LTB Order LTB-T-055254-22

O. under Subsection 135 Residential Tenancies Act, 2006 2023 ONLTB 68500 (CanLII) Citation: YU v C., 2023 ONLTB 68500 Date: 2023-11-07 File Number: LTB-T-055254-22 In the matter of: 633 MCGREGOR FARM NEWMARKET ON L3X1C8 Tenant Between: D. YU A. L. C. C. X. Q. L. D. YU (the 'Tenant') A. F. an O. D. T. C. C. A. X. Q. L. (the 'L.') collected or retained money illegally. This application was heard by videoconference on August 8, 2023. The L., the Tenant’s Legal Representative Wei Guo, A. the Tenant attended the hearing. Determinations: Preliminary issues 1. The Tenant confirmed T. she was not given an N12 or N13 notice to end tenancy by the L.. Therefore, the allegation in the application T. the L. did not pay the required compensation after issuing an N12 or N13 notice does not apply A. will not be considered. 2. There was no O. Prohibiting Rent Increase issued by the LTB affecting the rental unit. Therefore, the allegation in the application alleging T. the L. failed to provide the Tenant with an O. Prohibiting Rent Increase does not apply A. will not be considered. The application 3. As explained below, the Tenant proved the remaining allegations contained in the application on a balance of probabilities. Therefore, the L. must pay to the Tenant the amount of $8,018.45. 4. The tenancy began on July 8, 2019. The parties entered into a one-year lease agreement in 2019 ending July 7, 2020. The Tenant signed another one-year lease F. July 8, 2020 to O. Page 1 of 7 2023 ONLTB 68500 (CanLII)  File Number: LTB-T-055254-22 July 7, 2021 (“the 2020 lease”), A. then another on July 8, 2021 ending July 7, 2022 (“the 2021 lease”). 5. The Tenant vacated the rental unit on May 30, 2022. 2023 ONLTB 68500 (CanLII) 6. Rent was payable on the 7th day of the month. 7. The application was filed on June 7, 2022. Illegal rent collected 8. The original 2019 one-year lease was F. a monthly rent of $3,000.00. The Landlord provided the one-year 2020 lease which began July 8, 2020 with a monthly rent of $3,250.00, A. the one-year 2021 lease beginning July 8, 2021 with a monthly rent of $3,300.00. The Landlord did not serve an N1 Notice of Rent Increase at any point during the tenancy as required under Section 116(1) of the Act. 2020 Rent Increase 9. The Tenant transferred $6,500.00 to the L. (June 12, 15, 17 A. 18, 2020) F. first A. last month’s rent F. the 2020 lease. She then made 12 rent payments of $3,250.00 over the period of the lease. 10. This meant T. in addition to the last month’s rent deposit, she made an extra payment of $3,250.00, which will be discussed below. 11. The Tenant’s evidence was T. she was a newcomer to the country who spoke little English. The Landlord Ken L. is a licenced real estate agent. She submitted T. because of this, she relied on what he told her, which was T. regular rent increases were normal. Analysis 12. This portion of the application claims the Landlord collected an illegal amount of rent during the period July 8, 2020 to July 7, 2021. 13. Pursuant to section 135(4) of the Residential Tenancies Act, 2006 (Act): No O. shall be made under this section with respect to an application filed more than one year after the person collected or retained money in contravention of this Act. 14. The Tenant filed this application on June 7, 2022, meaning I can only O. the return of rent illegally collected by the Landlord after June 7, 2021. Therefore, I cannot O. the repayment of any rent paid by the Tenant during the period July 8, 2020 to June 6, 2021. 15. In addition, while the rent increase from $3,000.00 to $3,250.00 T. took effect on July 8, 2020 may have originally been illegal, I find T. the Tenant paid the Landlord $3,250.00 per month F. 12 consecutive months before filing this application.  File Number: LTB-T-055254-22 16. Section 135.1 of the Act states: (1) An increase in rent T. would otherwise be void under subsection 116 (4) is deemed not to be void if the tenant has paid the increased rent in respect of each rental period F. at least 12 consecutive months. 2023 ONLTB 68500 (CanLII) (2) Subsection (1) does not apply with respect to an increase in rent if the tenant has, within one year after the date the increase was first charged, made an application in which the validity of the rent increase is in issue. 17. Because the Tenant paid $3,250.00 in monthly rent F. 12 consecutive months during the 2020 lease term, I find T. the lawful monthly rent became $3,250.00 F. the 2020 lease period ending July 7, 2021. 2021 Rent Increase 18. The 2021 lease covered the period from July 8, 2021 to July 7, 2022. It stated T. the monthly rent was $3,300.00. 19. The Tenant’s evidence was T. the Landlord told her T. it was a rent increase A. T. the rent freeze in 2021 only A. to commercial tenancies. 