Difference between revisions of "Tenancies and the Common Law (19:XI)"

Residential landlords and tenants have a duty to mitigate their damages where either has a claim against the other for losses due to the other’s breach of the agreement (RTA, s 7(2)). Where a tenant ends the tenancy illegally, or vacates or abandons the rental unit other than in accordance with the RTA, the landlord has a duty to re-rent the rental unit at a reasonable price. Failure to do so may result in reduced compensation. See RTB Policy Guideline 5: Duty to Mitigate Loss.  

Under the RTA, a landlord has no right to distrain (i.e. seize) a residential tenant’s personal goods for default in rental payment, nor may the landlord seize a tenant’s personal goods to satisfy another claim or demand, unless the seizure is made by a person authorized by a court order or an enactment (s 26(3) and (4)). If a landlord seizes goods contrary to s 26(3), the tenant may apply to the court for an order to return the property, or for a monetary claim for damages. Note that a landlord may distrain the tenant’s goods where the tenant has abandoned the rental unit.   

Where an enforceable term or condition has been breached, a number of remedies are available. The availability of remedies is restricted,  however, by the type of breach (i.e. material term, or not) and conduct involved.  

A term’s breach may entitle the innocent party to put an end to the agreement, and either regain possession (landlord) or vacate the rental unit (tenant). Compensation or damages, in addition to termination, may also be available. However, it is risky to assume a breach is fundamental enough to put an end to an agreement, for if the party who makes that assumption is wrong, they may be held to be in breach and liable for damages. It is better to have such matters adjudicated.  

Under s 6 of the RTA, action for debt may be taken for rent arrears, e.g. where there is an early ending of the tenancy by the tenant and loss of rent.  

Under s 7(2) of the RTA, any time a monetary claim arises between landlord and tenant, both have a duty to mitigate damages (i.e. minimize losses). For example, if a tenant breaks a lease that was for a fixed term of one year, the landlord could sue the tenant for the balance of  the rent payments. Nonetheless, the landlord has a duty under s 7(2) to try to minimize his or her loss by re-renting the rental unit as soon  as possible, rather than just suing the tenant for the whole year’s rent. See RTB Policy Guideline 5: Duty to Mitigate Loss.  

An Arbitrator may award “compensation” to an innocent party (a tenant or landlord) who has suffered direct loss due to a “contravention” of the RTA by the other party.  

Persons merely in possession can enforce a covenant or condition of a residential tenancy agreement, take the above action, or be acted against.Specific performance may also be an applicable remedy. This does not apply to an illegal squatter.   

Section 95 is a penalty section, which states that breaches of the listed sections (mostly landlord breaches) are punishable by fine. While it  would appear that there has been little resort to this offence section, it may be prudent to advise landlords of this potential consequence of a breach (see [[Dispute Resolution in Residential Tenancies (19:X)#1. Disputes Covered by Dispute Resolution | Section X.A.1: Disputes Covered by dispute resolution]]).

A class action is an action taken by one or more persons on behalf of a number of people who have a common interest in that action. Where the  matter involves more than one person with a common interest, an order may be made affecting all persons who have the same common interest. Note that for hidden rent increases, the RTB may limit the application of its order to one or more of the affected rental units. If several tenants seek a joint hearing, under the RTA, an Arbitrator may hear the cases jointly without the consent of the landlord.