Category: Residential Real Estate

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Residential Real Estate

Husband Granted Possession of Home After Wife Fails to List It for Sale

In a recent Ontario decision, a court granted a husband possession of the matrimonial home the wife had been living in, after she failed to comply with an order to sell the home.

Wife Does Not Comply with Order to Sell Home 

The parties were married on August 11, 2001. They separated after 17.5 years of marriage on January 15, 2019. They have two children, aged 17 and 14.

The parties jointly owned the matrimonial home in Toronto.  

In April 2019, the husband voluntarily vacated the matrimonial home. Since the separation, the husband had continued to pay 50% of the capital expenses associated with the matrimonial home, including property taxes and repairs. Since separation, the husband had paid the wife child support for the parties’ two children in the sum of $1,067 per month. 

After separation, the husband had initially rented an apartment close to the matrimonial home. However, he was unable to continue to afford to do so while still maintaining one-half of the capital expenses associated with the matrimonial home, paying his own housing and living expenses and supporting the children. As aresult, the husband moved to Brampton to reside in his brother’s apartment, in which he rented a bedroom.

In January 2020, the parties had attended a case conference, at which they agreed that the matrimonial home would be listed for sale and sold. 

Despite initially retaining a real estate agent, the matrimonial home was never listed for sale.

As a result, the husband sought a court order to compel the wife to comply with the consent order, an order granting him sole carriage of the sale of the matrimonial home and an order dispensing with the need for the wife to consent to and/or sign any sale documentation, to effect both the listing and sale of the matrimonial home.

The husband claimed that the wife was obstructing the sale of the matrimonial home by her willful refusal to respond to him and his counsel and that, as a result, she ought to not be involved in the listing and/or sale of the matrimonial home.

Finally, the husband sought a temporary order for exclusive possession of the matrimonial home, so that he may take the necessary steps to ready the matrimonial home for sale, including the decluttering, and arranging of the repairs needed. He claimed that he had no faith that the wife would take any steps to ready the house for sale, even if the court ordered her to do so. 

Court Grants Possession of Home to the Husband

The court found in favour of the husband, stating:

“The wife provided this court with no evidence in regard to the motion. Had the wife had a reasonable explanation for her lack of participation in the case since the spring, she could have provided that information to the husband’s counsel or taken the minimal steps necessary to inform the court of any issue that prevented her from participating. The court can only reasonably infer from the husband’s evidence that the wife willfully breached the court order in several ways. Without question, the wife is aware that she is in breach of the Court order.  She participated in the January 24th, 2020 case conference. She had a lawyer present at the case conference acting as her agent. The wife took some steps to comply with the terms of the final consent order, albeit, only to provide the husband with a key to the matrimonial home and to choose a listing agent and sign a listing agreement. I am satisfied that the wife has received the husband’s emails and texts and the correspondence from the husband’s lawyer as well as the motion material. She has chosen not to respond to or attend the last two events in this case – the urgent case conference and this motion. In the absence of any information that would support otherwise, I find that the wife has intentionally failed or refused to comply with the consent order in the respects mentioned above.” 

Having found that there would be little hope that the wife would follow the terms of the consent order in terms of the sale of the matrimonial home, the court granted exclusive possession of the home to the father so that he could ready the home for sale.

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

Baker & Company’s lawyers have a reputation for closing residential purchase, sale and refinance transactions smoothly and without surprises. Whether you are buying or selling your home, cottage, investment property or vacant land, we can assist you from the beginning to the end of your transaction. We represent individuals and families in all kinds of real estate matters. We act diligently to ensure you have a positive and stress-free experience.

At Baker & Company in Toronto, we take the time to meet with you and understand your unique needs in order to guide you through your next residential real estate transaction.  We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management. Call us at 416-777-0100 or contact us online for a consultation.

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Residential Real Estate

Home Buyers Attempt to Rescind Agreement After Discovering Easements on the Property

In a recent Ontario decision, the purchasers of a home attempted to rescind the purchase agreement after discovering the existence of two easements on the property.

An easement is a right to use and/or enter onto the property of another without possessing it.

What Happened?

The purchasers and vendors entered into an agreement of purchase and sale (the “agreement”) for a property in Ontario, which was signed on February 13, 2020. The property included a two-storey home with five bedrooms and five bathrooms, a pool and a backyard area. The agreed-upon purchase price was $1,755,000 and the buyers paid a $75,000 deposit. The deal was scheduled to close on June 30, 2020. 

Part of the agreement set out as follows:

Provided that title to the property is good and free from all registered restrictions, charges, liens, and encumbrances except as otherwise specifically provided in this Agreement and save and except for …

(d) any easements for drainage, storm or sanitary sewers, public utility lines, telecommunication lines, cable television lines, or other services which do not materially affect the use of the property. 

