2016 CanLII 100338 (ON LTB) | CEL-61051-16-RV (Re) | CanLII https://www.canlii.org/en/on/onltb/doc/2016/2016canlii100338/2016canl...

CEL-61051-16-RV (Re), 2016 CanLII 100338 (ON LTB)

Date: 2016-12-23
File number: CEL-61051-16-RV
Citation: CEL-61051-16-RV (Re), 2016 CanLII 100338 (ON LTB), <https://canlii.ca
/t/gxq6h>, retrieved on 2021-12-04

Order under Section 21.2 of the

Statutory Powers Procedure Act
and the Residential Tenancies Act, 2006

File Number: CEL-61051-16-RV

In the matter
of:

Between: HB Landlord

and

JG Tenants
PG

Review Order

H B (the 'Landlord') applied for an order to terminate the tenancy and evict J G and P G (the
'Tenants') because the Landlord has entered into an agreement of purchase and sale of the rental
unit and the purchaser requires possession of the rental unit for the purpose of residential
occupation (L2 application).

The L2 application was dismissed in order CEL-61051-16, issued on October 14, 2016.

On November 10, 2016, the Landlord requested a review of that order.

The Landlord’s review request was heard by way of a telephone hearing on December 22, 2016.

The Landlord, the Landlord's Legal Representative, K. M, and the Tenant's Legal Representative, S.
T, participated in the telephone hearing.

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Determinations and Reasons:

1. The basic facts of this case are undisputed. The Landlord entered into an agreement with his
employee and was supposed to transfer a half interest in the property to his employee. This
change or addition to title of a second owner was supposed to be completed on November 1,
2016.

2. The application was filed on September 15, 2016 prior to the planned change in title.

3. At the review hearing, it was confirmed that the sale of a half interest in the property or addition
to title did not occur. The employee does not want to buy a portion of the property unless he is
sure he can move into it. The Landlord's Legal Representative stated the planned sale of a half
interest in the property is on hold until the review request is resolved.

4. The Landlord argues that: the Member made a serious error in dismissing the application; the
Member misinterpreted section 49 of the Residential Tenancies Act, 2006 (the 'Act'); the
Member determined that there was a legitimate agreement of purchase and sale and once that
determination was made, the application should have been granted.

5. The applicable portion of section 49 of the Act states:

49. (1) A landlord of a residential complex that contains no more than three residential units
who has entered into an agreement of purchase and sale of the residential complex may, on
behalf of the purchaser, give the tenant of a unit in the residential complex a notice
terminating the tenancy, if the purchaser in good faith requires possession of the residential
complex or the unit for the purpose of residential occupation by,
(a) the purchaser;

6. The Member’s decision to dismiss the application was reasonable in the unique circumstances
of this case.

7. Both the Landlord's Legal Representative and the Tenant's Legal Representative agreed that
they were not aware of any prior or precedent cases where section 49 of the Act was relied
upon to terminate a tenancy where there was not a sale of the full property but only the addition
of a second owner to the title.

8. At the review hearing it was confirmed that the purchase price for the half interest in the
property would be secured by a promissory note. The employee would not be required to pay
the Landlord any amount at the time of the “sale”. This reinforces the unique circumstances of
this “sale”.

9. The Member referred to section 202 of the Act in the order. That section states that the Board
must ascertain the real substance of the transaction and may disregard the outward form of the
transaction.

10. The real substance of the transaction between the Landlord and his employee despite the
outward form of the agreement is that the Landlord never intended to “sell” the property as a
whole. He would remain an owner. There would just be an addition to the title.

11. This is similar to the situation that would occur if a person added their spouse to the title of the
property. There is no actual sale of the property in that situation.

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Paragraph 16 of the order states:

12.

Subsection 49(1) of the Act allows a landlord to obtain vacant possession of a rental unit on
behalf of a person who is purchasing the rental unit. It is intended to apply when the landlord is
‘stepping away’ from being the landlord under an agreement of purchase and sale. In other
words, the landlord transfers ownership of a rental property to a purchaser, and is no longer
the landlord of the rental property. Subsection 49(1) is meant for a purchaser who “steps in” for
the outgoing landlord, and then seeks possession of the unit for personal use.

13. The Member’s determination in paragraph 16 of the order that section 49 of the Act was
intended to apply to a situation where the property was fully sold and the Landlord would no
longer be the owner of the property is a reasonable interpretation of section 49. Since the
property has not been sold, the requirements of section 49 have not been met.

14. Reasonable determinations and interpretations of the Act are not interfered with on review.

15. As argued by the Landlord's Legal Representative, section 48 of the Act could apply if the
Landlord’s employee ever becomes an owner of the property. Then, as an owner, he could
serve a N12 notice of termination based on his own required use of the rental unit. However,
the current L2 application and more particularly the current N12 notice were premature. They
were served before he became an owner so section 48 cannot be relied on.

16. Since the initial October 4th hearing, the planned addition of an additional owner to title that
was supposed to take place on November 1st has not occurred. Therefore, the employee is still
not an owner of the property and it is unknown at this time when or if he ever will become an
owner.

17. The Landlord and the employee seem to want a guarantee that the employee will be permitted
to move into the rental unit before they go ahead with the “sale”. There is no guarantee. Even
an actual owner may not get the eviction order they are hoping for since it is mandatory for the
Board to consider relief from eviction under section 83 of the Act.

18. Even if the review were granted and I interpreted section 49 in a different manner than the
hearing Member, relief from eviction under section 83 of the Act would be granted in the current
circumstances of this case. The potential addition of a second owner to title is tentative and
uncertain at this point in time.

It is ordered that:

1. The Landlord’s review request is denied.

2. Order CEL-61051-16, issued on October 14, 2016, is confirmed and remains unchanged.

December 23, 2016 _______________________

Date Issued Karen Wallace
Vice Chair, Landlord
and Tenant Board
Central-RO
3 Robert Speck Pkwy, 5th Floor
Mississauga ON L4Z2G5

If you have any questions about this order, call 416-645-8080 or toll free at 1-888-332-3234.

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