A recent Ontario Divisional Court decision has sought to clarify conflicting decisions and provide guidance as to the obligations of tenants when their landlords terminate their lease early.
In the case at issue the landlord received a number of noise complaints from neighbours about the tenant in question.
The landlord served a Notice to Terminate a Tenancy Early (Form N5) on the tenant. The notice followed the standard N5 format and provided:
(a) that the tenant must move out before Jan. 31, 2015;
(b) that the tenant had substantially interfered with the reasonable enjoyment of the residential complex by the landlord or another tenant;
(c) that the excessive noise must stop immediately;
(d) that if the problem was corrected within seven days the notice would be void and the tenant would not have to move out; and
(e) that if the tenant did move out by Jan. 31, 2015 that the tenancy would end on that date.
The tenant handed the keys over to the landlord on Jan. 31, 2015. On Feb. 2, 2015, the landlord entered the unit and found it to be vacant.
The landlord sued the tenant for, among other things, three months worth of rent, one month of hydro and the cost of cleaning, repairing and advertising the unit.
The trial judge dismissed the claim and the landlord appealed to the Divisional Court. The Divisional Court upheld the decision and dismissed the appeal.
The Divisional Court made it clear that where the landlord serves a Notice to Terminate a Tenancy Early the tenant has a right to terminate the tenancy if they move out by the termination date and the landlord has no right to claim prospective rent after the termination date.
This decision is a cautionary tale for landlords. In this case the landlord appears to have inserted the move out date without giving much consideration to the consequences of what would happen if the tenant did in fact move out on that date. As a result, the landlord was left with a vacant unit that needed to be re-let.
The landlord may have been better served if they had selected a move out date that was farther into the future. If the tenant failed to correct the behaviour within seven days the landlord could then apply for an eviction order for a future date and begin showing the unit to prospective new tenants in advance of the eviction date, thus eliminating one month of vacancy.
Matt Maurer is an accomplished trial and appellate lawyer with nearly a decade of experience advocating on behalf of his clients. He is a regular contributor to print and online media publications on issues pertaining to real estate disputes and issues affecting the practice of law and access to justice. He is with Minden Gross LLP in Toronto. Contact him by email or call 416-369-4322.
