A panel of three Divisional Court judges in Ontario has
overturned a decision of the Landlord and Tenant Board (LLTB) and
ruled that a landlord is prohibited from terminating the tenancy
relationship with his tenant until she dies.
The landlord and tenant are brother and sister. In 2006 they
entered into a tenancy agreement that permitted the sister to live
in the brother's basement for the rest of her life in exchange
for $500 per month in rent. The written tenancy agreement
explicitly stated that the tenancy was not for a fixed term.
In 2014 the brother attempted to terminate the tenancy because
he wanted his daughter to be able to occupy the basement. This
would normally be permissible under section 49 of the Residential
Tenancies Act, 2006 provided that the tenancy had reached the end
of its term.
The sister refused to vacate and an application was brought to
the LLTB. It ruled that the written agreement was badly flawed due
to the inherent contradiction in the agreement. On one hand the
agreement stated that it was not for a fixed term. On the
other hand the term was in fact fixed, given that it was defined as
being the lifetime of the sister.
In light of this contradiction, the LLTB ruled that the written
tenancy agreement had to be disregarded and decided to construe the
agreement as an indefinite monthly tenancy agreement. Based on this
ruling, the LLTB allowed the brother to terminate the tenancy.
The Divisional Court judges saw things much differently on
appeal. They held that the words "not a fixed term" could
easily have meant that the parties understood those words to mean
that the exact length of the term of the tenancy could not be
calculated because it was "for life". The court held that
the tenancy was indeed for a fixed term and that the term was
"for life". The Divisional Court held that the LLTB
decision was unreasonable insofar that it imposed an indefinite
tenancy as opposed to a fixed term tenancy.
The Divisional Court went on to hold that a tenancy for a fixed,
lifetime term does not violate the provisions of the act and that
the various termination options would be available to the brother
at the end of the term (when the sister died).
Absent this decision being overturned by the Ontario Court of
Appeal, landlords (and family members) ought to be very wary about
entering into lifetime term tenancy agreements.
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