The appellants appealed a Landlord and Tenant Board order that found them liable for rental arrears based on a monthly rent of $5,500.
The appellants had sold their home to the respondents in a complex transaction intended to lower their mortgage payments, with an alleged agreement to rent the property back for $2,000 per month.
The Divisional Court allowed the appeal, finding that the Board exceeded its jurisdiction because the essential character of the dispute involved a suspicious transfer of ownership and a failure to agree on essential lease terms.
The Court held that the Board erred in law by relying on an unsigned draft lease to establish the legal rent and failing to ascertain the real substance of the transaction under section 202 of the Residential Tenancies Act.
The matter was directed to be resolved in the Superior Court of Justice.
