Sapershteyn v 1821317 Ontario Limited: Illegal Rent Increase Repayment Upheld
Divisional Court upholds LTB order for landlord to repay illegal rent increases, rejecting argument that RTA section 135.1 prevents repayment
Summarized by RentZenLast updated: August 16, 2024
Case Summary
87 Wade Avenue, Toronto, ON
Decision in favor of
tenant
Balance Owed to Tenants
-
Dispute Categories
Agree with the ruling?
Timeline
Hearing Date
Oct 2023
Order Date
Oct 31, 2023
Dispute Summary
Tenants applied to the Landlord and Tenant Board seeking a determination that the Residential Tenancies Act applied to their units and that the landlord had collected illegal rent increases and HST. The Board ruled in favor of the tenants, ordering the landlord to repay the illegal rent. The landlord appealed the Board's decision to the Divisional Court, arguing that section 135.1 of the RTA should have prevented the Board from ordering repayment.
Determinations
- The RTA applies to the rental units
- The landlord collected illegal rent increases and HST
- Section 135.1 of the RTA does not apply to prevent repayment of illegal rent in this case
- The Board's May 26, 2020 interim order constituted a final determination of the rent increase validity
Case Study
The court found that while the Board erred in characterizing the purpose of section 135.1, it did not err in its interpretation of the meaning of 'finally determined'. The court held that the Board's application of section 135.1 to the facts was a question of mixed fact and law, not subject to appeal. The court deferred to the Board's expertise in determining whether there was a final determination before July 21, 2020.
Arguments and Actions
Landlord
Arguments
Landlord argued that section 135.1 of the RTA, which came into force on July 21, 2020, prevented the Board from ordering repayment of illegal rent increases that had been paid for at least 12 consecutive months.
Actions
Landlord charged illegal rent increases and HST to tenants, operating the units as if they were commercial and not subject to the RTA.
Aggravating Factors
Landlord operated rental units as if they were commercial, charging HST and not complying with RTA rent increase rules
Tenant
Arguments
Tenants argued that the RTA applied to their units and that they were entitled to repayment of illegal rent increases and HST charges collected by the landlord.
Actions
Tenants applied to the Board for a determination that the RTA applied to their units and for repayment of illegal rent increases and HST charges.
Decision Summary
The Divisional Court dismissed the landlord's appeal of the Landlord and Tenant Board's decision ordering repayment of illegal rent increases. While the court found the Board erred in characterizing the purpose of section 135.1 of the RTA, it held that the Board did not err in its interpretation of 'finally determined' or in its application of the law to the facts. The court deferred to the Board's expertise in determining that there was a final determination of the rent increase validity before July 21, 2020, which meant section 135.1 did not apply to prevent repayment.
Adjudicator Details
Divisional Court
Total Orders
3
Landlord Favorable
0.0%
Tenant Favorable
66.7%
Mutual Agreement
33.3%
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Financial Details
Other Owed Amount
$25,000
Maximum amount of illegal rent increases to be repaid per tenant
Source
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