A B.C. Supreme Court judge has denied a Surrey landlord's petition for a writ of possession and a declaration that its tenant – King's Barber Shop – was in default of its lease and must move on.
The case was heard in New Westminster, with Justice Dennis Hori presiding, involving Masood Qayumi, doing business as King's Barber Shop, related to a commercial lease of a property at Unit 2 12044 88 Ave. where Qayumi is the tenant. Other tenants in the building include a daycare and some residents.
"The lease does not establish any pre-conditions that the tenant must meet before exercising his option to renew and the Lease does not give the landlord any option to refuse the tenant’s renewal," Hori decided. "Accordingly, on this basis alone, the landlord’s petition is dismissed and the tenant’s renewal of the lease is validated."
The landlords are two numbered companies: 0881789 B.C. Ltd. and 0881789 B.C. Ltd.
The landlord's petition called for an order that the lease expired on Jan. 1, 2022 and Qayumi has been overholding the premises since then, a writ of possession, an order that Qayumi isn't entitled to renew the lease on grounds he was in default of the terms, an order for double the rent since Jan. 1, 2022 or, alternatively, an order for a rent increase if the lease is renewed.
Qayumi, for his part, petitioned the court to declare the lease valid, that he "validly exercised his option to renew the lease," and an injunction restraining the landlord "from interfering" with his used of the leased premises.
Hori noted in his Jan. 21 reasons for judgment that the lease, which began Jan. 1, 2017 and ended Jan. 1, 2022, included in the document a handwritten and initialed phrase "with a five year option" with a provision for month-to-month tenancy if the tenant kept possession, after the lease expired, with the landlord's consent with this becoming "terminable" if either the landlord or tenant gave one month's notice.
The judge decided another handwritten insertion, not initialed that reads "If tenancy is continued after five years" is "unfortunately" not a complete sentence "and, as a result, has no meaning."
"In this case, I do not see any business efficacy to a term allowing the landlord to refuse to renew the lease when the tenant exercises his option to renew," he reasoned. "Such an implied term would render the Tenant’s option to renew meaningless because the Landlord retains the ultimate discretion to allow the renewal or not. In such a circumstance, business efficacy dictates that the Lease remain silent on a renewal and simply leave it to the parties to re-negotiate a new lease at the end of the term."
The court heard Qayumi delivered written notice on July 19, 2021 he wanted to exercise his option or renew the lease for five more years and the landlord responded by email on Aug. 10, 2021 it would not renew the lease and expected the tenant to vacate the premises by Jan. 1, 2022.
Hori found the landlord's letter to be "of no consequence."
"Further, the Landlord’s intention not to renew the lease is not relevant. The lease does not give the landlord the right to refuse the renewal. It is also of note that the Landlord’s response of August 10, 2021, does not allege any breaches of the lease as a basis for its refusal to renew."
On Oct. 5, 2021, the landlord in a letter then listed alleged breaches that resulted in its reasons for denying the lease renewal, namely repeated late payment of rent, "failing to conduct his business in a reputable manner by allowing his staff and customers to use another tenant’s parking slots; smoke cigarettes in a non-smoking area; talk loudly and use offensive language" as well as "engaging in loud parties after business hours; and subletting the leased premises without the landlord’s consent."
The landlord also cited renovations made without its consent.
But the judge the judge found this, except for evidence related to the late payment of rent and the renovations, "is largely hearsay and conjecture."
"I find that the evidence of the tenant’s disreputable conduct is not reliable. Therefore, I find that the landlord has failed to establish any breach of the lease on these grounds."
Hori noted there there was no allegation the rent was in arrears at the time of the lease renewal. "The landlord’s evidence is that over the first five-year term of the lease, the tenant was late paying his monthly rent on ten occasions. The documents tendered by the landlord in support of this allegation show that on one occasion the payment was 14 days late and on another occasion it was 13 days late. With respect to the balance of the late payments, the tenant made those payments between one and five days after the payments were due.
Failing to pay rent on time, he continued, "is not a sufficient basis to deny the tenant his option to renew the lease. The rental payments were not in arrears at the expiry of the first lease term and the tenant remedied the late payments within a short period of time."
Hori further reasoned that renovations made by the tenant "were obvious to anyone, including the landlord, who entered the leased premises. The landlord made no complaint about the renovations until after the term of the lease expired."
The judge concluded that as a result of his decision to let the lease renewal stand, "the injunction orders sought in the tenant’s petition are not necessary. The landlord is expected to comply with the terms of the lease."