If within the specified times […] any valid objection to title … or to the fact that the said present use may not be lawfully continued … and which Buyer will not waive, the Agreement, notwithstanding any intermediate acts of negotiations in respect of such objections, shall be at an end and all monies paid shall be returned without interest or deduction and Seller, Listing Brokerage and Co-operating Brokerage shall not be liable for any costs or damages. Save as to any valid objection so made by such day and except for any objection going to the root of title, Buyer shall be conclusively deemed to have accepted Seller’s title to the property. 

However, on June 1, 2020, the purchasers discovered two easements on the property. Both easements were in favour of the Town of Newmarket and related to the maintenance and inspection of sanitary and storm sewers. The easements required the owner of the property to keep the areas free of any trees, buildings, structures and obstructions and that they not be paved with hard concrete. While one of the easements was deemed inconsequential, the other bisected the backyard.

Having discovered the easements, the purchasers wrote to counsel for the vendors requesting, among other things, a Release of Transfer of both easements. Counsel for the vendors replied on June 9, 2020, indicating that the vendors were not required to remove the easements.

As a result, the purchasers brought an application for a declaration that they were entitled to rescind the agreement and for the return of their deposit of $75,000. The purchasers argued that the vendors had failed to show good title because, after the agreement had been entered into, a title search revealed two easements on the property for storm and sanitary sewers.

The purchasers argued that the easements were not disclosed prior to the signing of the agreement. They claimed that they never saw, were provided with nor asked for a copy of the survey. It was their position that the easements affected their intended use of the property in a material way and that had they known about them they would not have made the purchase. 

In response, the vendors claimed that the easements were disclosed to the purchasers in a schedule to the agreement. Because one of the purchasers was a licensed real estate agent, the vendors stated that the purchaser should have been able to ascertain the existence of the easements.

Court Refuses to Rescind Purchase Agreement

The court found that the easements were in fact described in a schedule to the agreement, though they were not specifically disclosed or provided for in the agreement. However, the court stated:

“[The purchaser], a licenced real estate agent, should likely have known that this meant there were easements on the property. Given his assertion that the home was purchased despite its alleged deficiencies because of the “potential of the backyard” one would have thought he would make inquiries about anything that might hinder his plans for the backyard. If it were of such importance to the purchasers to develop the backyard in the way they claim to have intended to, inquiries about any easements to the property and about the meaning of the title description should have been done.”

The court concluded that the purchasers’ actions were inconsistent with their expressed importance of being able to make such changes to the property; the court, therefore, inferred that the existence of the easements was not the real motive behind seeking rescission of the agreement.

As a result, the court found that the vendors had shown good title to the property and that the objection to the requisition of a release of the easement was not valid. The court dismissed the purchasers’ application.

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

Baker & Company’s lawyers have a reputation for closing residential purchase, sale and refinance transactions smoothly and without surprises. Whether you are buying or selling your home, cottage, investment property or vacant land, we can assist you from the beginning to the end of your transaction. We represent individuals and families in all kinds of real estate matters. We act diligently to ensure you have a positive and stress-free experience.

At Baker & Company in Toronto, we take the time to meet with you and understand your unique needs in order to guide you through your next residential real estate transaction.  We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management. Call us at 416-777-0100 or contact us online for a consultation.

Categories
Residential Real Estate

Court Finds Tenant’s Appeal of Eviction an Abuse of Process

In a recent Ontario decision, the court found a tenant’s attempt to appeal her eviction was an abuse of process that allowed her to continue not paying rent and stay her eviction while awaiting the appeal hearing.

Landlord Takes Possession of Condominium Unit

The landlord owns a rental unit in a condominium building in Toronto, which she bought on March 1, 2018.

The landlord took over the lease when she purchased the unit. The rent was $2,072 per month payable on the first day of each month.

After the landlord took possession of the unit, she became aware that the tenant did not reside in the apartment, but, rather, that she was using it for short term rentals. At that time, the condominium agreement allowed for short term rentals in the building.

However, in 2019, the condominium corporation notified condominium owners that it intended to amend its rules to prohibit the sub-leasing of condominiums for short term rentals. The landlord notified the tenant of these changes, but the parties were unable to resolve the issue.  

The landlord subsequently received notices from the condominium corporation that she was in breach of the new condominium rules.

The Order of the Landlord and Tenant Board

The landlord brought an application to the Landlord and Tenant Board (the “Board”) to terminate the tenancy based on the tenant’s violation of the condominium’s rules. The notice of termination was served on the tenant on November 21, 2019. The tenant then stopped paying rent as of December 1, 2019.

Following the hearing, on February 4, 2020, which the tenant did not attend, the Board issued a decision in which it found that the tenant operated a short term rental business that interfered with the landlord’s “lawful right, privilege or interest” because it exposed the landlord to sanctions from the condominium corporation. In addition, the Board found that the tenant had not paid her rent since December 1, 2019. Based on these findings, the Board ordered that the tenancy was to be terminated as of February 15, 2020 and that the tenant was to pay outstanding rent. 

