Application: HTC seeks to set aside a residential tenancy agreement.
Background:
August 19, 2021: Landlords (Mahmood and Bigem) took a $1,136,000 mortgage from Computershare Trust Company of Canada (CTCC), transferred to HTC in October 2022.
Mortgage defaulted on September 1, 2022.
April 6, 2023: HTC obtained a default judgment for arrears of $1,318,102.12 plus 9.25% annual interest.
Property rented to Uzair and Aimen Rashid on September 15, 2023, for $4,900/month, insufficient to cover mortgage payments.
Legal Issues:
HTC argues the lease was intended to hinder HTC’s foreclosure and devalue its interest.
The lease was signed post-default, and rent was significantly lower than mortgage costs.
HTC filed under Section 52 of the Mortgages Act to set aside the lease.
Court's Analysis:
Section 52 Criteria:
Lease must be entered into by the mortgagor.
Lease must be in contemplation of or after default.
Lease must discourage the mortgagee from taking possession or devalue the property.
Findings:
Lease was post-default with insufficient rent.
Court inferred lease aimed to obstruct HTC’s foreclosure.
Decision:
Lease between Uzair and Aimen Rashid with Ahmad Mahmood and Shanaz Bigem is set aside.
Respondents must surrender the property at 963 Fielder Drive, Mississauga, ON.
HTC may issue a Writ of Possession.
Tenants cannot be evicted before November 1, 2024.
