the forms.

N12 Notice for Purchaser’s Own Use: Names & Address

When listing tenants, include names of those who are identified on your tenancy agreement as tenants, or in the case of verbal tenancies, include names of only those who have been paying the rent. If your tenant uses a nickname, include both their legal name and their nickname. 

If you have a joint tenancy (2 or more tenants together on one agreement) make sure to include all their names. The same applies with landlords, include full names of all landlords for a rental unit. Do not list the purchaser’s name on this notice.

Clearly define the rental unit. It is very important for the address of the unit to include the full address and specify exactly where the tenant is living, such as the main floor, basement or a unit number.

N12 Notice for Purchaser’s Own Use: Termination Date

The termination date must be at least 60 days and coincide with the end of a rent period or the end of a fixed term if there is a lease.

With this example, rent is due on the 15th of the month and this N12 notice was provided on March 5th, therefore the termination is listed as May 14th.

It’s important to note that the notice becomes void if the landlord does not apply to the Board within 30 days of the termination date.  In the example used in the presentation, the N12 notice would expire June 15th if the landlord has not filed with the Board.

N12 Notice for Purchaser’s Own Use: Reason

Make sure the reason selected is the proper reason and indicate who will be moving into the unit. 

N12 Notice for Purchaser’s Own Use: Signature

The notice should be signed by the landlord, and not the purchaser.  If the landlord has hired a lawyer or paralegal and they are serving the notice on the landlord’s behalf then it can be signed by the legal representative.  The date next to the signature should be the date the N12 notice is given or sent to the tenant.

N12 Notice: Important Information

Carefully read the Important Information section on page 2 of the notice and make sure you understand everything before serving this notice to your tenant(s).

Note that when giving this notice, the landlord must make sure the purchaser is willing to be involved in the process as they will have to fill out a Declaration or Affidavit and attend the hearing.

Tenant’s Rights after Being Served

If the tenant disagrees with the notice they don’t have to respond and they do not have to move out of the rental unit unless the Landlord and Tenant Board orders them to.

The tenant is also given the option of ending the tenancy earlier by providing at least 10 days’ notice in writing using the N9.

If the tenant decided to move out, the tenancy ends on the date they move out of the rental unit.

How can you serve the N12?

Make sure to deliver the notice to the tenant according to the Landlord and Tenant Board Rules or this will result in you having to start the process all over again.

The most common ways to give this notice is by handing it to the tenant, placing it in the tenant’s mailbox as long as a key is not required to access it, or sliding it under the door of the rental unit.

It is important to note this notice should NEVER be posted on the tenant’s door. Do NOT deliver this notice by email or text message as these are NOT proper methods of service.

‘Cancelling’ a N12 Notice

Before serving a N12 notice, make sure the person set to move into the rental unit is prepared to live there for at least one year. It’s not possible to cancel this notice once it is given to the tenant. Write them a letter to explain the change and inform them that they can disregard the N12 and continue to live in the rental unit.

However, if you are trying to ‘cancel’ the notice but it’s too late because the tenant signed another tenancy agreement and is moving out, you will still have to provide compensation. There is still a chance that the tenant files an application against you at the Landlord and Tenant Board for bad faith and tries to sue you for up to $50,000. This amount is up to $250,000 for corporations.

Offences and Penalties

If the tenant moves out according to the notice, and before you file an application with the Landlord and Tenant Board, the individual on the notice is still required to live in the property full-time.  

If this doesn’t happen and the tenant finds out, they have one year from moving out of the rental unit to file a bad faith application with the Landlord and Tenant Board and sue their former landlord for up to $50,000 (up to $250,000 for corporations). There is also the possibility of a landlord getting charged under the Provincial Offences Act and having to face additional penalties.

Recent changes to the law by Bill 184: Providing Compensation 

Changes to the law as of July 21, 2020 require that a landlord now compensate the tenant an amount equal to one month’s rent by the termination date on the N12 notice or offer the tenant another rental unit that is acceptable.

If paying compensation, the full amount must be paid to the tenant on or before the termination date listen on the N12 notice. The landlord risks the dismissal of their application at the Board and having to start the process all over again if it is not paid by this deadline.

If offering another rental unit, it must be a unit which is owned by the same landlord who is giving the tenant the notice.

Gather information & educate yourself

It is very important that you do your research to make sure this process is appropriate for your situation.  If you serve your tenants with an incorrect notice, it can cause other problems for you down the road.  

Use resources found on the Landlord and Tenant Board, and Landlord’s Self-Help Centre websites to help guide you through the proper process.

Conclusion Thank you for watching this module about the N12 notice to end your tenancy for purchaser’s own use. This information is also available in video format.

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.