On February 15, 2020, the tenant requested that the Board review the eviction order, which it refused to do.

By notice of appeal dated February 28, 2020, the tenant appealed the eviction order and the review decision to the Divisional Court. The tenant claimed that her lease explicitly allowed her to use the apartment for short term rentals. In addition, she claimed that she had been traveling between December 26, 2019 and February 4, 2020, and that she therefore did not receive the notice of hearing.

The commencement of the tenant’s appeal resulted in an automatic stay of the eviction. After serving her notice of appeal, the tenant continued to not pay rent.

In response, the landlord argued that the appeal should be quashed on two grounds:

  1. It was devoid of merit because it did not raise a question of law; and 
  2. It was an abuse of process because the tenant’s failure to pay rent demonstrated that the appeal was only brought for the purpose of obtaining an automatic stay of the eviction.

Court Orders Eviction of Tenant for Abuse of Process

First, after reviewing the tenant’s arguments, the court agreed with the landlord that the appeal was devoid of merit because it did not raise a question of law.

Turning to the landlord’s second argument, the court reviewed the relevant principles relating to an argument of abuse of process:

“This Court has consistently held that launching an appeal for the sole purpose of obtaining the stay of an eviction in the context of landlord and tenant proceedings is an abuse of process […] 

[O]ne of the key indicia that a party is trying to “game the system” is a circumstance where the Tenant persistently fails to pay rent prior to and throughout the appeal period without any explanation for the failure to pay rent or any evidence of an intention to remedy the situation.”

At the hearing, the tenant had admitted to not using the apartment as her own residence but rather as part of a short term rental business. As soon as it became evident that she may not be able to continue using the apartment for her business, she stopped paying rent.  The court found that her failure to pay rent had nothing to do with any hardship caused by the COVID-19 pandemic but was a clear attempt to avoid making payments she may not be able to recoup through her business. 

The court found that such circumstances were particularly abusive given that the tenant appeared to continue sub-letting the premises without paying any rent to the landlord.

As a result, the court found that the tenant’s appeal was a clear abuse of process and quashed the appeal. In addition, the court vacated the automatic stay of the Board and stated that the landlord may file the Board’s eviction order with the Sheriff on August 31, 2020. Finally, the court ordered the tenant to pay costs to the landlord in the amount of $7,000. 

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

At Baker & Company in Toronto, our real estate lawyers take the time to speak with you and understand your unique needs in order to guide you through your real estate matter, whether commercial or residential. We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management in a variety of leasing issues. Call us at 416-777-0100 or contact us online for a consultation.

Categories
Residential Real Estate

Court Refuses to Reinstate Ontario’s Moratorium on Residential Evictions

On July 31, 2020, an Ontario court heard a motion by the Advocacy Centre for Tenants Ontario (“ACTO”) and two residential tenants for an order setting aside Chief Justice Geoffrey B. Morawetz’s order dated July 6, 2020 which varied his order dated March 19, 2020. 

The March 19, 2020 order had effectively placed a moratorium on residential evictions in Ontario. As a result of the order made on July 6, 2020, the moratorium ended July 31, 2020. 

ACTO sought to reinstate the moratorium by setting aside the July 6, 2020 order.

ACTO’s Arguments

ACTO is a legal clinic governed by the Legal Aid Services Act, 1998, which works to advance the rights and systemic concerns of low-income tenants and other vulnerable “precariously housed and homeless Ontarians.” It has a long history of advocating for the interests of the homeless, for eviction prevention, and for affordable housing.

ACTO argued that it was premature to lift the moratorium on evictions and that the Chief Justice was not told of the continuing risks to individuals facing eviction and to others in the community. ACTO adduced evidence of the continued threat posed by COVID-19 to people in Ontario, especially low-income tenants facing eviction, and even more so to vulnerable, homeless people, and people in government shelters.

ACTO was in the process of looking for tenants facing evictions and loss of their homes; it said that these individuals had a direct interest in the issues before the court and ought to be heard. ACTO proposed to be recognized as a class representative going forward. 

In addition, for the motion before the court, ACTO put forward the evidence of two tenants. 

Evidence Given by the Two Tenants

The first tenant works as a cashier. She is 53 years old and suffers from chronic medical issues. After a dispute with her landlord that resulted in claims by both sides before the Landlord and Tenant Board, the first tenant and her landlord reached a settlement. They consented to an order dated March 18, 2020 under which she agreed to leave the rented premises on June 1, 2020. 

The first tenant testified that she had no place to go. She had no friends or family who had extra space where she could live. She stated that if she was evicted, she would likely become homeless or have to enter the shelter system. 

The second tenant’s sole source of income is from Ontario Works. She also qualifies for a housing subsidy from the City of Toronto. The second tenant had experienced homelessness before and did not want to undergo that trauma again.

