LTB Order LTB-T-055567-22

O. under Subsection 135 Residential Tenancies Act, 2006 2023 ONLTB 72095 (CanLII) Citation: DEMELO-MALLEY v B. L., 2023 ONLTB 72095 Date: 2023-11-09 File Number: LTB-T-055567-22 In the matter of: 310, 323 NIAGARA BOULEVARD FORT ERIE ONTARIO L2A3H1 Tenant Between: A. DEMELO-MALLEY A. L. B. L. A. DEMELO-MALLEY (the 'Tenant') A. F. an O. D. T. B. L., Bonnie Hoy, A. Cheryl Carpenter (the 'Landlords') collected or retained money illegally. This application was heard by videoconference on August 8, 2023. The following attended the hearing: • Tenant’s Legal Representative Jennifer Priestley • The Tenant • Bonnie Hoy • Cheryl Carpenter • Russell Preddie, legal representative F. Cheryl Carpenter At 9:13 a.m. the attendees met privately to establish the roles of Ms. Carpenter A. Ms. Hoy. As of approximately 9:30 a.m., L. B. L. was not present or represented although properly served with notice of this hearing by the LTB. There was no record of a request to adjourn the hearing. As a result, the hearing proceeded with only the Tenant's evidence. Determinations: 1. I have used the term “Tenant” throughout the O. F. ease of reference, although, as found below, there was never in fact a L.-tenant relationship entered into by the parties. 2. At the outset of the hearing, it was determined T. Bonnie Hoy is not a L. party to the proceeding as she is the owner of a temporary staffing agency T. supplied an employee to B. L.’s property management company. Cheryl Carpenter is an employee of Bonnie Hoy’s agency working as a temporary employee of the L.’s property management company A. is not a L.. The application is amended to remove them as parties. Ms. Hoy, Ms. Carpenter, A. Mr. Preddie were excused from the hearing. O. Page 1 of 5  File Number: LTB-T-055567-22 3. As explained below, the Tenant proved the allegations contained in the application on a balance of probabilities. Therefore, the L. must pay to the Tenant $1,483.72 which represents the $1,400.00 deposit plus interest thereon plus the application filing fee of $53.00. 2023 ONLTB 72095 (CanLII) Illegal charge collected 4. The Tenant submitted a completed rental application on June 5, 2022 to a representative of the leasing agent (Ms. Carpenter). He provided a $1,400.00 bank draft made payable to B. L. on June 6, 2022 F. the last month’s rent deposit as requested. 5. The Tenant testified T. by June 9, 2022 he had not received a response from the L. as to whether his application had been approved. He spoke with Ms. Carpenter by phone A. stated T. he was withdrawing his application A. requested the return of the $1,400.00. He stated T. he was told T. his deposit would not be returned, A. it has not been returned as of the date of the hearing. 6. The Tenant submitted into evidence a text message conversation with Ms. Carpenter where she informs him T. “F. sure” the $1,400.00 will not be returned A. when asked why, states “Like anywhere you put money down thats a deposit A. you don’t get it back even if you were not approved T.’s the law [sic].” 7. The Tenant’s Legal Representative stated T. she contacted Ms. Carpenter by telephone, A. after a “heated” discussion, Ms. Carpenter again refused to return the deposit A. then did not return further calls. The Tenant’s Legal Representative stated T. she spoke with Ms. Hoy A. the result was “not favourable.” She stated T. she was not told T. there was someone else who she should contact about the matter. 8. The lease application submitted into evidence by the Tenant states: I/We agree to provide the L. with a Last Month’s Rent Deposit in certified funds T. is equal to the total rent amount mentioned in the application…. I/We further agree A. acknowledge T. the L.’s acceptance of the deposit does not constitute a tenancy agreement…. I/We further understand T. upon the approval A. acceptance of the Rental Application by the L., I/we shall be deemed to have entered into a Tenancy Agreement with the L.…. [A.] agree T. upon acceptance of this Rental Application by the L., the aforesaid contract shall be deemed a Rent Deposit A. shall be A. towards the rent of the last month of the tenancy…. [emphasis added] Analysis 9. The relevant provisions of the Residential Tenancies Act, 2006 (“Act”) are as follows: 13(1) The term or period of a tenancy begins on the day the tenant is entitled to occupy the rental unit under the tenancy agreement. (2) A tenancy agreement takes effect when the tenant is entitled to occupy the rental unit, whether or not the tenant actually occupies it. .  File Number: LTB-T-055567-22 ... 