Monday, October 21, 2013

Right of First Refusal after Renovation – An RTA Quagmire?

I came across an interesting issue today in my landlord and tenant practice. The Residential Tenancies Act is recognized by the Courts as a complete code, and it attempts to cover every eventuality with respect to activities between residential landlords and tenants.

But at times, it's clear the drafters got lazy. Or intentionally left the statute vague. Sometimes intentional vagueness makes sense; we have judges and adjudicators to deal with issues that are not cut and dry and require judgement. But sometimes statues that are vague leave the parties with little direction and at risk of being sued. I think in this case it was plain laziness!
Under s.50 of the Residential Tenancies Act, a landlord can give a tenant notice to end the tenancy if they are doing renovation of the unit requiring a building permit, where the work would be so extensive that a tenant could not possibly remain in the unit. However the statute requires a 120 day notice period, 3 months compensation AND the right of return once the work is done. On the issue of return, it says:

53. (1) A tenant who receives notice of termination of a tenancy for the purpose of repairs or renovations may, in accordance with this section, have a right of first refusal to occupy the rental unit as a tenant when the repairs or renovations are completed. 2006, c. 17, s. 53 (1).
(2) A tenant who wishes to have a right of first refusal shall give the landlord notice in writing before vacating the rental unit. 2006, c. 17, s. 53 (2).
(3) A tenant who exercises a right of first refusal may reoccupy the rental unit at a rent that is no more than what the landlord could have lawfully charged if there had been no interruption in the tenant’s tenancy. 2006, c. 17, s. 53 (3).
(4) It is a condition of the tenant’s right of first refusal that the tenant inform the landlord in writing of any change of address. 2006, c. 17, s. 53 (4).
Sounds, great, but in real life, it's a nightmare. For instance, it’s not clear:
  • How much notice the landlord has to give the returning tenant of the proposed work completion/return date?
  • What happens if the landlord can’t get in touch with them despite their best efforts?
  • If the landlord does give them days notice to re-occupy, how long does the tenant have to “firm up” the return so that the landlord knows they haven’t changed their mind? Does the tenant even have to firm it up?
  • What if the unit is ready in November, and the landlord gives them notice of the date, and the tenant says “yes, I’m returning, but not until January"?
  • How long should the landlord wait to hear back from the tenant, before they attempt to re-rent to a new tenant?
  • What is the remedy for the tenant if the landlord simply re-rents the unit?
  • The statute talks about the tenant providing a forwarding “address”, not email or phone number. Is it sufficient to write the former tenants? 
  • What if the landlords send a letter to the address that was provided, it's returned undeliverable, and you have their email or phone? Are you supposed to try? Who has the onus?

Like much of landlord and tenant law, it's a mess. The Liberal government has repeatedly ignored obvious deficiencies and shortcomings of the statute, and has even ignored decisions by the Court of Appeal which overruled clear legislative intent based on their own (unusual) statutory interpretation. The solution when that happens is supposed to be a dialogue between the courts and the legislators, but the legislators remain silent.


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Lynn Poley said...

What happens if once you've vacated, as a tenant, on a notice of eviction for renovations, given said notice to move back in after renovations have been completed and the landlord decides a month later that instead of renovating the 3 bedroom apt you've been living in for 8 years, as was explained prior to moving out, that he instead intends to change the unit(s) into smaller units? What are our rights in vacating for maintenance and cosmetice renos, only to find out we will no longer have the same square footage, have fewer bedrooms, more apts meaning more people, less amenities, less privacy and the complete dynamics of our two units, changed?? Can he legally take away our apartments as we have been renting them all these years and just decide to turn them into smaller units even when we've given him the notification of returning?

Jo said...

Lynn, did you ever get an answer for this question? I am in the very same situation and would appreciate knowing ASAP what I can do. For now, all I know is that I must vacate in 20 days, and that my unit will no longer be available, being transformed into a bigger unit. Can a landlord do that? And if so, do I have any rights in the matter?