Many agents come to our office with this problem. The agent has executed an Agreement of Purchase and Sale while there is a tenant on the premises and the purchaser wants vacant possession.
We were initially retained to defend a client on a matter of unauthorized transfer of tenancy.
We won our case but only because of technical legal issues that we were aware of and the other side was not.
What does the act say about unauthorized transfer of tenancies?
Subject to the act’s provisions, an unauthorized transfer means that the original tenancy remains. An ineffective transfer does not terminate original tenancy.
However, under Ontario’s Residential Tenancies Act, an unauthorized transfer provides the landlord with the opportunity to apply to the Landlord and Tenant Board for termination of the tenancy, or to negotiate a new tenancy agreement with the occupant.
Information provided is from Residential Tenancy in Ontario by Jack Fleming.
In Moss v. Wilson, the Ontario Rental Housing Tribunal (the ORHT) concluded that while it was prudent to get the landlord’s consent for assignment or sublet in advance, it was not essential. Obviously, this would be a risky way to proceed (as the decision points out). Technically, given the language of s. 95 (“with the consent of the landlord, a tenant may assign a rental unit”) there would not actually be a valid assignment until consent was given, but the adjudicator’s point was that there could be physical occupation (an unauthorized assignment or sublet) with the landlord’s consent subsequently sought.
What does the act say about consent of the landlord?
On the request of the tenant for consent to an assignment, the landlord may completely refuse to consent to the assignment of the rental unit or may refuse consent for assignment to a particular assignee.
With sublets, there is no provision for a general request for consent; there must be an identified potential subtenant. A landlord does not have the option of outright refusal of consent to a sublet; consent to a sublet may not be “arbitrarily or unreasonably” withheld.
Avi Rosen has been a real estate broker for nearly 50 years. He is also a paralegal with a legal focus on the real estate industry. For legal advice on real estate issues, call Avi at (416) 818-6130 or email avi@avirosen.ca.
