Tenant Screws Landlord, and So Does the System

A recent decision from the Divisional Court provides an outrageous, and perfect example of how the legal system in the Province allows residential tenants to live rent free for over a year, and in this case, close to a year and a half.

The landlord originally applied to the Landlord and Tenant Board (the “Board”) for an order terminating the tenancy and evicting the tenant on the grounds that she had failed to pay her rent.

The first hearing was scheduled for April 8, 2013. That hearing was adjourned at the tenant’s request and was rescheduled to June 7, 2013.

When June 7th rolled around the tenant sought, and obtained, another adjournment and the hearing was rescheduled to August 14, 2013.

Both of the adjournments were sought by the tenant under the guise of obtaining more time to do certain things to assist her case (obtain documents etc.). As the Divisional Court noted, she never ended up doing any of these things.

On August 14, 2013, the tenant sought a third adjournment. The Board finally put its foot down and decided that four months of delay had been enough. The Board refused to grant another adjournment.

The Board ordered the tenant out by August 26, 2013, unless she were to void the order by paying the amount of $2,126.78 (the back rent that was owed) to the Board in Trust or to the landlord directly.

Finally, some justice for the landlord…

Not. So. Fast.

The tenant didn’t leave and she didn’t pony up the rent. Instead she appealed to the Divisional Court and the Board’s eviction order was stayed in the interim.

The Divisional Court heard the appeal almost a year later, on June 10, 2014. The tenant raised two grounds of appeal. First, she alleged that she did not receive a fair hearing before the Board. Second, she alleged that she had made partial payment of rent and that accordingly the amount that she was ordered to pay, $2,126.78, was too high.

The Divisional Court found the appeal to have no merit on either ground. Sensing defeat, the tenant tried a new angle and raised, for the first time, allegations that the landlord improperly entered her unit and distrained her property in 2008! The Divisional Court refused to entertain that argument.

The Divisional Court dismissed the appeal and the stay of the Board’s order was lifted. Justice at last for the landlord, but not before one final kick in the pants.

The landlord sought its partial indemnity costs of the appeal of just under $17,000. Meaning that the landlord’s actual legal costs must have been north of $25,000. The landlord, as a corporation, was legally required to be represented by counsel. The tenant on the other hand acted for herself throughout.

The Divisional Court stated that the appeal raised “relatively simple issues” and noted that the tenant is “of very modest means”. It also noted that the “amount of rent arrears in issue was merely $2,100”. The Divisional Court ruled that the legal fees sought were both excessive and disproportionate to the issues raised and awarded the landlord a measly $2,500 in costs.

Now, who’s interested in purchasing a rental property in Ontario?

Comments

  1. I’m wondering on what basis was she arguing that the cost she was ordered to pay was too high. Were the terms of the costs not agreed upon prior, at the time the leases was signed?

    In any regards, this sounds incredibly unfortunate for the landlord.

  2. This was very unfortunate for the landlord, and it certainly appears that the tenant did screw the landlord in this case. But on the basis of a single case, it would be an unreasonable leap to go from there to assuming that the whole system of adjudicating landlord and tenant disputes somehow screws landlords. This assertion is simply not borne out by the evidence. A 2011 report released by the Federation of Rental Housing Providers of Ontario (http://www.frpo.org/documents/Justice%20Denied%20Feb%2020112.pdf) also called on the province to speed up the eviction process. However, it acknowledged some interesting facts. Only 4.5% of tenants in the province fall behind on their rent. Of these, another 1.5% get caught up before any legal proceedings can be initiated (that is, they pay within 2 weeks of the initial notice for unpaid rent). Thus only about 3% of tenants actually get taken to the Landlord & Tenant Board for unpaid rent. That sounds a lot like a province-wide rent recovery rate of an astounding 97%! The recovery rate might well be even higher since many tenants get caught up on rental arrears even after an eviction application has been filed. Given then that this recovery rate for landlords is higher than that for most other businesses (what lawyer can say they recover 97% of their fees?), why wouldn’t more people be interested in purchasing rental property in Ontario?

    The report also indicates that the typical non-payment of rent case takes about 60 days to resolve from the point of non-payment to the issuance of an eviction order. It can be a further 30 days before the Court Enforcement Office can enforce the eviction order, but that delay is generalized to our legal and enforcement system, and not one specific to landlord and tenant adjudication.

    As a lawyer that represents tenants, most of my cases involve landlords screwing tenants. I have a few files right now where tenants were illegally locked out of their units without any due process, and it takes weeks – sometimes months – before such tenants can be returned to possession of their homes. I have an ongoing divisional court appeal at the moment dealing with an illegal lockout that took place in 2010!

    As they say, it rains on the just and unjust alike. Perhaps the system screws landlords and tenants alike. Only screwed landlords get put out of pocket, while screwed tenants get put out of their homes and face homelessness, and cost us far more as a society in terms of dealing with the economic and human costs of homelessness.

  3. Shibil,

    Not to point out the obvious, but the fact that 97% of tenants pay their rent in a (relatively) timely fashion doesn’t say much (one way or the other) about the efficacy of the Landlord Tenant Board, really they can only be judged on how they deal with the 3%.

    Moreover, it’s entirely possible that the system screws both landlords AND tenants. The fact that that it might take 4 years to deal with a bad landlord or cost a landlord $25,000 to collect $2,100 worth of unpaid rent, which costs won’t be recovered. speaks poorly of the whole system.

  4. Hi Bob:

    I apologize if my original point was unclear. In pointing out the 97% rent recovery rate I was not commenting on the efficacy of the Landlord & Tenant Board at all, but simply on the efficacy of being a landlord. It was in response to the rhetorical question posed at the conclusion of the article.

    My comment also suggested, as you do, that its quite possible the system screws both landlords and tenants. But that is not a conversation furthered by an article that relies only on a single outlier case.

  5. Why did this appeal proceed to a hearing in the first place? Its quite clear the appeal is frivolous, why was there no motion to dismiss? Why was there no motion to have the stay lifted? Why was there no motion to have payment made into the court? Maybe there were good reasons for all of this. But reading the decision, it doesn’t sound like the court got it wrong. It sounds like a case of the landlord failing to obtain timely and quality legal advice.

  6. The problem with the LTB is that it is EXTREMELY tenant friendly. This case being a prime example. Why is an adjournment ever granted during a hearing to discuss NON-PAYMENT OF RENT!?! Either a tenant has paid rent, or they haven’t.

    Also important to note if there are extenuating circumstances, such as loss of employment or medical issues, is that the LTB hearing takes place often a month after a notice to terminate tenancy is sent by a landlord. Thus for tenants willing to take responsibility for their circumstances, there’s plenty of time to make partial payments, or work out a suitable exit strategy.

    On the reverse side of things, if landlords are not following the laws, they too should be held accountable for their actions.