Simon's Megalomaniacal Legal Resources

Residential Landlord and Tenant (Ontario) Legal Guide

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Chapter 1 - Fundamentals
(01 September 2020)

1. Overview
   (a) General
   (b) Coverage of the Guide
   (c) Sources and Conflict of Laws
   . Overview
   . Canadian Constitution - Division of Powers
   . Canadian Charter of Rights and Freedoms
   . Ontario Human Rights Code
   . Residential Tenancies Act, 2006
   . Contract Law and Common Law
   . Frustrated Contracts Act
   . Statutory Powers Procedures Act
   . Condominium Act
   
2. Formation of a Tenancy
   (a) Overview
   (b) Licenses Distinguished
   (c) Commencement
   (c.1) 'Agreements' to Enter into Tenancy Agreements
   (d) Transfer or Sale of Rental Property by Landlord
   (e) Periodic v Term Tenancies
   . Basics
   . Automatic Renewals
   (f) Statutory v Contractual Tenancies
   (g) Negotiating a New Tenancy
   . Overview
   . Factors Which May be Assessed by Landlords
   . Rent Deposits Refunded if Not Applied
   . Documentation Required
   . "Serious Breach" Notice, if required
   (g.1) New 2017 Standarized RTA Leases
   . Overview
   . Tenancies to Which the Standardized Lease Requirement Applies
   . . The 'Mandatory' Standardized Lease Regime
   . Irregular Leases
   (h) 'Illegal' Tenancies
   
3. Landlords, Tenants and Their Legal Manifestations
   (a) Overview
   (b) Sole Proprietors
   (c) Partnerships
   (d) Corporations (also "body corporate")
   (e) Fiduciaries (of all types)
   (f) Mortgage Proceedings
   (g) "Landlord" Summarized
   (h) "Tenant" Summarized
   
4. Spousal Assumption of Tenancy on Death or Abandonment
   (a) Overview
   (b) Death of Tenant
   (c) Abandonment by Tenant
   
5. Subletting, Assignments and Similar Arrangements
   (a) Overview
   (b) Distinguish Sub-lets from Joint Tenancies and Shared Occupation
   (c) Sub-letting and Related Procedures
   . Overview
   . Tenant Right to Sub-let
   . Sublet Fees
   . Legal Consequences of a Subletting
   . Tenant's Application to Terminate and Evict a Sub-tenant for Cause
   . Application to Evict an Overholding Sub-tenant
   (d) Assignments and Related Procedures
   . Overview
   . Tenant Right to Assign
   . Request for General Consent to Assignment and Tenant's Right to Terminate on Refusal or Silence
   . Request for Specific Individual Consent to Assignment and Tenant's Right To Terminate on Refusal or Silence
   . Assignment Fees
   . Legal Consequences of an Assignment
   (e) Tenant Applications On Refusal of Consent
   (f) Unauthorized Assignments and Overholding Subtenants
   . New Tenancy Negotiation
   . Application to Evict
   . Deemed Assignment on Inaction
   
6. Terminology Notes
   (a) Purpose
   (b) Abbreviations
   (b) "Residential Unit"
   (c) "Rental Unit"
   (d) "Residential Complex"
   

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Note Re: Special and Exempt Premises:

Some residential rental premises - such as care homes, mobile home parks, land lease communities, student accomodation, superintendent's premises, social housing, premises under mortgage proceedings - and others - may be exempt from all or part of the Residential Tenancies Act (RTA), or may be subject to special RTA provisions. Readers should review Ch.2: "Special and Exempt Premises" to check if this is the case for their specific premises.

Note Re: Offences

Many breaches of the Residential Tenancies Act are also prosecutable offences. Readers may want to review Ch.17: "Offences" regarding specific breaches.

1. Overview

(a) General

Historically, landlord and tenant (L&T) law grew out of the old English feudal system that has had a huge impact on social ordering to this day. Today however, landlord and tenant law in all Canadian jurisdictions - including Ontario - is heavily codified in statute law.

