LTB Order LTB-L-017473-22

2023 ONLTB 66094 (CanLII) Order under Section 69 Residential Tenancies Act, 2006 Citation: Foglight Investments Inc. v F., 2023 ONLTB 66094 Date: 2023-10-10 File Number: LTB-L-017473-22 In the matter of: B, 466 CLINTON AVE SUDBURY ON P3B2S4 Between: Fo glight Investments Inc. Landlord And A.F. Tenant Foglight Investments Inc. (the 'Landlord') applied for an order to terminate the tenancy and evict A.F. (the 'Tenant') because the Tenant did not pay the rent that the Tenant owes. This application was heard by videoconference on August 30, 2023. The Landlord’s agent, Alison Chinn (‘AC’), the Landlord’s legal representative, Angie Gravelle (‘AG’), the Tenant, and the Tenant’s legal representative, Jonathan Wong (‘JW’), attended the hearing. Determinations: 1. The Landlord served the Tenant with a valid Notice to End Tenancy Early for Non-payment of Rent (N4 Notice). The Tenant did not void the notice by paying the amount of rent arrears owing by the termination date in the N4 Notice or before the date the application was filed. 2. As of the hearing date, the Tenant was still in possession of the rental unit. 3. There was dispute as to the correct lawful rent. 4. The Tenant said that the rental unit is in a house with one unit in the basement, one unit on the main floor, and on the second floor there are three rooms, one of which he rents. He said there are no tenants in the two other rooms on the floor, but there have been in the past. There is a shared kitchen, bathroom, and living space. Order Page 1 of 8  File Number: LTB-L-017473-22 5. The Tenant said his rent is $400.00 per month. To support his position, he presented the original application form for the unit. The application form was signed on July 26, 2018, and states the rent was $400.00. He said that there is no written tenancy agreement. The tenancy commenced prior to the current Landlord purchasing the property. The Tenant also presented a rent receipt from his former landlord confirming that the Tenant was paying 2023 ONLTB 66094 (CanLII) $400.00 per month in 2018. 6. The Tenant said that at some point, one of the three tenants on his floor had moved out, and one other was rented to another tenant. The Tenant and the other tenant made an agreement with the former landlord whereby the two tenants would have access to the third room for storage purposes and the Tenant and other tenant would each pay an additional $100.00 per month. The Tenant said that the other tenant wanted to store some items in the third room, and the Tenant agreed to pay the extra $100.00 per month for the third room because he did not want there to be a third tenant on the floor. 7. The Tenant could not recall exactly when this agreement was made, but said it was about 6 months before the current Landlord took over the property. He said he used the additional room from the Summer of the year the agreement was made into the Winter. He thought it was in 2018 or 2019, but was certain it was before the current Landlord took over. The current Landlord purchased the property in December 2020 (see below). Based on this and the Tenant’s evidence, I find that it is most likely that the agreement was made in the Summer of 2020, which is about 6 months before the current Landlord took over. 8. The Tenant referred to an email chain that had been filed by the Landlord. This was an email chain between the Tenant and an employee of the Landlord’s property manager. On May 27, 2021, the Tenant sent an email to the employee stating that he does not have a written agreement to confirm, but he described this arrangement. 9. The Tenant also referred to a form entitled “Tenant Acknowledgement”, which he signed. It is not dated, but he said that someone who he did not know attended the unit and asked him to sign it. The form says the rent is $500.00 per month. The Tenant said he understood that this was in reference to the $400.00 in rent originally agreed to plus the $100.00 per month for the extra room. The Tenant said he told this person that the monthly rent was not accurate, but the person said not to worry about it. The Tenant said he signed the acknowledgement because he did not think it was anything official or important, and there were several errors in the form. 10. The Tenant also referred to an email chain with the Landlord’s property manager where the property manager mistakenly believed the rent was $450.00 per month plus $50.00 for the additional room (as opposed to $400.00 + $100.00). 