In January, 2020, the Landlord and Tenant Board had ordered the second tenant evicted without notice based on a prior written agreement to terminate the tenancy. At a subsequent hearing, the second tenant settled with her landlord and agreed to vacate the rental unit by May 31, 2020.

The second tenant stated that she too had no place to go and that she expected to be forced to live on the streets because she understood that the shelter system would not have room for her. 

Court Refuses Motion

The court began by stating:

“I have no doubt that a tenant who is evicted and exposed to an increased risk of COVID-19 on the streets or in shelters suffers harm that cannot be readily compensated in money. That is the definition of “irreparable harm” for the purpose of this type of motion.”

However, the court continued: 

“The balance of convenience test compares the harm to the moving parties if a stay is denied  against the harm to the responding parties if a stay is granted. None of the landlord associations or tenant groups are parties as yet. But I am asked to balance the risk of COVID-19 to the subset of evicted, vulnerable tenants and mortgagors who may end up homeless or in shelters against the economic risk to landlords and mortgagees of a further delay of evictions for all tenants and mortgagors for a few weeks or months.

That equation defines the difficulty with the issues argued before me by both the purported landlord and tenant representatives. I do not believe that this is an issue for the court nor an issue that was properly before the Chief Justice. Questions of how the Province should battle the pandemic and the necessary policy choices among competing views – all good, decent, and honestly-held – are for the government. The Chief Justice never embarked on a legal determination of whether Ontario should stop residential evictions because the danger to some vulnerable tenants outweighed the risks to landlords. [T]hat would mix the court in the government’s business and cross the lines separating the respective branches of government.”

Ultimately, the court refused to grant the motion. The court found that ACTO and the two tenants’ concerns were not properly directed at the Chief Justice’s order re-opening court enforcement services. The court concluded that while there may be individual concerns for individual eviction proceedings and there may be systemic concerns that are properly addressed with the government, it did not find any issue raised that could properly lead to a stay of the Chief Justice’s order.

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

At Baker & Company in Toronto, our real estate lawyers take the time to speak with you and understand your unique needs in order to guide you through your real estate matter, whether commercial or residential. We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management in a variety of leasing issues. Call us at 416-777-0100 or contact us online for a consultation.

Categories
Residential Real Estate

Tenant Ordered to Allow Landlord Access to Apartment, Subject to COVID-19 Health and Safety Directions

In a recent Quebec case, a tenant was ordered to allow her landlord access to her apartment, subject to COVID-19 health and safety directions.

What Happened?

The tenant lives in a four-and-a-half room apartment located in the basement of a building, which is owned by the landlord. The landlord and tenant had entered into a lease, which had been renewed until June 30, 2020. The monthly rent was $510.

The landlord had been attempting to sell the building, which required that he show potential purchasers the inside of the building and its apartments.

However, the landlord claimed that, since June 2019, the tenant had systematically refused to give him access to the building despite the 24-hour advance notices he had given her, as required by law.

More recently, a potential purchaser wanted to conduct a pre-purchase inspection of the building. The landlord claimed that the tenant’s refusal to allow access could result in the loss of the sale.

To this effect, the landlord sent a demand letter to the tenant in March 2020.

However, due to the circumstances surrounding the COVID-19 pandemic, the tenant’s reluctance to provide access to the unit was even more resolute. 

The landlord therefore filed an application with Quebec’s Régie du logement requesting the issuance of an access order against the tenant. The landlord sought an order that the tenant give him access to the dwelling to verify the state of the premises and that he might show it to potential purchasers. He also sought damages for harm suffered.

Issue

At issue was whether the landlord was justified in requesting access to the tenant’s apartment.

Decision

The tribunal began by setting out the relevant provisions of the Civil Code of Québec that deal with access to housing:

1931. The lessor is bound, except in case of emergency, to give the lessee a prior notice of 24 hours of his intention to ascertain the condition of the dwelling, to carry out work in the dwelling or to have it visited by a prospective acquirer.

1932. The lessee may, except in case of emergency, refuse to allow the dwelling to be visited by a prospective lessee or acquirer before 9 a.m. or after 9 p.m.; the same rule applies where the lessor wishes to ascertain the condition of the dwelling.

The lessee may, in all cases, refuse to allow the dwelling to be visited if the lessor is unable to be present.

1934. No lock or other device restricting access to a dwelling may be installed or changed without the consent of the lessor and the lessee.

If either party fails to comply with his obligation, the court may order him to allow the other party to have access to the dwelling.

The tribunal explained that under the law, the only valid grounds for the denial of access by a tenant to a landlord are: the absence of 24 hours’ prior notice, the fact that the hours of visitation are contrary to the requirements of art. 1932, or the absence of the landlord or his or her authorized agent during the visits.

Conversely, the tribunal stated that where the legal requirements have been met by the landlord, a tenant must allow the required access so that the dwelling can be visited.

