As part of a new series, the Star is answering common questions about renting in Toronto. Do you have questions that you want us to answer? Email the Star at renterFAQ@thestar.ca.

The question:

Imagine this scenario — you’re a landlord who evicted your basement tenant a few months ago for personal use, whether it’s for your immediate relative who needs a long-term place to stay or you find yourself needing more space in the house.

But now you realize you don’t actually need the basement after all, and want to put it back on the rental market.

That was the scenario outlined by one reader to the Star’s renterFAQ series.

The landlord wanted to know — if he rents his basement out again, does this count as a bad-faith eviction of the previous tenant?

The answer:

It does not count as a bad-faith eviction if the landlord can prove that their intentions were good at the moment they issued the N12 notice that terminated the tenancy, says Harry Fine, a paralegal and former adjudicator on the Landlord and Tenant Board (LTB).

An N12 notice can be issued in two instances: if a landlord has signed an Agreement of Purchase and Sale of the rental unit and the purchaser or their parent, spouse or child, or spouse’s parent or child, intends to move in; or, if the landlord requires the unit for their own use, or for the use of an immediate family member, defined as the owner’s parent, spouse, child, and spouse’s parent or child, for a minimum of one year.

An example of serving an N12 notice in good faith would be a landlord who initially decided they needed more space for their family but then lost their job and decided to continue renting as a source of revenue, Fine said.

Another example is if a parent intends to move their adult child into a unit at the advice of a mental health professional. If the circumstances change and the professional advises against the child living on their own, the landlord can in good faith rent the unit again, even if the child had never moved in, Fine said.

Landlords must be able to prove that circumstances changed in addition to having good and honest intentions when they issued the N12 notice, Fine said.

He added, “I would have three words of advice to give to a tenant who gets an N12 notice, don’t move out.”

Even though a landlord must give tenants at least 60 days notice before termination, tenants do not have to move if they doubt the landlord’s claim, Fine said.

They have the right to wait until they are issued to do so by the Landlord and Tenant Board at a hearing where the landlord must prove the legitimacy of their claims, Fine said.

He added many tenants often leave without ever checking whether the landlord was truthful and do not know that they might have a right to some compensation.

Landlords are required to pay the tenant one month’s rent compensation or offer an acceptable alternate rental unit when terminating a tenancy based on own use, according to amendments made to the Residential Tenancies Act in 2017. There is no compensation if the N12 is on behalf of a purchaser.

If a landlord knowingly ends a tenancy by giving notice in bad faith, they can face a fine of up to $25,000 for an individual, according to the 2017 amendments.

If a tenant believes they were served an N12 notice in bad faith, they can file a T5 form which will require the landlord to prove the legitimacy of their claim, Fine said.

“If a person’s intention isn’t settled, you shouldn’t give the notice,” Kenn Hale, legal director of the Advocacy Centre for Tenants Ontario, said of landlords considering an N12 eviction. “Especially when you really have the opportunity to profit over a mistake, I find it hard to believe that these are mistakes when the landlord ends up doubling the rent.”

Benjamin Ries, a housing lawyer at the University of Toronto’s Downtown Legal Services clinic who has spent years handling Canadian and international students’ off-campus housing issues, said these rules are much needed to protect vulnerable renters in Toronto’s hot rental market, and should go even further.

He said those who have sought legal advice from the DLS have included students who prepaid thousands of dollars in rent only to be illegally kicked out soon after.

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“In other cases landlords have brought fraudulent own-use eviction applications against students, claiming the landlord or a family member wanted to move in — but actually intending to sell or rerent the apartment for much more money,” Ries said.

Whatever the reasons may be, Ries believes this puts students in compromising and dangerous positions because they are in most cases rendered homeless for the time being or find themselves chasing their landlord through court systems in hopes of getting their money deposits back.

Correction – Sept. 20, 2019. This article was edited from a previous version that incorrectly said both landlords and purchasers must intend to stay in a unit for one year under an N12 eviction. In fact, the one-year period only applies to landlords.

With files from Osobe Waberi, David Venn and Miriam Lafontaine.