11. The Tenant also presented a series of lease statements from the current Landlord’s property manager. These statements show that the Landlord was charging, and the Tenant was paying, $400.00 per month from January 2021 to July 2021. Then beginning August 2021 the landlord began charging $500.00 per month, and the Tenant continued paying $400.00. The rent charged then increased to $506.00 in January 2022 (this would be a Order Page 2 of 8  File Number: LTB-L-017473-22 guideline increase from $500.00). These statements were emailed to the Tenant each month. 12. On cross examination, the Tenant acknowledged that he was paying the former landlord $500.00 per month. 2023 ONLTB 66094 (CanLII) 13. The Tenant also said the third room has not been rented to another tenant since he first paid the extra $100.00 per month, it has just been a “junk room” full of items from the other tenant, who has now moved out. 14. I asked the Tenant if there was ever an explicit agreement with the former landlord or current Landlord that the Tenant would stop paying the additional $100.00 and no longer have access to the additional room. He said there was not. 15. AC gave evidence for the Landlord. She said the Landlord purchased the property in December 2020. She said she did not receive a written lease from the former landlord for the Tenant’s tenancy, but presented a statement of adjustments from the closing of the sale, which indicates the Tenant’s rent was $500.00. 16. AC acknowledged that the Landlord was charging $400.00 per month from January to July 2021. She said this was an error, and it was corrected in August 2021, when the Landlord began charging $500.00 per month. She said she realized the mistake in July 2021, and advised the property manager of it, and they began charging $500.00 per month at that time. 17. AG argued that the rent claimed in the N4 notice and L1 application is correct, and the lawful rent at the time the Landlord took over the property was in fact $500.00. $400.00 per month was charged for 7 months, but this was an error that was corrected. She noted that $400.00 was not charged for 12 months, so it was not deemed to be the lawful rent under section 136(1) of the Act. 18. She submitted that the Tenant was only paying the $400.00 per month for these 7 months because that is what was erroneously identified in the monthly statements that the Landlord’s property manager was sending the Tenant. 19. JW argued that the agreement by the Tenant to pay the former landlord an additional $100.00 per month for use of an additional room was a collateral contract, and once the Tenant ceased deriving a benefit from the arrangement, he stopped paying the extra $100.00. He argued that this was an ad hoc agreement. He submitted that the rent charged claimed in the N4 notice is incorrect, because the lawful monthly rent was $400.00 when the Landlord took over in January 2021. This would mean the rent charged listed in the N4 notice would be too high, rendering it defective, and that the rent increases taken by the Landlord since would be unlawful, because they build on an initial monthly rent of $500.00. 20. Section 202 of the Act mandates the LTB, when making findings on an application, to ascertain the real substance of all transactions and activities relating to a residential complex or rental unit, and the good faith of the participants, and in doing so, the LTB may Order Page 3 of 8  File Number: LTB-L-017473-22 disregard the outward form of a transaction, and may have regard to the pattern of activities relating to the residential complex or the rental unit. 21. I find that the real substance of the agreement between the Tenant, his former landlord, and the third tenant whereby the Tenant would pay an additional $100.00 per month for access to and use of an additional room was not a collateral agreement that is extricable 2023 ONLTB 66094 (CanLII) from the tenancy. I find that it was in substance an agreement to increase the rent by $100.00 per month in exchange for the former landlord adding a prescribed service, facility, privilege, accommodation or thing with respect to the Tenant’s occupancy of the rental unit, pursuant to section 123 of the Act. “Lockers or other storage space” and “floor space” are both prescribed as things to which an agreement under section 123 of the Act may apply: s. 16, O. Reg. 516/06. 