Tenancy and Equitable Ownership – Not Mutually Exclusive

  • October 08, 2019
  • Gillian Fournie, partner, de VRIES LITIGATION LLP

At first glance, being a tenant (with full tenancy rights) and an equitable owner of a property are mutually exclusive. However, in Warraich v Choudhry et al, 2019 ONSC 2656, the Ontario Superior Court of Justice confirmed that both sets of rights can coexist.

In March 2012, Choudhry purchased a property for $519,000.00 with the intent to redevelop it. He asked his long-time friend, Warraich, to help him with the redevelopment. A month later, Warraich moved into the property with his family. For the first year, Warraich paid rent to Choudhry based on an informal agreement between them. In March 2013, they formalized their agreement and Warraich signed a rental tenancy agreement. Over the next few years, Warraich also paid Choudhry a total of $62,000.00 and paid $20,025.88 to hire a consulting company to assist with obtaining the permits to redevelop the property and navigate the Committee of Adjustments process.

The friendship between Choudhry and Warraich eventually took a turn for the worse. Warraich stopped paying rent, and Choudhry asked him to move out. In 2016, in an effort to resolve matters, Choudhry and Warraich signed a handwritten “trust agreement” about the property. However, they remained unable to agree and turned to the courts for resolution.