A commercial tenant may apply to court for relief from forfeiture when faced with the termination of its lease by a landlord, but can a residential tenant also seek such relief?  That question was recently answered by a 5 member panel of the British Columbia Court of Appeal in Ganitano v. Metro Vancouver Housing Corporation, 2014 BCCA 10.

In Ganitano, a residential tenant had leased the same townhome for 28 years but had repeatedly failed to pay rent when due.  The landlord eventually terminated the tenancy by following the procedure set out in the Residential Tenancy Act (British Columbia) and delivering a statutory notice of termination to the tenant.  The termination was upheld by a Dispute Resolution Officer from the Residential Tenancy Branch, but the British Columbia Supreme Court subsequently granted the tenant relief from forfeiture and reinstated the tenancy pursuant to the Law and Equity Act (British Columbia), which allows a court to “relieve against all penalties and forfeitures” on such terms as the court thinks fit.

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On appeal, the Court of Appeal held that equitable relief is not available where a residential tenancy is terminated in accordance with the statutory procedure set out in the Residential Tenancy Act.  The court noted that the statute establishes a comprehensive scheme for dealing with matters relating to non-payment or late-payment of rent in the residential tenancy context.  To terminate a residential tenancy, a landlord must follow the procedures set out in the Residential Tenancy Act, which specifically eliminates certain typical landlord remedies (such as distress) and provides that a tenancy ends “only” in the circumstances set out in the statute.  If a landlord terminates a tenancy due to non-payment of rent and the tenant fails to pay the rent or dispute the termination notice within a specified period, the tenant is “conclusively presumed to have accepted that the tenancy ends”.  In other words, the Legislative Assembly made it clear that a tenant’s failure to respond within the statutory time limit to a termination notice issued in accordance with the Residential Tenancy Act will, by operation of law, bring a tenancy to an end and entitle the landlord to regain possession.  Such a termination is a statutory forfeiture that is beyond the equitable jurisdiction of the court to grant relief under the Law and Equity Act.