Today's Ontario L&T law is governed by two main statutes: the Commercial Tenancies Act and the (new at February 2007) Residential Tenancies Act (RTA). The first of these is much closer to the old feudal form but has also undergone much modification. As well the trend in judicial interpretation is to impose modern contract law principles over the whole legal area.

On the other hand residential L&T law is so heavily modified from both the common law and the present commercial statute form as to be almost unrecognizeable, and has been for years. Predecessor residential L&T legislation has included (most recently) the Tenant Protection Act (TPA), the Residential Rent Regulation Act, the Rental Housing Protection Act, and Part IV of the Landlord and Tenant Act (Parts I to III are now the Commercial Tenancies Act) - and even a previous (now repealed) "Residential Tenancies Act, 1979". Both the TPA and the present RTA have merged general residential L&T law with the relatively new "rental control" laws governing and regulating the "legal rent" that may be charged a residential tenant.

The issue of residential L&T law is highly politically charged and full statutory revisions in the area have followed in consistent lock-step with changes in provincial governments for roughly the last 20 years.

Essentially now, modern residential L&T law in Ontario (ie. the Residential Tenancies Act, 2006 or "RTA") is consumer legislation - written to protect tenants from the natural imbalance of power that stems from the fact that the landlord's interest is almost invariably financial (and usually commercial), whereas the tenant's interest that of essential shelter - which in a country such as Canada can be tantamount to physical survival.

That said, other than the insertion of basic natural justice hearing principles into the process, termination and eviction for non-payment of rent and other tenant-'caused' problems is available to landlords who move promptly and competently through the procedures established under the RTA and its predecessors. No fundamental concession has ever been made, in either statute or judicial law, to the ultimate paramountcy of the landlord's financial interest other than discretionary [see Ch.9, s.5(b)] and mandatory [see Ch.9, s.5(b)] granting of relief to defaulting tenants, and conditional ex parte orders (see Ch.8, s.3). The latter of these are - due to their conscious procedural violations of natural justice - only a mixed blessing.

Case Note:
In the interesting case of Cheng Wen Construction v. 2073008 Ontario Inc. (Div Ct, 2011) the court considered a stay pending appeal motion by commercial tenants who operated a boarding housing that the LTB had expressly held to be governed by the RTA. Rather than defer to the RTA's termination and eviction proceedings with respect to the residential tenants, the court approached the matter on a stay/injunction basis and, finding that the commercial tenants had failed to make out their case for injunctive relief, denied the motion - thus essentially authorizing the landlord to obtain vacant possession of the premises outside of the RTA sheriff procedures.

I find the case worrisome for it's apparent consideration of the rights of the residential tenants as an aspect of the 'balance of convenience' of the applicant commercial tenants. A better approach would have been to grants the residential tenants full party status and to assess their rights per se within the injunctive test.

(b) Coverage of the Guide

This program addresses all major areas of Ontario residential landlord and tenant law in detail, including:

• basic concepts and terms [Ch.1];
  
• special and RTA-exempt categories of premises [Ch.2];
  
• tenant rights and remedies [Ch.3];
  
• termination procedures for both tenants and the numerous different termination and eviction procedures for landlords - including the tenant defences [Ch.4-9];
  
• basic rent proceedings, including numerous rent applications as well as the primary and complex landlord application process for "above-guideline" rent increases [Ch.10-12];
  
• practice and procedures before the Landlord and Tenant Board [Ch.13-14];
  
• Board Reviews of Orders, Court Appeals, Civil Court Remedies and Related [Ch.15-16];
  
• prosecutable RTA offences [Ch.17];
  
• rules governing the transition from the previous Tenant Protection Act to the present Residential Tenancies Act [Ch.18].

