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RTA - Non-Payment of Rent (3). Parousis v. Centurion Property Associates Inc. [where both n-p rent and persistent non-payment grounds advanced; s.82 issue]
In Parousis v. Centurion Property Associates Inc. (Ont Div Ct, 2025) the Ontario Divisional Court dismissed a tenant's RTA s.210 appeal, this brought against decisions finding the appellant was persistently "late in paying rent, and ordering consequential terms for timely payment of rent in future".
In this procedurally divided case, Corbett J ruled against the tenant on termination for 'persistent lateness of rent' grounds (the other separate ground was 'non-payment of rent'), and makes the entirely valid point that RTA s.82 (tenant's rights setoff against non-payment termination) is only available for non-payment of rent terminations, despite the similarity of grounds between the two (ie. both dealing with unpaid rent). The case also addresses remedies for persistent non-payment of rent grounds.
I note incidentally that s.82 is presently undergoing some amendments (requiring half of the disputed amount to be deposited in court) that make it more difficult to use [2025, c.14, Sched. 12, s. 6(2)] - this already on top of a 'prior notice' of it's use at the hearing requirement:[4] The Residential Tenancies Act, 2006, SO 2006, c. 17 (the “RTA” or the “Act”) confers exclusive original jurisdiction on the LTB to adjudicate residential tenancy disputes, including disputes about rent. Among other things, the Act recognizes two distinct yet related sets of issues: (i) arrears of rent; and (ii) persistent late payment of rent. Both may arise from the same fact situation. Both may be pursued by a landlord, and it is for the LTB to decide how it will process the issues before it – whether (i) in two proceedings, with two sets of potential remedies – or (ii) in one proceeding with remedies encompassing the entire course of conduct.
[5] In this case, the landlord pursued separate complaints regarding persistent late payment and rent arrears. The LTB dealt with the late payment issue first, on a final basis, finding that Ms Parousis had been persistently late in paying her rent, and ordering her to pay the full amount of her rent, every month, on time, for a year, or face an eviction order. This is a remedy made in the ordinary course by the LTB when it finds persistent late payment of rent.
[6] At the same time, proceedings were ongoing before the LTB in respect to arrears. Those proceedings had not been concluded at the time of this appeal. Those proceedings will determine outstanding issues over the total shortfall (if any) as of the time of the hearing into arrears.
[7] The appellant essentially makes three arguments to this court for her position that the “persistent late payment” order was made in error:....
b. The Act permits a tenant to raise counterclaims against a landlord in defence of a landlord’s claims for arrears. Such counterclaims are not available in defence of a landlord’s claims that rent was persistently late. To give effect of the ability to counterclaim against arrears, the Act must be construed to preclude claims of persistent late payment when those claims are related to an outstanding claim for abatement; and
.... [8] I would not give effect to these arguments for the following reasons:....
b. Rent is due, in full, each month (for most residential tenancies). Tenants are not permitted to grant themselves a rent abatement and for that reason underpay their rent. In the absence of an order from the LTB granting a rent abatement, failure to pay rent as it falls due is “non-payment” of rent to the extent of the shortfall. Where a landlord pursues a claim for arrears before the LTB, it is efficient for the LTB to determine the state of accounts between landlord and tenant on a final basis. Thus, the Act permits that abatement claims may be raised in an arrears proceeding: this provision does no more than confer on the LTB the ability to deal “with everything outstanding” in the arrears proceeding, but it is not a legal excuse for the tenant to have failed to pay rent as it fell due. Where a landlord pursues both a “persistent late payment” claim and an arrears claim, it is open to the LTB, and consistent with sound application of the Act, for the LTB to order a tenant to pay the full amount of rent monthly, without abatement, and for the LTB to subsequently adjudicate whether rent abatements should be granted when calculating any arrears that may be owing..... ....
(b) There is nothing in the Act that permitted Ms Parousis to withhold the rent she withheld
[14] The LTB stated that “[t]here is nothing in the Act that allows the Tenant to withhold rent” (Decision, para. 8, quoted above).
[15] Ms Parousis argues that s. 82(1) of the Act does permit withholding of rent.[1]
[16] Subsection 82(1) of the Act provides:At a hearing of an application by a landlord under section 69 for an order terminating a tenancy and evicting a tenant based on a notice of termination under section 59, the Board shall permit the tenant to raise any issue that could be the subject of an application made by the tenant under this Act….[2] [17] Subsection 82(1) does not expressly authorize a tenant to withhold rent.
[18] Ms Parousis argues that withholding of rent is implicitly authorized by s. 82(1): if it was not so, then there would be no need or purpose permitting tenants to assert rent abatement claims in proceedings brought by landlords respecting rent arrears (applications brought under s. 69 of the Act).
