Last Updated: , 73 days ago.
Can a tenant refuse the landlord’s one-month compensation for an own-use eviction to avoid having to move in Ontario?
In Ontario, a tenant generally cannot frustrate an own-use eviction under the Residential Tenancies Act, 2006 by refusing or not accepting the mandatory one-month compensation. Section 48.1 (and related provisions for purchaser’s notices under sections 49 and 49.1) require the landlord to compensate the tenant when terminating for residential occupation for at least one year, and tribunals treat a landlord’s good-faith attempt to deliver the compensation (including commonly an offered e-transfer) as sufficient even if the tenant does not actually receive or cash it. For example, in Thambiappah v Subramanian, 2021 CanLII 110523 (ON LTB), the Landlord’s discharge of the compensation obligation was upheld where tenants refused to accept payment, because allowing a refusal to control the outcome would let tenants “perpetually frustrate” the own-use process. If you are dealing with a notice and compensation issue in Ontario, DefendCharges.ca™ can help you understand your options and next steps, call (647) 559-3377.
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What Does the Law Say About a Tenant Purposely Avoiding the Receipt of Own Use Eviction Compensation From the Landlord?
The Law Precludes a Tenant From Frustrating the Own Use Eviction Process By Avoiding Receipt of the Mandatory Compensation From the Landlord.
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Understanding the Presumption of Acceptance When Monies Are Provided Despite a Failure to Accept By Tenant
A tenant is unable to frustrate the own use eviction process by refusing to accept the mandatory compensation payable by the landlord. Essentially, when a landlord attempts to provide the mandatory compensation, the attempt will be deemed sufficient to satisfy the eviction process requirements despite that the monies were without actual receipt by the tenant.
The Law
The Residential Tenancies Act, 2006, S.O. 2006, Chapter 17, prescribed the mandate that a landlord compensate a tenant by a payment equal to one month of rent in circumstances where the landlord is evicting a tenant for the purpose of enabling the landlord, or certain family members of the landlord, to take up residence within the rental unit occupied by the tenant. This condition also applies if the landlord is selling the property and the rental unit will be occupied by the new property owner. Specifically, the Residential Tenancies Act, 2006, states:
Notice, landlord personally, etc., requires unit
48 (1) A landlord may, by notice, terminate a tenancy if the landlord in good faith requires possession of the rental unit for the purpose of residential occupation for a period of at least one year by,
(a) the landlord;
(b) the landlord’s spouse;
(c) a child or parent of the landlord or the landlord’s spouse; or
(d) a person who provides or will provide care services to the landlord, the landlord’s spouse, or a child or parent of the landlord or the landlord’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located.
Same
(2) The date for termination specified in the notice shall be at least 60 days after the notice is given and shall be the day a period of the tenancy ends or, where the tenancy is for a fixed term, the end of the term.
Earlier termination by tenant
(3) A tenant who receives notice of termination under subsection (1) may, at any time before the date specified in the notice, terminate the tenancy, effective on a specified date earlier than the date set out in the landlord’s notice.
Same
(4) The date for termination specified in the tenant’s notice shall be at least 10 days after the date the tenant’s notice is given.
Application
(5) This section does not authorize a landlord to give a notice of termination of a tenancy with respect to a rental unit unless,
(a) the rental unit is owned in whole or in part by an individual; and
(b) the landlord is an individual.
Compensation, notice under s. 48
48.1 A landlord shall compensate a tenant in an amount equal to one month’s rent or offer the tenant another rental unit acceptable to the tenant if the landlord gives the tenant a notice of termination of the tenancy under section 48.
Notice, purchaser personally requires unit
49 (1) A landlord of a residential complex that contains no more than three residential units who has entered into an agreement of purchase and sale of the residential complex may, on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession of the residential complex or the unit for the purpose of residential occupation by,
(a) the purchaser;
(b) the purchaser’s spouse;
(c) a child or parent of the purchaser or the purchaser’s spouse; or
(d) a person who provides or will provide care services to the purchaser, the purchaser’s spouse, or a child or parent of the purchaser or the purchaser’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located.
Same, condominium
(2) If a landlord who is an owner as defined in clause (a) or (b) of the definition of “owner” in subsection 1 (1) of the Condominium Act, 1998 owns a unit, as defined in subsection 1 (1) of that Act, that is a rental unit and has entered into an agreement of purchase and sale of the unit, the landlord may, on behalf of the purchaser, give the tenant of the unit a notice terminating the tenancy, if the purchaser in good faith requires possession of the unit for the purpose of residential occupation by,
(a) the purchaser;
(b) the purchaser’s spouse;
(c) a child or parent of the purchaser or the purchaser’s spouse; or
(d) a person who provides or will provide care services to the purchaser, the purchaser’s spouse, or a child or parent of the purchaser or the purchaser’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located.
Period of notice
(3) The date for termination specified in a notice given under subsection (1) or (2) shall be at least 60 days after the notice is given and shall be the day a period of the tenancy ends or, where the tenancy is for a fixed term, the end of the term.
Earlier termination by tenant
(4) A tenant who receives notice of termination under subsection (1) or (2) may, at any time before the date specified in the notice, terminate the tenancy, effective on a specified date earlier than the date set out in the landlord’s notice.
Same
(5) The date for termination specified in the tenant’s notice shall be at least 10 days after the date the tenant’s notice is given.
Compensation, notice under s. 49 (1) or (2)
49.1 (1) A landlord shall compensate a tenant in an amount equal to one month’s rent or offer the tenant another rental unit acceptable to the tenant if,
(a) the landlord gives the tenant a notice of termination of the tenancy on behalf of a purchaser under subsection 49 (1) or (2); and
(b) the notice of termination is given on or after the day the Protecting Tenants and Strengthening Community Housing Act, 2020 receives Royal Assent.
Obligation under subs. (1)
(2) Despite section 18, the obligation to compensate the tenant under subsection (1) remains an obligation of the landlord who gives the notice of termination of the tenancy on behalf of the purchaser and does not become an obligation of the purchaser.
If a tenant refuses to accept the mandatory compensation or engages in any effort to thwart the payment by the landlord, the tenant will be unable to rely on the failure of the payment as a means to avoid the eviction process. Essentially, the tenant is unable to argue that the eviction process should be denied due to failure of the landlord to provide the required payment to the tenant. The law deems that the attempt by the landlord to provide the payment to the tenant is sufficient and the unwillingness to properly receive the money is an attempt to frustrate the legal process by the tenant. This issue was specifically addressed in the case of Thambiappah v Subramanian, 2021 CanLII 110523, as follows:
16. I find that the Landlord has discharged its obligation to pay compensation to the Tenants. Tenants who are subject to a valid application under s. 48 cannot frustrate the Landlord’s good faith efforts to take possession of the unit by refusing to accept compensation. Refusing to accept an e-transfer is akin to failing to cash a cheque, it is open to a tenant to do so but it does not mean that the Landlord has failed to pay the required compensation. A finding to the contrary would allow a Tenant to perpetually frustrate the Landlord’s attempts under s. 48 be continually refusing to accept payment. However, I am aware that some e-transfer services remit the funds back to the sender if they are not accepted within a certain time period. Should that happen here, I expect the Landlord to take reasonable steps to ensure that the compensation is provided to the Tenants.
Summary Comment
Although the law requires that a landlord seeking to evict a tenant for own use of the landlord or certain family members of the landlord, or perhaps a buyer of the property, provide compensation equal to one month of rent to the tenant, the tenant is unable to frustrate the eviction process by failing to accept the compensation from the landlord.
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