The tribunal stated:

“Consequently, and with respect, the law does not allow a tenant who has been duly notified of a visit to refuse access to the dwelling because of his or her own schedule or absences from the dwelling, regardless of the reason for such absences. […]

The reasons raised by the tenant cannot justify her refusal to allow the landlord access to the dwelling, even in a period of pandemic.” [translated]

As a result, the tribunal issued an order requiring the tenant to give access to the landlord, subject to compliance with the legal formalities by the landlord. 

Additionally, the tribunal ordered that the landlord or any person accompanying him must respect certain formalities imposed by the COVID-19 pandemic, namely:

  • Wash (or disinfect) hands before entering the dwelling;
  • Avoid touching surfaces and disinfect if necessary;
  • Wear gloves and a mask; and
  • Respect the rules of social distancing of two meters.

Finally, the tribunal refused to award any damages for harm suffered, explaining that moral damages cannot be awarded to a landlord in the context of a residential housing application before the Régie du logement. 

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

At Baker & Company in Toronto, our real estate lawyers take the time to speak with you and understand your unique needs in order to guide you through your real estate matter, whether commercial or residential. We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management in a variety of leasing issues. Call us at 416-777-0100 or contact us online for a consultation.

Categories
Residential Real Estate

Court Orders Sale of Parents’ Two Properties as a Result of COVID-19-Related Economic Difficulties

In a recent, and at times strongly-worded, court decision, two parents were ordered to sell their jointly-owned matrimonial home and investment property to alleviate economic difficulties created by the COVID-19 pandemic.

Court’s Opening Remarks

Before getting to the facts of the case, the court began its endorsement by making the following remarks:

“COVID-19 has instantly made most of our “He Said/She Said” disputes sound pretty petty.

We’re still in the midst of an existential crisis. Medically. Economically. Socially.

But rather than brace together against the common enemy, parents are pounding on the family court door, begging us to open up so they can get a few more kicks in – as if a judge has the power to wake anyone from this pandemic nightmare.  

Business as Usual?  Gone.

Nonsense as Usual?  Here to stay.”

What Happened?

The father brought a motion to force the immediate sale of two jointly-owned properties, including the matrimonial home where the mother resided with their two children ages seven and four. The mother did not want either property sold.

The equity in the matrimonial home was about $1 million and the value of their Toronto investment property had a fair market value of approximately $700,000.

Parties’ Positions

The father advanced that COVID-19 had drastically and unexpectedly decreased his income. As a result, he claimed he could not longer afford to pay the mortgage and carrying costs in relation to the matrimonial home. Additionally, he could no longer afford to pay child and spousal support. Between 2016 and 2019 his annual personal income averaged $132,000; he estimated that his total 2020 earnings would be about $66,000. The father argued that neither he nor the mother couldafford the carrying costs in relation to either of the two properties.  

The mother argued that while the father claimed COVID-19 had resulted in a reduction in his income, he had made no reference to his personal savings, investments or other sources of income from which he could meet his financial obligations. Additionally, the mother argued that the COVID-19 restrictions were being reduced, so any reduction in the father’s business income would soon be resolved. The mother also claimed that the father could have applied for government financial assistance to help small businesses and employees during COVID-19, but he had elected not to pursue these options. Finally, the mother argued that the father was taking a scorched earth litigation strategy, seeking to sell properties when the real estate market was depressed. 

Decision

The court accepted that both parents were experiencing financial hardship and that COVID-19 had unexpectedly and unavoidably created a profound and indefinite financial crisis for the family. The court found no reason to doubt the father’s estimate that his income for 2020 would be about half of what it had been in previous years. The court stated:

“[T]his pandemic has created such immediate financial crisis for so many individuals and businesses, that it would be unrealistic and inhumane not to understand that people are really hurting – and they need help now. […] 

COVID-19 has at least temporarily ruined the financial prospects of both of these parties. And neither of them is to blame.”

While the court wondered why, in the face of economic uncertainty, the parents were spending money to pay lawyers to debate the sale of their homes, it acknowledged that the parents simply did not have enough money and that the sale of the two properties would free up at least $1.3 million dollars of joint funds, after clearing the parents’ debts.

The court then stated:

“I find that both of these parties are frightened, angry and stubborn. That’s not enough to either force a sale or block a sale.  

They are both acting so strategically and aggressively that they have lost sight of the harm they are doing to their children and to their bank accounts. 

And they definitely don’t seem to understand that in this COVID-19 economy, financially wasteful litigation is an indulgence they can no longer afford.”

However, the court concluded that the mother had not established any reason why either of the properties should not be sold. To the contrary, the court found that the father had clearly established that economic necessity required that both properties be sold, to alleviate a crippling debt load, and to free up significant available equity so that the parents can both get on with their lives.

As a result, the court ordered the immediate listing for sale of both properties.

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

Baker & Company’s lawyers have a reputation for closing residential purchase, sale and refinance transactions smoothly and without surprises. Whether you are buying or selling your home, cottage, investment property or vacant land, we can assist you from the beginning to the end of your transaction. We represent individuals and families in all kinds of real estate matters. We act diligently to ensure you have a positive and stress-free experience.