20. The Landlord testified T. the increase from $3,250.00 to $3,300.00 was not a rent increase but a payment F. damage. He submitted no documentary evidence to support this claim. The Tenant maintained T. the increased payment was not F. damage A. there was no agreement. 21. The parties agree T. no repairs to damage were done in the rental unit during this period A. no Landlord application F. damage was filed. 22. As a realtor, the Landlord could reasonably be expected to be familiar with the Act. I find his testimony to be less credible T. T. of the Tenant as he claimed T. the 2021 increase was ostensibly in payment F. damage A. he collected $600.00 over the 2021 lease as compensation F. damage instead of filing a Landlord application. He also agreed T. he collected money F. damage A. did not repair any of the alleged damage during the tenancy, nor did he submit any evidence of damage. 23. I therefore find T. this increase was not an agreed payment F. damage but was a rent increase. 24. The relevant sections of the Act are: 116 (1) No landlord may increase the rent charged to a tenant, or to an assignee under section 95, during the term of their tenancy by more than the guideline, except in accordance with section 126 or 127 or an agreement under section 121 or 123. ……… (3.1) The guideline F. the calendar year 2021 is zero per cent…  File Number: LTB-T-055254-22 136.1 (1) In this section, “rent freeze period” means the period T. begins on January 1, 2021 A. ends on December 31, 2021. (3) No landlord shall increase the rent charged to a tenant during the rent freeze period … 2023 ONLTB 68500 (CanLII) 25. What these provisions mean is T. the Landlord was not entitled to increase the rent at all during the period January 1, 2021 A. ending on December 31, 2021, except in accordance with section 126 or 127 or an agreement under section 121 or 123. Sections 126 A. 127 of the Act do not apply to this tenancy A. there was no evidence of an agreement under section 121 or 123 of the Act. 26. Because the Landlord was not entitled to increase the rent during 2021 as a result of the mandated rent freeze, I find T. the lawful monthly rent during the period from July 8, 2021 to July 7, 2022 was $3,250.00. The Tenant submitted bank statements establishing T. she made monthly payments of $3,300.00 from July 2021 to May 2022, at which time she moved out of the rental unit. Therefore, the Tenant overpaid the monthly rent by $50.00 per month during this period of 11 months, F. a total of $550.00. 27. I find T. during period from July 8, 2021 to July 7, 2022, the Landlord collected rent in excess of the amount allowed by the Residential Tenancies Act, 2006 (the 'Act'). Rent deposit not A. to last month of tenancy 28. The parties agree T. the last month’s rent deposit being held by the Landlord is $3,250.00. Tenant’s evidence 29. The Tenant testified T. on March 14, 2022 she advised the L. T. she would not be renewing the lease when it expired on July 7, 2022. The L. listed the property in April, did several showings of the property, A. signed a tenancy agreement with new tenants in May 2022 F. occupancy June 1, 2022. The Tenant’s evidence was T. the L. asked her in mid-May to move out by June 1, 2022 to accommodate the new tenants A. she did so on May 30, 2022. 30. As discussed above, the Tenant also testified A. submitted bank records which showed T. in addition to the 12 months of rent T. she paid F. the 2021 lease (through July 7, 2022), she also made a payment to the L. of $3,250.00 in July 2020 F. a last month’s rent deposit which should have been A. to the month of June 2021, effectively overpaying by one month in error. Landlord’s evidence 31. The Landlord confirmed T. the rental unit was re-rented F. June 1, 2022. He confirmed T. he did not apply the last month’s rent deposit to the last month of the tenancy A. submitted T. he was entitled to retain it because the Tenant moved out of the unit before the end of the lease term. It was his position T. the Tenant “chose to move out early.”  