105(1) The only security deposit T. a L. may collect is a rent deposit collected in accordance with section 106. (2) In this section A. in section 106, 1. “security deposit” means money, property or a 2023 ONLTB 72095 (CanLII) right paid or given by, or on behalf of, a tenant of a rental unit to a L. or to anyone on the L.’s behalf to be held by or F. the account of the L. as security F. the performance of an obligation or the payment of a liability of the tenant or to be returned to the tenant upon the happening of a condition. 106(1) A L. may require a tenant to pay a rent deposit with respect to a tenancy if the L. does so on or before entering into the tenancy agreement. ... 107(1) A L. shall repay the amount received as a rent deposit in respect of a rental unit if vacant possession of the rental unit is not given to the prospective tenant. ... 134(1) Unless otherwise prescribed, no L. shall, directly or indirectly, with respect to any rental unit, (a) collect or require or attempt to collect or require from a tenant or prospective tenant of the rental unit a fee, premium, commission, bonus, penalty, key deposit or other like amount of money whether or not the money is refundable 135(1) A tenant or former tenant of a rental unit may apply to the Board F. an O. T. the L., superintendent or agent of the L. pay to the tenant any money the person collected or retained in contravention of this Act or the Tenant Protection Act, 1997. (2) A prospective tenant may apply to the Board F. an O. under subsection (1). Pursuant to subsection 107(1) of the Residential Tenancies Act, 2006 (the “Act”), “A L. shall repay the amount received as a rent deposit in respect of a rental unit if vacant possession of the rental unit is not given to the prospective tenant.” 10. In Musilla v. Avcan Management [2010] ONSC 5425, the Divisional Court found T. a tenancy agreement had been entered into when the rental application was accepted by the L.. 11. I find T. the Divisional Court decision of Benedetto v. Cleland, Jamal A. Krochak (May 15, 2006) Toronto Docket No.325/05 (Div. Ct) re: TST-08299 is also on point. In T. matter, the tenants A. F. an O. D. T. the L. had collected or retained money illegally. The tenants had given the L. a rent deposit. When the tenants could not obtain a guarantor, as required by the L., they found another unit to rent. The tenants asked the L. to return their rent deposit, but he refused. The (then) Tribunal found T. the Tenant Protection Act, 1997 (TPA), s. 188.1(1) (which is nearly identical to current subsection 107(1) of the Act) A. in these circumstances as the L. did not give the tenants vacant possession of the rental unit. .  File Number: LTB-T-055567-22 12. The Tenant in this application submitted T. as a tenancy agreement was never executed, there was never a L.-tenant relationship, A. the L. is therefore illegally retaining the Tenant’s money. 13. I agree with the Tenant’s position. While a submitted rental application T. has been accepted by 2023 ONLTB 72095 (CanLII) the L. may in certain situations constitute a binding tenancy agreement T. is not the case here. The wording of the rental application, which was drafted entirely by the L., clearly provides T. the parties will enter into a written tenancy agreement should the application be accepted, A. the acceptance of the deposit “does not constitute a tenancy agreement.” 14. Based on the Tenant’s uncontested evidence, his application was never approved (which is why he withdrew his application). As the Tenant never signed a written tenancy agreement, the Tenant was never given keys to the rental unit, A. had no legal right to occupy the rental unit at any time. Therefore, the Tenant was never given possession of the rental unit, A. the L. is required to return the monies in accordance with subsection 107(1) A. 135(2) of the Act. The reason why the Tenant chose to abandon the application prior to signing the tenancy agreement is not relevant. This analysis is consistent with the decision in Benedetto. 15. I therefore find T. the L. collected a charge which is not allowed by the Residential Tenancies Act, 2006 (the 'Act'). It is ordered T.: 1. The total amount the L. shall pay the Tenant is $1,483.72. This amount represents: o $1,400.00 F. the illegal charge collected. o $30.72 F. interest owing F. the period June 6, 2022 to August 8, 2023 o $53.00 F. the cost of filing the application. 2. The L. shall pay the Tenant the full amount owing by November 20, 2023. 3. If the L. does not pay the Tenant the full amount owing by November 20, 2023, the L. will owe interest. This will be simple interest calculated from November 21, 2023 at 7.00% annually on the balance outstanding. 4. The Tenant has the right, at any time, to collect the full amount owing or any balance outstanding under this O.. November 9, 2023 ____________________________ Date Issued Margo den Haan Member, L. 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. .