A panel of three Divisional Court judges in Ontario has overturned a decision of the Landlord and Tenant Board (LLTB) and ruled that a landlord is prohibited from terminating the tenancy relationship with his tenant until she dies.
The landlord and tenant are brother and sister. In 2006 they entered into a tenancy agreement that permitted the sister to live in the brother’s basement for the rest of her life in exchange for $500 per month in rent. The written tenancy agreement explicitly stated that the tenancy was not for a fixed term.
In 2014 the brother attempted to terminate the tenancy because he wanted his daughter to be able to occupy the basement. This would normally be permissible under section 49 of the Residential Tenancies Act, 2006 provided that the tenancy had reached the end of its term.
The sister refused to vacate and an application was brought to the LLTB. It ruled that the written agreement was badly flawed due to the inherent contradiction in the agreement. On one hand the agreement stated that it was not for a fixed term. On the other hand the term was in fact fixed, given that it was defined as being the lifetime of the sister.
In light of this contradiction, the LLTB ruled that the written tenancy agreement had to be disregarded and decided to construe the agreement as an indefinite monthly tenancy agreement. Based on this ruling, the LLTB allowed the brother to terminate the tenancy.
The Divisional Court judges saw things much differently on appeal. They held that the words “not a fixed term” could easily have meant that the parties understood those words to mean that the exact length of the term of the tenancy could not be calculated because it was “for life”. The court held that the tenancy was indeed for a fixed term and that the term was “for life”. The Divisional Court held that the LLTB decision was unreasonable insofar that it imposed an indefinite tenancy as opposed to a fixed term tenancy.
The Divisional Court went on to hold that a tenancy for a fixed, lifetime term does not violate the provisions of the act and that the various termination options would be available to the brother at the end of the term (when the sister died).
Absent this decision being overturned by the Ontario Court of Appeal, landlords (and family members) ought to be very wary about entering into lifetime term tenancy agreements.