22. I accept that the Tenant’s original rent was $400.00. When he made this agreement with the former landlord, the rent increased to $500.00 per month. This remained the rent until it was lawfully changed. For the rent to have gone back down to $400.00 per month, the Landlord and the Tenant (or the former landlord and Tenant) would have had to agree that the Landlord (or former landlord) would cease to provide access to or use of the other room. In that case, the Landlord (or former landlord) would have been obliged to reduce the rent back to $400.00 per month pursuant to section 125 of the Act. This did not happen, and there was no other evidence of any other agreement between the Tenant and the Landlord or former landlord to reduce the rent from $500. 23. This is supported by the fact that the statement of adjustments lists the rent as $500.00 per month. 24. I agree with AG’s argument that the Landlord erroneously charging $400.00 for 7 months does not change the lawful rent, because it did not happen for 12 months: s. 136 of the Act. 25. The rent for the entire year of 2021 was $500.00 per month, as reflected in the N4 notice. In January 2022, the rent increased to $506.00, which is in line with a permitted guideline increase for 2022. In January 2023, the rent increased to $518.65, which is in line with a permissible guideline increase for 2023. 26. The lawful rent is $518.65. It is due on the 1st day of each month. 27. Based on the Monthly rent, the daily rent/compensation is $17.05. This amount is calculated as follows: $518.65 x 12, divided by 365 days. 28. The Tenant has paid $6,900.00 to the Landlord since the application was filed. 29. The rent arrears owing to August 31, 2023 are $3,421.20. 30. The Landlord incurred costs of $186.00 for filing the application and is entitled to reimbursement of those costs. Order Page 4 of 8  File Number: LTB-L-017473-22 31. The Tenant raised issues under section 82 of the Act, alleging that the Landlord entered the rental unit illegally. The parties agreed to resolve this issue by the Tenant being granted a $100.00 rent abatement. 32. The Tenant is entitled to an abatement of rent of $100.00. This amount will be deducted from the amount owing to the Landlord. 2023 ONLTB 66094 (CanLII) 33. The Landlord collected a rent deposit of $450.00 from the Tenant and this deposit is still being held by the Landlord. The rent deposit can only be applied to the last rental period of the tenancy if the tenancy is terminated. 34. Interest on the rent deposit, in the amount of $35.61 is owing to the Tenant for the period from July 31, 2018 to August 30, 2023. Relief from Eviction 35. The Tenant said his current income is approximately $730.00 per month from Ontario Works. He said if his rent is increased, they will not increase this payment. He said he has no savings. He does not think he could pay monthly rent of $518.65. He said he could likely pay $400.00 per month plus normal increases from that amount. 36. The Tenant said he has looked for other housing, but there is not much available at this price point, and that if evicted, he may have to move away. 37. The Tenant said the wait for subsidized housing in Sudbury is 2 years as far as he knows. 38. AG did communicate with the Tenant and JW, requesting that they reach out to her to discuss a payment plan, to no avail. 39. AG requested an order terminating the tenancy 11 days after this order is issued. JW argued that such an order is not appropriate in this case. He said the earliest the termination date should be is November 30, 2023. 40. The circumstances of this case are unique, and the Tenant’s circumstances warrant the eviction date being postponed. It is clear that a conditional payment plan would not be feasible, and one was not proposed. 41. The Tenant said he can likely not afford to pay the current rent. It is possible he could find a way to earn some additional income to make it work. The larger issue is the rent arrears. In the circumstances of this case, I find it is not unfair to postpone eviction until November 30, 2023. This will give the Tenant time to reach out to social or charitable agencies to seek help securing the funds to void this order if he wishes, or to find other suitable living accommodation. 42. I have considered all of the disclosed circumstances in accordance with subsection 83(2) of the Residential Tenancies Act, 2006 (the 'Act'), and find that it would not be unfair to postpone the eviction until November 30, 2023 pursuant to subsection 83(1)(b) of the Act. It is ordered that: Order Page 5 of 8  File Number: LTB-L-017473-22 1. The tenancy between the Landlord and the Tenant is terminated unless the Tenant voids this order. 2. The Tenant may void this order and continue the tenancy by paying to the Landlord or to the LTB in trust: 2023 ONLTB 66094 (CanLII) • $4,444.50 if the payment is made on or before October 31, 2023. See Schedule 1 for the calculation of the amount owing. OR • $4,963.15 if the payment is made on or before November 30, 2023. See Schedule 1 for the calculation of the amount owing. 