Bogus Appeal Allows Deadbeat Tenant To Live Rent Free
A recent Divisional Court appeal decision shows how easy it is a for a knowledgeable tenant to work the system and continue to live rent free. The landlord and tenant entered into a year long tenancy agreement at a rental rate of $3,800 a month starting March 1, 2015. Between September and December 2015 every rent payment was late and November's payment was only partial.
The landlord commenced proceedings to terminate the tenancy, recover the rental arrears (around $22,000 at the time of the proceeding) and to evict the tenant.
Initially, the tenant contested the eviction but by the end of the hearing, the Board issued an order to terminate the tenancy on consent. In other words, at some point during the hearing, the tenant agreed to leave.
On July 8, 2016 the tenant filed a request to review the termination order. That request was formally refused on July 13, 2016. The tenant appealed to Divisional Court. This means that the tenant was actually appealing his own agreement to leave.
The landlord brought a motion to quash the appeal on the basis that it was devoid of merit. By the time the motion was heard, rental arrears had accumulated to almost $34,000.
Divisional Court agreed that the motion was devoid of merit. It stated: "The notice of appeal is generic in nature, and raises no issue that could conceivably provide an understanding of the basis for an appeal, far less an arguable basis. It says that:
1. The Board erred in making a determination that the appellant was in breach of the lease.
2. The Board exceeded its jurisdiction.
3. The Board erred in law in granting the order."
Although the landlord was successful, it incurred additional expenses and potentially lost rental income from another source fighting the appeal of an order that was consented to. It is this author's respectful opinion that appeals from consent orders should face a minimum threshold of the appellant needing to establish a valid a reason to retract his or her consent based on clear and convincing evidence.
The Lesson: Sadly, the only way to prevent this type of situation is for landlords to conduct a fulsome background check on prospective tenants, including credit checks and reference checks. If there is any doubt, asking for a co-signer is prudent. That way, if the tenant is a deadbeat, there is another potential source to collect from.
Kenyon v Bielak, 2016 ONSC 6162 (DivCt) https://www.canlii.org/en/on/onscdc/doc/2016/2016onsc6162/2016onsc6162.pdf
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