[19] With respect, the implication proposed by Ms Parousis does not flow from s. 82(1). The language of s. 82(1) is restricted to proceedings respecting arrears pursuant to s. 69 of the Act, making it clear that tenants are not entitled to self-abate their rent: s. 82(1) does not apply to proceedings for persistent late payment of rent brought pursuant to s. 58(1) of the Act.
[20] What s. 82(1) does is to restrict proliferation of separate proceedings before the LTB. A tenant may wrongly self-abate rent, and this self-abatement may be bound up in a landlord’s application in respect to rent arrears. Where this has happened, it is expedient for the LTB to adjudicate the arrears and the abatement issues at the same time. Thus, when the hearing is over, outstanding issues related to the state of rental accounts will be resolved.
[21] Persistent late payment is different. Where a tenant fails to pay the full amount of rent, repeatedly, the LTB has the jurisdiction to order that rent be paid in full, on time, on an ongoing basis, even if there is an outstanding contest over arrears and claims to abatement. Nothing in s. 82(1) provides anything to the contrary, either expressly or by implication.
(c) Application of Tataw v. Minto Developments, 2023 ONSC 4238
[22] The LTB cited and quoted from paras. 14, 19 and 21 of this court’s decision in Tataw v. Minto Developments, 2023 ONSC 4238 in its consideration of the appropriate remedy to grant for persistent late payment of rent in this case, following which the Board found:The Landlord’s arrears will be determined pursuant to their non-payment of rent application. The Tenant has lived in the rental unit since 2012 and has historically shown that she can pay the rent on time. Therefore, I believe that the Tenant will comply with an order if issued. The conditional order also fairly addresses the Landlord’s concerns with getting their rent on time and in full. Therefore, a conditional order shall issue. [23] The conditional order provided for the prospective payment of rent, in full, on time, for a period of 12 months, ending with the payment on October 1, 2024, failing which the Landlord could apply to the LTB, without notice to the Tenant, for an eviction order.
[24] The LTB correctly interpreted and applied Tataw in this case. Remedies are available for persistent late payment of rent where that persistent late payment is also the subject of an arrears application before the LTB. The LTB’s order was prospective, directing future payment of rent in full, and on time, and did not decide questions related to the calculation of arrears or the tenant’s abatement claims.[3] The parties drew to this court’s attention a competing lines of authority at the LTB which, it is argued, hold that payment default issues may be addressed in arrears proceedings, or in persistent late payment proceedings, but should not be addressed in both. These lines of authority appear to misread Tataw and should not be followed in future cases: the approach taken by the Board in this case was correct in law.
[25] The LTB, in its factum, also noted that there are cases in which the LTB has found that landlords may apply rent payments first to arrears, leading to a situation where any case involving continuing arrears will give rise to “late payment” until arrears have been extinguished (O’Brien v. Nutson, 2021 CanLII 9188 (ON LTB), paras. 8-12; Re TSL-57374-RV, 2015 CanLII 9133 (ON LTB), para. 4; Behfar v. Ellis, 2022 CanLII 13761 (ON LTB), para. 12). These cases all pre-date Tataw, and do not seem consistent with it. However, the LTB did not address this principle in the case at bar, and there is no need to say anything further in this case beyond finding that the LTB dealt with the arrears issue appropriately in this case, in accordance with the facts it found, the applicable legal principles, and through an appropriate exercise of the LTB’s discretion.
[26] Tataw answers Ms Parousis’ concerns about procedural unfairness. It is not unfair that a tenant be ordered, prospectively, to pay their rent in full and on time pending final disposition of arrears and abatement issues. It is open to the LTB to make such an order in a separate proceeding, rather than within the arrears / abatement proceedings. I see no unfairness in the procedural choices made by the LTB in this regard. Further and in any event, if both sets of issues were in one proceeding, rather than two, this would not be a basis to defer an order arising from persistent late payment until final adjudication of the arrears / abatement issues. To the contrary, it is consistent with the Act that the LTB deal with persistent late payment allegations promptly to respond to tenants purporting to self-abate their rent – something tenants are not entitled to do under the Act.
Disposition
[27] As was noted by the LTB, Ms Parousis has been a tenant of the landlord since 2012 and had a long history of timely payment of rent. It was evident that Ms Parousis sincerely believes that the Landlord has failed in its obligations, and she has been pursuing her claims respecting those alleged failures with determination. What she may take from this decision is that her decision to withhold rent in response to her assessment of the Landlord’s conduct was not authorized by the Act. She was not entitled to withhold rent. She was entitled to pursue her claims that the rent charged was not lawful or that the rent ought to be abated, but until those issues were decided in her favor by the LTB, she was required to pay the full amount of the rent, on time, each month.
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