At Baker & Company in Toronto, we take the time to meet with you and understand your unique needs in order to guide you through your next residential real estate transaction.  We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management. Call us at 416-777-0100 or contact us online for a consultation.

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Residential Real Estate Uncategorized

No Right of First Refusal in the Sale of a Matrimonial Home

In a recent Ontario Court of Appeal decision, the court reiterated the principle that spouses may not be granted a right of first refusal in a matrimonial home.

A right of first refusal in real estate is a mechanism that gives a party the right to be the first allowed to purchase a particular property if it is offered for sale. 

What Happened?

The husband and wife separated and went to trial to resolve the ensuing financial issues. After a four-day trial, the trial judge ordered the husband to pay the wife an equalization payment of $226,670. 

Additionally, the trial judge ordered that, after a fair market value assessment, the husband had the “right to conclude the purchase” of the wife’s interest in the jointly-owned matrimonial home within 30 days, and to obtain the release of the wife from her obligations under the existing first mortgage registered against the matrimonial home.

Parties’ Positions

The wife appealed and asked the Court of Appeal to vary the trial judge’s order to omit the husband’s right to conclude the purchase of the matrimonial home. She sought the sale of the matrimonial home and the division of its net proceeds.

The husband contested the appeal, first, because he argued that the appeal should instead be heard by the Divisional Court and that it was on the trial judge to explain his order. Also, the husband wanted to purchase the wife’s interest in the matrimonial home. Finally, he stated that he had been required to live in a trailer while the matrimonial home sat vacant as the wife was living with her mother; the husband sought compensation for his resulting expenses and hardship.

Court of Appeal Decision

After dismissing the husband’s procedural objections, the court stated that the case raised a single issue: the arrangements for selling the matrimonial home. 

The court explained that a right of first refusal is a substantive right that has economic value. It cited previous case law which has established that, absent consent between the parties, one spouse does not have a special right to purchase the matrimonial home and that once the matrimonial home is ordered to be sold, each spouse is entitled to receive fair market value for his or her interest in it. In the cited 1992 case, the Ontario Court of Appeal had previously stated:

“A right of first refusal will most often work to discourage other interested buyers. If a spouse is granted a right of first refusal, the effect of it is to remove that spouse from the competitive market for the matrimonial home. The existence of a right of first refusal distorts the market, because it provides a benefit to one party, which eliminates the need for that party to compete with any other interested purchaser. Finally, if the spouse with a right of first refusal is in possession, the existence of the right of first refusal will provide a disincentive to maintaining the property, so as to increase its value and saleability.”

Consequently, the court explained that a right of first refusal falls outside the boundaries of what is ancillary or what is reasonably necessary to implement the order for sale of the matrimonial home. It distorts the market for the sale of the matrimonial home by eliminating the need to compete against any other prospective purchaser, thus potentially reducing the amount the joint owning spouse realizes on the sale.

The court found that, in the absence of consent, the right of first refusal should not have been granted by the trial judge in this case. It stated that if the husband wanted to purchase the matrimonial home, he would have to compete with any other interested purchaser.

As a result, the court allowed the appeal and ordered that the matrimonial home could be listed for sale immediately by the wife.

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

Baker & Company’s lawyers have a reputation for closing residential purchase, sale and refinance transactions smoothly and without surprises. Whether you are buying or selling your home, cottage, investment property or vacant land, we can assist you from the beginning to the end of your transaction. We represent individuals and families in all kinds of real estate matters. We act diligently to ensure you have a positive and stress-free experience.

At Baker & Company in Toronto, we take the time to meet with you and understand your unique needs in order to guide you through your next residential real estate transaction.  We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management. Call us at 416-777-0100 or contact us online for a consultation.

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Residential Real Estate

Ontario Court Orders Eviction of Tenant Despite COVID-19 Moratorium Due to Property Damage, Illegal Activities and Lack of Social Distancing

Despite the province-wide moratorium on evictions in Ontario due to the COVID-19 pandemic, a court recently ordered the eviction of a tenant after the landlord testified to property damage, alleged illegal activities and non-respect of social distancing directives.

What Happened?

On May 28, 2020, the Ontario Landlord and Tenant Board (“LTB”) terminated the tenant’s tenancy as of June 2, 2020 and ordered the tenant to move out of the rental unit on or before that day. 

The LTB found that the landlord had satisfied both the normal test for eviction and the higher test being applied during the COVID-19 pandemic, specifically, that there were urgent circumstances which required the eviction of the tenant. 

The LTB found that there had been willful damage to the leased premises and that the tenancy presented a threat to safety. The LTB based its decision on evidence that a large window at the front of the unit had been willfully broken and on the high frequency and number of visitors to the premises, which had not abated following the onset of the COVID-19 pandemic. 