(c) Sources and Conflict of Laws

. Overview

While the Residential Tenancies Act largely codifies all the law applicable to residential L&T in Ontario, it is not exhaustive. Other sources that can occasionally impact on the area of law include:

• the Canadian Constitution;
  
• the Ontario Human Rights Code;
  
• the common law;
  
• contract law;
  
• the Frustrated Contracts Act;
  
• the Statutory Powers Procedures Act (SPPA).

Any time several laws influence one legal subject area the potential for conflict arises. Below I discuss such conflicts as they relate to each of the above-listed "sources" of law - in rough order of their "paramountcy" (it's not a simple matter of ranking).

. Canadian Constitutional Division of Powers

The Canadian Constitution can be roughly divided into the "old" constition and the "new" Canadian Charter of Rights and Freedoms that Pierre Trudeau led us to in 1982.

The "old" constitution deals primarily with the division-of-powers between the federal and provincial governments, the establishment of the court systems and other such fundamentals of Canadian society. While these basic allocations can give rise to questions regarding Ontario residential L&T law, such issues are rare.

The most recent substantial activity in this area was in two court references Reference re Residential Tenancies Act (Ontario) [1981] 1 SCR 714 and Reference re Amendments to Residential Tenancies Act (Nova Scotia) [1996] 1 SCR 186. The latter of these cases clarified that the establishment of administrative tribunals to exclusively govern residential L&T matters did not offend the historical jurisdiction of the superior courts of Canada.

. Canadian Charter of Rights and Freedoms

It is slightly more likely in future that the Charter portion of the Constitution will be engaged to challenge RTA law. As the Charter is part of Canada's Constitution it has paramountcy over "regular" federal and provincial legislation, regulations and - generally - government actions:

Charter s.24

Charter s.52
While the Charter lists a wide range of rights and freedoms (expression, association, against discrimination, numerous criminal law procedural protections), also contained within it is its own 'balancing' provision [s.1]. Before a 'regular' statute law can be overridden by the Charter, the court (or Tribunal) hearing the issue is required to assess the purpose of the allegedly infringing law or behaviour, whether the law achieves this purpose in the 'least drastic' manner possible, and (less frequently) to determine whether it is a justifiable government purpose in light of the rights infringed.

Case Note: R v Conway (SCC, 2010)

Due to the courts' view that the relationship between landlord and tenant is primarily one of private law, and thus not likely to involve the state action that is necessary to trigger the Charter's protections, it is unlikely that there will be many Charter cases before the Landlord and Tenant Board. However it seems certain that the Board does have jurisdiction to consider Charter law if the need arises.

On the general question of when an administrative tribunal has Charter jurisdiction, the Supreme Court of Canada in the 2010 case of R v Conway (SCC, 2010) had to decide whether the Ontario Review Board, established under the Criminal Code to decide custodial issues respecting persons declared not criminally responsible ("NCR") by the courts, was a "court of competent jurisdiction" for the purposes of considering Charter law and granting Charter remedies under s.24(1) of the Charter. The court took the oppourtunity to clarify and summarize the law with respect to when any administrative tribunal could apply Charter s.24(1). The court held that the primary question was (similar to that discussed in Tranchemontagne regarding the Human Rights Code) whether the tribunal generally had jurisdiction to decide questions of law. Unless that was expressly restricted by statute, then the tribunal had Charter s.24(1) jurisdiction, but could only grant remedies within it's conventional remedial jurisdiction:

[78] The jurisprudential evolution leads to the following two observations: first, that administrative tribunals with the power to decide questions of law, and from whom constitutional jurisdiction has not been clearly withdrawn, have the authority to resolve constitutional questions that are linked to matters properly before them. And secondly, they must act consistently with the Charter and its values when exercising their statutory functions.

.....

