Apartment landlord’s attempt to increase rent denied in Mississauga, Ontario

As Canadians continue to stretch their budgets to afford the rising cost of housing, some large corporate landlords continue to apply for above-guideline rent increases in Ontario, sometimes unsuccessfully, as was the case in one Mississauga apartment building.

In a decision dated Nov. 16, Ontario’s Divisional Court upheld a ruling from the Landlord and Tenant Board (LTB) against landlord O’Shanter Development Company Ltd’s request for a rent increase above rental guidelines for over 170 tenants, according to court documents obtained by Insauga. 

The court’s decision, made by Justice Wilkinson, dismissed an appeal by the landlord regarding their 133-unit residential complex at 2150 Bromsgrove Rd. Although not mentioned in the court’s decision, the building is actually owned by a BC-based company named Mason Investments Inc. and is managed by O’Shanter. 

In Ontario, landlords must file an L5 Application with the LTB to request an increase in rent beyond the annual guideline amount. The landlord filed a request on June 3, 2019, seeking a rent increase beyond the guideline to offset the $388,202 paid to purchase new appliances for rental units, complete drain repairs, and complete elevator modernization work in the residential complex. 

The rent increase guideline for 2024 is 2.5 per cent, which is the maximum a landlord can increase most tenants’ rent during a year without the approval of the LTB. 

The guideline applies to most tenants, such as those living in rented accommodations, care homes, mobile homes and land lease communities. It does not apply to new buildings or additions to existing buildings occupied for residential purposes for the first time after Nov. 15, 2018. It also does not apply in situations where a new tenant is renting an existing unit, community housing units, long-term care homes and commercial properties. 

In October, the average monthly rental rate for a one-bedroom apartment in Mississauga was $2,352 and $2,851 for a two-bedroom.

The LTB did not respond to O’Shanter’s application for over two and a half years.

Early last year, the board sent an email to the landlord’s paralegal, John Andrade, outlining deficiencies in the L5 application. In May, the landlord was again asked to address issues in the application. The company was also asked to give a copy of the hearing notice to the tenants, as well as a copy of an updated L5 application. 

The deadline to do so was June 2, 2022.

In August 2022, the landlord’s paralegal said the company never received the notices from the LTB and was not aware of the deadlines, and Andrade requested that a new hearing date be scheduled.

On Aug. 24, 2022, the LTB denied Andrade’s request, referencing other cases involving the same landlord, for which Andrade had also requested the rescheduling of hearings as a result of documents being misfiled. The board said it had sent hearting notices to two email addresses associated with the paralegal, and neither had bounced back.

On Sept. 16, 2022, the LTB dismissed the landlord’s application, which the landlord then appealed.

The Divisional Court, which heard the case, ruled that the landlord was given proper notice by the LTB throughout the application process.  

The court did not identify any breach of natural justice in the hearing process.

In the decision, Justice Wilkinson noted, “This matter did not get as far as a hearing. The board exercised its discretion to deny the landlord’s procedural requests. The board could have denied the landlord’s requests solely on the basis of the landlord’s failure to take action after having received the May 13, 2022 correspondence…”

Although the landlord’s lawyers did not respond to Insauga’s request for comment, the president of O’Shanter, Jonathan Krehm, acknowledged his company’s error with some reservations.

“A notice was missed. It’s our fault,” he told insauga.com.  

“In our opinion, in our lawyer’s opinion, no one’s rights [would be] affected if we were given an extension of time [to] correct this missed deadline.”

When asked if his company or the land owner had any plans to appeal the decision, Krehm said no. 

“We’re highly unlikely to appeal this. Pushing a stone uphill doesn’t work.”

He said that over the course of his 40-year career in the industry, he has been left with the impression that “in general, the courts regard rental housing law as a matter beneath them. They don’t like to deal with [it], and they tend to be very dismissive and somewhat arbitrary in their decision-making. We were dismissed on a technicality, and we think it’s very unfair, particularly in the context of the Ombudsman report about the rental housing tribunal in this province, which is a complete shambles.”

The report Krehm refers to was published in May 2023 by Ontario Ombudsman Paul Dubé, entitled “Administrative Justice Delayed, Fairness Denied,” in which his office investigated backlogs at the LTB. The report paints a grim picture. 

The Ombudsman’s investigation “revealed that the board’s outdated technology also limited its ability to pivot effectively when the pandemic hit, further compounding delays. In 2021, when the board began to transition to a new system promising greater efficiencies, it first had to contend with scores of technical glitches.” 

The report goes on to say that “while there has been some slight fluctuation in the volume, the queue has not been substantially reduced, and now stands at more than 38,000 applications. Where once it took the board a matter of days to schedule hearings, it now takes an average of seven to eight months.” 

The report says that as of February 2023, landlord applications were generally being scheduled for hearing within six to nine months of receipt, and tenant applications could take up to two years to be scheduled.

Consistent with the “technical glitches” mentioned in the Ombudsman’s report, Krehm noted that his company has an unrelated matter scheduled for Dec. 4, and, as of late November 2023, he notes that “there’s material that’s not in the [online] portal that we know exists. And so, you know, it’s supposed to all be there… You can’t depend on it. You show up to an online hearing, and you don’t know whether you’ve got [access to] all the material that was filed.”

When contacted for comment about the proceedings involving the original L5 application, the reason for the two and half year delay, and the landlord’s past history of missing procedural deadlines, Tribunals Ontario provided Insauga with a copy of the adjudicator’s reasons for decision in the case.

The reasons stated, “the Landlord and Tenant Board (LTB) does not comment on decisions nor does it comment on the merit of applications outside of its published decisions. Adjudicators are independent decision-makers with the exclusive authority to make decisions in accordance with the relevant LTB statutes and legislation. How adjudicators apply laws in any particular matter will depend on the unique facts of the case, the requests made by the parties, and the submissions and supporting documentation put before the LTB.”

– Ryan Keeney has been a lawyer in Ontario since 2014 and serves as in-house counsel to Insauga.