The LTB heard that visitors to the unit arrived throughout the day and night, that many stayed for only a few minutes and others for extended periods of time, including overnight. There was evidence that the police had been watching the property because of suspected drug-related activity. Another tenant, who cuts the lawn at the property, testified that he found both needles and small white baggies, which he said were of the type used for drugs, containing white residue. The same tenant said visitors to the tenant’s unit sometimes gathered on the driveway and that the noise from the unit disturbed him and the neighbours at all hours. 

In an affidavit, the landlord said that because of the tenant’s conduct, he was concerned about the safety and well-being of his other tenants, the building’s neighbours and himself.

COVID-19 Context

The landlord applied to court to request an order enforcing the LTB’s eviction order. The court application was necessary because of Ontario’s province-wide moratorium on evictions.

Decision

While the court acknowledged the moratorium on evictions, it stated:

“I certainly accept […] that these are not ordinary times and that everyone has an interest in having a home that allows them to stay healthy and assist in preventing the spread of the COVID-19 virus. Despite the extraordinary times, however, there is no moratorium that favours willful damage to property.

In deciding whether the eviction order should be enforced, […] the court must consider the societal objectives of the eviction moratorium as they relate to the prevention of the spread of COVID-19. That a tenancy is being exploited for purposes which may actually promote the spread of the virus will weigh heavily in favour of enforcement of the eviction order.” 

Based on the evidence and the submissions by the landlord, the court found that the scale in the case tipped in favour of enforcement of the eviction. The court accepted the evidence that the tenant’s unit was being used for illegal activity and further stated:

“[T]he steady stream of people entering and leaving the tenant’s unit at all hours of the day and night, which continued unabated when the pandemic began, is evidence of the tenant’s indifference to the pandemic-related physical distancing expected of all citizens, to her own health and to the health of her visitors and everyone with whom they in turn come into contact.” 

As a result, the court ordered the enforcement of the eviction against the tenant.

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

At Baker & Company in Toronto, our real estate lawyers take the time to speak with you and understand your unique needs in order to guide you through your real estate matter, whether commercial or residential. We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management in a variety of leasing issues. Call us at 416-777-0100 or contact us online for a consultation.

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Residential Real Estate

Alberta Court Orders Eviction of Tenant on Urgent/Emergency Basis After Assault Allegations

An Alberta court recently ordered the eviction of a tenant on an urgent/emergency basis after the landlord alleged she had assaulted another tenant.

What Happened?

The landlord, a company, administers low income housing in Calgary which includes subsidized housing. 

The tenant was a long-time resident of the property, for which she had a written lease for her month-to-month tenancy. She had lived there since 2002. Originally, she lived there with her son, but he moved out in 2006.

The landlord sought to evict the tenant. The landlord alleged that she had failed to properly maintain the premises, had disagreements with her neighbours, and other issues which had added up over time including an allegation that she was “over housed”. 

The court originally issued an eviction order on February 5, 2020, after the tenant did not appear for the hearing. 

However, the court later determined that there had been issues relating to service of court documents. As a result, the court set aside the original eviction order and directed that the matter be adjourned to March 31, 2020, to be heard on its merits.

COVID-19 Context

However, due to the COVID-19 pandemic, all court matters were adjourned, including the landlord’s case, indefinitely. Additionally, the Alberta government had announced a moratorium on evictions until May 1, 2020.

New Events

Later, however, the landlord alleged that new events transpired in April, 2020, during the pandemic-related adjournment and moratorium.

The landlord claimed that the tenant assaulted a tenant of a neighbouring property.

As a result, the landlord sought to have its application heard, along with the new assault allegations, pursuant to the Alberta Court’s Urgent/Emergency application procedure, which had been implemented during the period in which regular sittings had been suspended due to the pandemic. 

Leave to have the matter heard was granted by the court, and on May 27, 2020, the court heard the new application.

At Issue

The main issue was whether or not there was an assault or interference with the occupants of the neighbouring property by the tenant.

Decision

The court began by stating that, in addition to consideration under the Residential Tenancies Act and the relevant regulatory framework, there was a critical clause in the lease for the purpose of considering the assault or interference with neighbouring resident issues. The clause provided that:

9(1) The tenant shall not do any act or permit any act to be done by any occupant or invitee, either in the premises or in the building or common areas of the property of which the premises form a part, that interferes with the rights of the Landlord or other Tenants in the property, or that interferes with the right of adjacent residents to the quiet possession of their premises. (Emphasis added)

At the hearing, the landlord had submitted affidavits from witnesses to the alleged assault. 

The tenant submitted her own affidavit claiming that she had in fact been the victim of an assault.

However, as part of the affidavits submitted on behalf of the landlord, two video segments were included. The videos had been shot by another neighbour. The court concluded that the videos clearly showed that the tenant was the aggressor during the interaction between the parties and that aggression extended to physically chasing the victim down the alley when she was trying to get away from the tenant. Additionally, the videos showed the tenant spraying water from a hose as well as the tenant attempting to push the victim. The court also found that there were no elements of self-defence on the part of the tenant appearing in the videos. 