[82] Once the threshold question has been resolved in favour of Charter jurisdiction, the remaining question is whether the tribunal can grant the particular remedy sought, given the relevant statutory scheme. Answering this question is necessarily an exercise in discerning legislative intent. On this approach, what will always be at issue is whether the remedy sought is the kind of remedy that the legislature intended would fit within the statutory framework of the particular tribunal. Relevant considerations in discerning legislative intent will include those that have guided the courts in past cases, such as the tribunal's statutory mandate, structure and function ('Dunedin').

The law prior to this was quite similar, though it focussed on requiring that the tribunal have jurisdiction over the parties, the subject-matter, the law, and the remedies sought.

In the few instances where the Charter has been brought to bear on L&T law they have been unsuccessful: Haddock v Ontario (1990) 73 OR (2d) 545 (HC), with rare exceptions Dartmouth/Halifax (County) Regional Housing Authority v Sparks (1993) 30 RPR (2d) 146 (NSCA). Landlord challenges such as Haddock are generally unsuccessful because the Charter does not protect property rights as such.

The new RTA-established "Landlord and Tenant Board" (the "Board") - like many Tribunals - has jurisdiction to consider the Charter in it's proceedings - as long as proper and prompt "Notice of Constitutional Question" is served on all parties and the Attorneys-General of Ontario and Canada (A-Gs), and filed with the Board, "as soon as the circumstances requiring it become known and, in any event, at least fifteen days before the day on which the question is to be argued, unless the court orders otherwise". If Notice is served late, you should expect the Board to be both annoyed (which can result in negative cost awards) and to seriously consider whether it will even hear your constitutitional arguments. At best you can expect the Board to adjourn the proceeding to give the Attorney-Generals and other parties time to consider the constitutional issues. In the case of a bar on constitutional issue being raised, the court would still continue to hear the case on the non-constitutional issues, if any [CJA s.109(2)].

Notice of Constitutional Question
Charter law is complex in both procedures and substance. Anyone considering a Charter challenge to any aspects of Ontario residential L&T law should consult a lawyer, or at least engage in an extensive study of that law themselves well before the need to use it arises.

. Ontario Human Rights Code

Similar in scope to the anti-discrimination provisions of the Charter [s.15] is the Ontario Human Rights Code. The Code expressly includes provisions relating to discrimination in the provision of "accomodation":

Human Rights Code, s.2: "Accomodation".
For years the Ontario Human Rights Commission has been an ineffectual body, more of an impediment to the advancement of human rights arguments than an aid. In 2008 the entire Act was re-written in an attempt to ameliorate this absurd situation. That new legislation is analyzed and explained in this Isthatlegal.ca Legal Guide:

Human Rights Law (Ontario)
Case law, and recently the Supreme Court of Canada (see below) has confirmed that the L&T Board has jurisdiction to consider Human Rights code law in its proceedings.

Case Law: Walmer v Wolch (Div Ct, 2003)

This was an early termination and eviction case (presumably based on interference with reasonable enjoyment of other tenants) which ground of termination gave the schizophrenic tenant a 'remedial oppourtunity' after the first notice. Despite evidence (upon which no fact-findings were made) that the behaviour complained of apparently continued unabated through both the first and a subsequent notice the landlord applied to evict on the basis of the second notice. The court held that the second notice should only have issued had the first notice been remedied by the tenant's behaviour, which it was not. As such the second notice should not have issued and could not form the basis of the application:

[15] The TPA is remedial legislation intended to regulate landlord & tenant relations in a summary way. We hesitate to base ourselves upon 'technical' readings of the statute. But in our view this is no mere technicality. The right to rectify and remain is an important right for tenants. The provision for the second notice, where there is no longer such a right, must be carefully followed by landlords who wish to take advantage of it.