3. The Tenant may also make a motion at the LTB to void this order under section 74(11) of the Act, if the Tenant has paid the full amount owing as ordered plus any additional rent that became due after November 30, 2023 but before the Court Enforcement Office (Sheriff) enforces the eviction. The Tenant may only make this motion once during the tenancy. 4. If the Tenant does not pay the amount required to void this order the Tenant must move out of the rental unit on or before November 30, 2023 5. If the Tenant does not void the order, the Tenant shall pay to the Landlord $2,914.44. This amount includes rent arrears owing up to the date of the hearing and the cost of filing the application. The rent deposit and interest the Landlord owes on the rent deposit and the rent abatement/rebate awarded to the Tenant are deducted from the amount owing by the Tenant. See Schedule 1 for the calculation of the amount owing. 6. The Tenant shall also pay the Landlord compensation of $17.05 per day for the use of the unit starting August 31, 2023 until the date the Tenant moves out of the unit. 7. If the Tenant does not pay the Landlord the full amount owing on or before October 14, 2023, the Tenant will start to owe interest. This will be simple interest calculated from October 15, 2023 at 7.00% annually on the balance outstanding. 8. If the unit is not vacated on or before November 30, 2023, then starting December 1, 2023, the Landlord may file this order with the Court Enforcement Office (Sheriff) so that the eviction may be enforced. 9. Upon receipt of this order, the Court Enforcement Office (Sheriff) is directed to give vacant possession of the unit to the Landlord on or after December 1, 2023. October 10, 2023 ____________________________ Date Issued Mark Melchers Member, Landlord and Tenant Board Order Page 6 of 8  File Number: LTB-L-017473-22 15 Grosvenor Street, Ground Floor Toronto ON M7A 2G6 If you have any questions about this order, call 416-645-8080 or toll free at 1-888-332-3234. 2023 ONLTB 66094 (CanLII) In accordance with section 81 of the Act, the part of this order relating to the eviction expires on June 1, 2024 if the order has not been filed on or before this date with the Court Enforcement Office (Sheriff) that has territorial jurisdiction where the rental unit is located. Schedule 1 SUMMARY OF CALCULATIONS A. Amount the Tenant must pay to void the eviction order and continue the tenancy if the payment is made on or before October 31, 2023 Rent Owing To October 31, 2023 $11,258.50 Application Filing Fee $186.00 NSF Charges $0.00 Less the amount the Tenant paid to the Landlord since the - $6,900.00 application was filed Less the amount the Tenant paid into the LTB since the - $0.00 application was filed Less the amount the Landlord owes the Tenant for - $100.00 an{abatement/rebate} Less the amount of the credit that the Tenant is entitled to - $0.00 Total the Tenant must pay to continue the tenancy $4,444.50 B. Amount the Tenant must pay to void the eviction order and continue the tenancy if the payment is made on or before November 30, 2023 Rent Owing To November 30, 2023 $11,777.15 Application Filing Fee $186.00 NSF Charges $0.00 Less the amount the Tenant paid to the Landlord since the - $6,900.00 application was filed Less the amount the Tenant paid into the LTB since the - $0.00 application was filed Less the amount the Landlord owes the Tenant for - $100.00 an{abatement/rebate} Less the amount of the credit that the Tenant is entitled to - $0.00 Total the Tenant must pay to continue the tenancy $4,963.15 C. Amount the Tenant must pay if the tenancy is terminated Order Page 7 of 8  File Number: LTB-L-017473-22 Rent Owing To Hearing Date $10,214.05 Application Filing Fee $186.00 NSF Charges $0.00 Less the amount the Tenant paid to the Landlord since the - $6,900.00 2023 ONLTB 66094 (CanLII) application was filed Less the amount the Tenant paid into the LTB since the - $0.00 application was filed Less the amount of the last month's rent deposit - $450.00 Less the amount of the interest on the last month's rent deposit - $35.61 Less the amount the Landlord owes the Tenant for an - $100.00 {abatement/rebate} Less the amount of the credit that the Tenant is entitled to - $0.00 Total amount owing to the Landlord $2,914.44 Plus daily compensation owing for each day of occupation starting $17.05 August 31, 2023 (per day) Order Page 8 of 8