The court concluded that on the day of the alleged incident, the tenant was clearly the aggressor and that she interfered significantly with the victim’s quiet enjoyment of her premises.

Therefore, the court concluded that the tenant’s behaviour and actions constituted a sufficient breach of clause 9(1) of the lease for the tenancy to be terminated. 

As a result, the court ordered that the tenant deliver up possession of the premises by 4:00 pm on July 15, 2020 with a civil enforcement agency enforcement clause and a police assistance clause in the order. 

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

At Baker & Company in Toronto, our real estate lawyers take the time to speak with you and understand your unique needs in order to guide you through your real estate matter, whether commercial or residential. We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management in a variety of leasing issues. Call us at 416-777-0100 or contact us online for a consultation.

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Residential Real Estate

Landlord and Tenant Agreement Cannot Carve Out Exception to Quebec’s COVID-19 Eviction Moratorium

In a recent Quebec decision, the tribunal refused to ratify part of an agreement between a landlord and a tenant that was contrary to the government’s order implementing a moratorium on evictions.

What Happened?

On April 15, 2020, the landlord applied to the Régie du logement to terminate her tenant’s lease and order the immediate eviction of the tenant. 

The landlord asked the tribunal to make the order despite the Quebec Minister of Health and Social Services’ Order dated March 17, 2020 (the “Ministerial Order”), which read as follows:

“The effects of any judgment by a tribunal or any decision by the Régie du logement authorizing the repossession of a dwelling or the eviction of the lessee of a dwelling are suspended, as are the effects of any judgment or any decision ordering the eviction of the lessee or occupant of a dwelling, unless the lessor rented the dwelling again before the coming into effect of this Ministerial Order and the suspension would prevent the new lessee from taking possession of the premises. Despite the foregoing, the tribunal or the Régie du logement may, when exceptional circumstances justify doing so, order the enforcement of one of its judgments or one of its decisions, as the case may be.”

The Agreement 

However, at the hearing, the tenant and landlord entered into an agreement and asked the tribunal to ratify it. 

In the agreement, the landlord and tenant agreed that the lease would terminate no later than August 10, 2020, at which point the tenant would be required to move out. The agreement also allowed the tenant to move out earlier, with 10 days notice to the landlord.

COVID-19 Context

Additionally, the agreement included the following paragraphs:

5. The Tenant acknowledges that the Termination Date is mandatory and the Tenant must therefore move no later than the Termination Date. The Tenant expressly and irrevocably renounces invoking force majeure, including the COVID-19 pandemic, to justify not being able to give vacant possession of the Accommodation to the Landlord no later than the Termination Date.

8. The Tenant agrees to comply at all times with the containment and distancing measures put in place by the Landlord in connection with COVID-19.

13. The Tenant, in the event that the latter contracts COVID-19, undertakes to comply with all the measures necessary for the protection of other residents according to the directives of Public Health, the Ministry of Health and services social, CIUSS and CLSC. 

19. [T]he parties recognize that the exceptional circumstances justify that the court or the Régie du logement order the execution of the conclusions of this agreement in the event of non-compliance, as provided for in Ministerial Order no. 2020-005 of March 17, 2020. [translated]

Decision

The tribunal took issue with paragraph 19 of the agreement. 

While that paragraph stated that the parties recognized that there were exceptional circumstances at hand, the tribunal found that it was premature to use its discretion to make an order implementing the agreement against the Ministerial Order.

The tribunal explained that the Ministerial Order aimed to suspend the effects of any decision ordering the eviction of the tenant of a dwelling in order to protect the health of the population in the context of the state of health emergency decreed on March 13, 2020 by the Government of Quebec under the Public Health Act in connection with the COVID-19 pandemic.

While the Ministerial Order provided for the possibility for a court or tribunal to lift the suspension of the execution of one of its decisions if exceptional circumstances justified it, the tribunal found that the parties could not, by mutual agreement, replace the discretion of the court and determine for themselves whether or not exceptional circumstances existed to justify the execution of an order. The tribunal explained that it was not bound by such an agreement, stating: 

“In these proceedings, given that the termination of the lease will be effective no later than August 10, the tribunal does not see how it can determine, in advance, whether or not there will be exceptional circumstances which may justify overriding the Ministerial Order at the time when the eviction of the tenant becomes effective, as the case may be.

Furthermore, the tribunal has no idea whether the Ministerial Order will still be effective as of August 10, 2020.” [translated]

As a result, the tribunal ratified the agreement as an enforceable decision, with the exception of paragraph 19 of the agreement. 

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

At Baker & Company in Toronto, our real estate lawyers take the time to speak with you and understand your unique needs in order to guide you through your real estate matter, whether commercial or residential. We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management in a variety of leasing issues. Call us at 416-777-0100 or contact us online for a consultation.