Further, the Board declined to countenance the tenant's argument that the (then) Tenant Protection Act should be applied in light of the Ontario Human Rights Code (HRC) imposition of a duty to accomodate on the part of the landlord, which the tenant argued should inform the Board's relief from forfeiture jurisdiction under TPA s.84(1) [now RTA 83(1)]. The court held this to be an error of law:

While the direct enforcement of the Code by the making of an order is reserved to the Commission, the Code is the law of Ontario and its provisions must inform any Ontario decision maker in its deliberations. Therefore, the appellant submits that the ORHT ought to refuse to grant the order to evict the tenant where a reasonable accommodation to her needs can be made without undue hardship to the landlord. Such a reasonable accommodation to the tenant's needs might be an arrangement whereby the landlord informs the tenant's relatives at the first sign of trouble, so that they can intervene to get her back on her medication.

In reaching this conclusion to court referred to what is now RTA s.3(4), which makes the TPA paramount over all statutes except the HRC, and this provision of the HRC:

Human Rights Code s.47(2)
Where a provision in an Act or regulation purports to require or authorize conduct that is a contravention of Part I, this Act applies and prevails unless the Act or regulation specifically provides that it is to apply despite this Act.

On evidence that remedial efforts were afoot - the court allowed the tenant's appeal and - substituted it's own decision for that of the Board - dismissed the landlord's application.

Case Law: Tranchemontagne v Director (ODSP) (SCC, 2006)

Confirming the principle established in Walmer (above), and much like it did in Conway (above) regarding the Charter, the Supreme Court of Canada in the important 2006 case of Tranchemontagne v Director (ODSP) held that, absent express statutory direction to the contrary, administrative tribunals that could decide questions of law were assumed to be able to consider all laws of the land, not just ones central to their mandate. In this case the Ontario Human Rights Code (OHRC), which was raised by the appellant, should have been applied by the Social Benefits Tribunal (SBT) in assessing whether an exclusion from eligibility for income support for persons whose only restrictions in the activities of daily living were due to alcoholism, was illegally discriminatory. Further, the court held that the SBT had no discretion in the matter so that if the Code were raised the argument had to be considered, and that in this case the tribunal should have considered it. It is important to note that - as is the case with Charter arguments - having jurisdiction to consider human rights law does not expand the remedial jurisdiction of any tribunal, so that even a successful human rights argument can only be provided with remedies conventionally available to the tribunal in question. In Tranchemontagne the result, after re-litigation at lower levels, was that the appellant's ODSP eligibility was granted.

Further, the RTA itself provides that:

RTA 3(4)
If a provision of this Act conflicts with a provision of another Act, other than the Human Rights Code, the provision of this Act applies.

Like Charter (particularly s.15 anti-discrimination) law, human rights law can be complex and parties are well-advised to consult a lawyer, or at least engage in an extensive study of that law themselves well before the need to use it arises.

Where raised by the initiating party, the human rights issue should first be raised in the application. Where this is not possible then it may be necessary to formally amend the application [see Ch.13, s.4(g): "General Board Procedures: General Application Procedures: Amendment of Applications"]. Where the human rights issue will be raised by the respondent, they should provide written notice of that intention to both the other parties and the Board as soon as this intention is known.

Human rights issues are the subject of Interpretation Guideline 17: Human Rights.

. Residential Tenancies Act, 2006

The Residential Tenancies Act ("RTA") and the Regulations made under it are of course the main "workhorse" pieces of legislation that apply to Ontario residential L&T situations, and they are the main subject of this Isthatlegal.ca Legal Guide. Generally - the RTA prevails over other laws (the main exceptions being the Charter and Human Rights Code [RTA s.3(4), quoted above]):

RTA s.3(1)
This Act applies with respect to rental units in residential complexes, despite any other Act and despite any agreement or waiver to the contrary.

Determinations of whether the RTA applies to any given fact situation are available either in the course of normal proceedings before the Board, or on special application to the Board:

Form A1: Application About Whether the Act Applies
The general purpose of the RTA is stated as:

RTA s.1
The purposes of this Act are to provide protection for residential tenants from unlawful rent increases and unlawful evictions, to establish a framework for the regulation of residential rents, to balance the rights and responsibilities of residential landlords and tenants and to provide for the adjudication of disputes and for other processes to informally resolve disputes.

