Case study

Wab had a basement apartment in his house that was vacant. On August 5, Domenica and Wab signed a two-year lease for the apartment to start September 1, at a monthly rental rate that was within Domenica's budget and very low for the neighbourhood. Domenica paid the first month's rent as a deposit. The location was ideal for Domenica because it was a 10-minute walk to the college campus, and Wab was agreeable to the rate as Domenica had excellent references from her previous two landlords. On August 15, the town passed a by-law that prohibited the rental of basement apartments in residential neighbourhoods but allowed those apartments already occupied to continue being used until the existing lease expired. The by-law came into force immediately. Wab contacted Domenica to let her know about the town's new by-law and that he would not be able to honour the lease they had signed. Domenica replied that she could not find an equivalent apartment in the neighbourhood at that rate and refused to accept Wab's termination of the lease. Domenica told him she had paid her deposit and would be moving in on September 1 as agreed in the lease, or she would be suing Wab for damages. (LO0 7.1,7.2, 7.4, 7.5, C 7.6) a. Is Domenica able to enforce the lease agreement? If not, would she be successful if she sues Wab? b. What defence, if any, could Wab use in this situation? Was there anything that could have been added to the lease to address this possibility? c. What would be the result if Domenica suggested Wab change the lease to start August 1?