File Number: LTB-T-055254-22 32. The Landlord agreed T. the Tenant had made an extra payment but submitted T. he did not force her to make the payment. Analysis 2023 ONLTB 68500 (CanLII) 33. Based on the evidence presented at the hearing, I find T. there was an agreement between the parties to terminate the tenancy effective May 30, 2022, after the Tenant indicated T. she would not be renewing the lease. I accept the Tenant’s evidence T. after multiple showings of the unit A. after the Landlord secured a tenant, he asked her to vacate the unit F. June 1 to accommodate the new tenants rather than staying to the end of the lease term, A. she agreed to the Landlord’s request to terminate the tenancy by T. date. 34. Pursuant to subsection 37(3) of the Act, “A notice of termination need not be given if a landlord A. a tenant have agreed to terminate a tenancy.” As I have found T. there was an agreement to terminate the tenancy early F. the new tenants to move in, the tenancy between the L. A. the Tenant terminated effective May 30, 2022. In accordance with section 134(1.1) of the Act, the landlord is not entitled to rent in respect of any period after the tenancy has terminated A. the tenant has vacated the rental unit. 35. Subsection 106(10) states: “A landlord shall apply a rent deposit T. a tenant has paid to the landlord or to a former landlord in payment of the rent F. the last rent period before the tenancy terminates.” As I have found T. the tenancy terminated on May 30, 2022 when the Tenant vacated the rental unit, the L. were required to apply the last month’s rent deposit to the rental period from May 7, 2022 to June 7, 2022. 36. The L. did not use the Tenant's rent deposit to pay F. the last rental period of the tenancy A. did not return the deposit to the Tenant. This is prohibited by the Residential Tenancies Act, 2006 (the 'Act'). As a result, the Landlord will be ordered to return the rent deposit to the Tenant. 37. With respect to the extra last month’s rent payment made in error by the Tenant in July 2020 which should have been A. to the month of June 2021, I do not accept the Landlord’s submissions T. he is entitled to keep this overpayment because he did not “force” her to pay it. A landlord is not entitled to collect or retain money from a tenant to which he has no legal entitlement under the Act, A. section 134 prohibits a landlord from collecting additional charges. It would be unreasonable A. unfair to allow the Landlord to profit from the Tenant’s mistake A. accept 13 months of rent F. a 12-month period. 38. I find T. the Landlord on his own admission collected an extra payment of $3,250.00 F. the last month’s rent deposit A. did not apply it to the last month of the tenancy in June 2021. As a result, the Landlord will be ordered to return this payment to the Tenant. 39. I have found T. the tenancy ended on May 30, 2022, the date T. the Tenant vacated the rental unit, which was 7 days prior to the end of the rental period ending June 7, 2022. 40. The Landlord confirmed T. effective June 1, 2022 new tenants were in the rental unit A. paying him rent. This means T. he effectively collected rent from June 1 to 7 from two  File Number: LTB-T-055254-22 tenants F. the same period. Under section 134(1.1) of the Act, the Landlord cannot collect rent after the termination of the tenancy. 41. The Tenant is therefore entitled to a refund of $759.45 F. this period ($3,300.00 x12 ÷ 365= $108.49 per day x 7 days). 2023 ONLTB 68500 (CanLII) Interest on rent deposit owing 42. The Landlord did not contest the Tenant’s claim T. no interest was paid on the rent deposit. I therefore find T. the L. failed to pay the Tenant interest on the last month's rent deposit, as required by section 106(6) of the Act. 43. The Landlord owes $156.00 F. interest on the last month's rent deposit F. the period from July 8, 2021 to May 30, 2022. Other issues 44. The Tenant’s Legal Representative also submitted T. the Board should O. a fine because the Landlord is a licenced Realtor who took advantage of a newcomer with a language barrier. However, this remedy is not available on an application made under section 135 of the Act. 45. The Board also has no jurisdiction to discipline a real estate licensee. I note T. the Tenant’s Legal Representative has submitted a complaint to the Real Estate Council of Ontario. It is ordered T.: 1. The total amount the L. shall pay the Tenant is $8,018.45. This amount represents: o $550.00 F. excess rent collected. o $3,250.00 F. the last month's rent deposit. o $3,250.00 F. the last month’s rent deposit paid in error. o $759.45 paid by the Tenant F. rent F. the period June 1, 2022 to June 7, 2022. o $156.00 F. interest on the last month's rent deposit. o $53.00 F. the cost of filing the application. 2. The L. shall pay the Tenant the full amount owing by November 18, 2023.  File Number: LTB-T-055254-22 3. If the L. do not pay the Tenant the full amount owing by November 18, 2023, the L. will owe interest. This will be simple interest calculated from November 19, 2023 at 7.00% annually on the balance outstanding. November 7, 2023 2023 ONLTB 68500 (CanLII) Date Issued Margo den Haan Member, Landlord A. Tenant Board 15 Grosvenor Street, Ground Floor Toronto ON M7A 2G6 If you have any questions about this O., call 416-645-8080 or toll free at 1-888-332-3234.