Home Trust Company (HTC) applied to set aside a residential tenancy agreement between the Landlords (Ahmad Mahmood and Shanaz Bigem) and the Tenants (Uzair Rashid and Aimen Rashid) for a property under mortgage.
The Landlords had defaulted on the mortgage, and the lease was entered into after default, with rent significantly lower than mortgage payments.
The court found that the lease was made with the object of discouraging HTC from taking possession or adversely affecting the property's value, satisfying the three-pronged test under section 52 of the Mortgages Act.
Despite the Tenants' unawareness of the Landlords' circumstances, the application was granted.
The tenancy agreement was set aside, possession was granted to HTC, and the Tenants were given until November 1, 2024, to vacate, with an order to pay outstanding rent to HTC.
The Landlords were ordered to pay HTC's costs.