The RTA regime is under the general administration of the Ministry of Municipal Affairs and Housing" [Act s.2(1)] and - for adjudicative purposes - its arm's length administrative Tribunal, the "Landlord and Tenant Board". The role and procedures of the Board are discussed at greater length in Ch.13: "General Board Procedures".

Some complete and partial exemptions to the application of the RTA are discussed in Ch.2: "Special and Exempt Premises", but the RTA covers most residential rental situations.

Specific 'regulation-making' powers are set out in RTA s.241, linked below. This provision provides the legal authority for the Regulations which support the RTA, and which are referred to throughout this Legal Guide. This linked 'regulation-authority' is seldom referenced in day-to-day L&T practice, as it usually only comes up when considering whether a regulation that has been made is "ultra vires" (beyond the jurisdiction of) the Cabinet (the executive committee of the party in power that makes regulations), and thus possibly subject to legal challenge.

RTA s.241: Regulation-Making Authority
. Contract Law and Common Law

There has been a trend in the courts for years to relocate commercial L&T law within the more expansive realm of contract law, which itself is almost entirely grounded in the common law. For example, in Highway Properties v Kelly, Douglas & Co. [1971] SCR 562 a common law contractual measure of damages was introduced to allow landlords to sue for the full balance of a defaulted lease. Comments of the Supreme Court in that case opened the way generally for the introduction of the common law of contract into L&T law.

This makes sense. "Contract law" in its most basic form is simply the law governing private bargains between two or more parties (ie. people, corporations, partnerships, governments, etc), and there is no pressing reason to continue isolating tenancy situations from those larger principles just because the 'deal' is about possession of real estate.

That said, both of these sources of law are overridden by the RTA in the event of conflict:

RTA s.4
Subject to subsection 12.1(11) [standard RTA lease provisions] and section 194 [mediated settlement exception], a provision in a tenancy agreement that is inconsistent with this Act or the regulations is void.

Case Note: White v Upper Thames River Conservation Authority (Ont CA, 2022)

. Frustrated Contracts Act

There is an infrequently-invoked doctrine of contract law called "frustration". It holds that when the subject-matter of a contract is destroyed then the contract itself thereby ends. The classic case of this in the L&T context would be where the building housing the rental unit burns down (historically some leases have held that a tenant's duties to pay rent contine ). The Frustrated Contract Act, which essentially acknowledges and codifies some procedures regarding the operation of this rule, is expressly adopted into residential L&T law:

RTA s.19
The doctrine of frustration of contract and the Frustrated Contracts Act apply with respect to tenancy agreements.

. Statutory Powers Procedures Act

The Statutory Powers Procedures Act (SPPA) is a generic administrative tribunal procedural statute that applies to most Board and Tribunal bodies in Ontario. It addresses numerous issues such as evidence, hearing procedure, notice and service requirements and more. Whenever a body (such as the Landlord and Tenant Board) is required to hold a hearing for the exercise of a "statutory power of decision", SPPA procedures apply unless expressly excluded by the other legislation (typically by the parent legislation of the tribunal in question) [SPPA s.32].

With a few exceptions, noted throughout this program when they occur, the Board is governed by SPPA procedures, and it is those procedures primarily that are explained in Ch.13: "General Board Procedures".

The Statutory Powers Procedures Act is the subject of its own Isthatlegal.ca Legal Guide:

Administrative Law (Ontario)(SPPA)
. Condominium Act

For the most part, when tenants rent condominiums they and the owner are are subject to normal RTA rules [Condominium Act, 4(2)], including those respecting termination and eviction [Condominium Act, s.4(3)].

However in some situations they can be subject to special rules. One of these is where a purchaser/tenant has interim possession of the condominium pending the completion of their purchase [see Ch.2, s.10: "Special and Exempt Premises: Interim Possession of Proposed Condominium by Purchaser Pending Title Transfer"].

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