- Joined
- Mar 11, 2008
- Messages
- 253
Hot Button Issues for Residential TenanciesReal estate lawyers involved in transactions of residential rental properties provide added value to their clients by flagging regulatory risks faced by landlords. Clients investing in rental property for the first time are often naïve about the comprehensive regulatory schemes constraining all aspects of their rental operations and when business plans go awry, they inevitably blame their lawyer. Lawyers who provide risk management awareness will add to their clients’ success and avoid having the “hot buttons” described below pushed.
Residential Tenancies Act
The Ontario Residential Tenancies Act (RTA) imposes a web of restrictive legal obligations on landlords and trumps all inconsistent contractual terms between landlords and tenants. It imposes strict rent controls and rigorous adjudication of all landlord and tenant disputes, including evictions.
Lawyers who advise purchasers of rental property should provide clients with a full package of information regarding the RTA, the Landlord and Tenant Board (LTB) and its rules and guidelines. They should stress to the client that the RTA is consumer protection legislation designed to favour tenants; consequently, it is difficult to evict problem tenants.
Municipal licensing
Municipalities with large post-secondary student populations are adopting municipal licensing regimes to discourage student rentals in proximity to education institutions. A typical municipal strategy is to pass restrictive zoning by-laws limiting the number of rental units or the number of bedrooms within rental structures. A licensing by-law is then passed requiring the owner to register the rental units and provide information about the property.
Upon receipt of the information, the municipality refuses to issue a license and demands rental operations cease unless the owner meets the burden of proving compliance with the restrictive zoning by-laws and submits to a multitude of municipal fire, building and property standards inspections and re-inspections. Purchasers need to be aware of the local municipal licensing regime. Clients will be appreciative if you help them avoid a purchase where the vendor is trying to unload their licensing problems onto a naïve buyer.
Fire code issues
The Fire Marshal’s Office (FMO) may take an aggressive stand relative to student rental occupancies by declaring their rental premises a “lodging house” and demanding compliance with lodging house standards in the fire code. In reality, the occupants are roommates jointly sharing rental accommodation just like any family or friends would, but if lodging house provisions apply there are usually requirements for substantial and costly retrofits. The costs destroy the business operation and occupancy is often prohibited until the work is done.
Lawyers advising owners of student rentals should recommend that a single, joint-use lease be signed with all tenants. Our firm has successfully challenged an inspection order on these grounds, but the decision is now under appeal by the city to the Fire Safety Commission.
The FMO is also using audibility guidelines to impose retrofit obligations on landlords whose buildings comply with applicable building and fire code legislation. Inspectors issue inspection orders requiring that audibility levels meet the FMO guideline, and failure to comply triggers provincial offence charges against the owner. Ontario landlords have spent millions of dollars retrofitting their buildings, even though the guideline is not retrofit legislation. Our firm has a challenge of this issue pending in the Ontario Divisional Court, and until the court reaches a final determination, landlords have successfully stayed issuance or enforcement of such inspection orders.Building code violations
Another municipal strategy to discourage student housing is to have the local building inspector declare that lodging house provisions of the building code apply, thus prohibiting occupancy until a building permit is issued and retrofit is complete. Building permits are then refused by the municipality, making it impossible to continue the use. Our firm recently successfully appealed this issue to the Ontario Superior Court, where the judge confirmed that joint lease occupancies by unrelated persons do not invoke the lodging house designation, and the building code order was rescinded (see 2161907 Ontario Inc. v. St. Catharines (City), [2010] O.J. No. 3820.
Human Rights Code
The Human Rights Commission has recently produced formal guidelines addressing the obligation on landlords not to discriminate in accommodation. The guidelines establish complex protocols for landlords faced with human rights issues such as:
-prohibitions on the use of income criteria to assess prospective tenants;
-restrictions on the right to evict problem tenants who have a disability; and
-the requirement to ensure that the rental structure is accessible to persons with disabilities.
Lawyers should inform clients of their human rights obligations to tenants under the Code so that they can avoid costly human rights complaints.
Lawyers who promote awareness of these issues confronting landlords of residential rental properties will increase the prospects of their clients’ success — as well as future referrals — whereas those who just focus on closing the deal invite liability from unhappy clients.
SOURCE: Joe Hoffer is a partner with the London law firm of Cohen Highley LLP. He has practised administrative and residential tenancies law for the past 22 years and represents landlords exclusively on all legal issues involving multi-residential properties.
Residential Tenancies Act
The Ontario Residential Tenancies Act (RTA) imposes a web of restrictive legal obligations on landlords and trumps all inconsistent contractual terms between landlords and tenants. It imposes strict rent controls and rigorous adjudication of all landlord and tenant disputes, including evictions.
Lawyers who advise purchasers of rental property should provide clients with a full package of information regarding the RTA, the Landlord and Tenant Board (LTB) and its rules and guidelines. They should stress to the client that the RTA is consumer protection legislation designed to favour tenants; consequently, it is difficult to evict problem tenants.
Municipal licensing
Municipalities with large post-secondary student populations are adopting municipal licensing regimes to discourage student rentals in proximity to education institutions. A typical municipal strategy is to pass restrictive zoning by-laws limiting the number of rental units or the number of bedrooms within rental structures. A licensing by-law is then passed requiring the owner to register the rental units and provide information about the property.
Upon receipt of the information, the municipality refuses to issue a license and demands rental operations cease unless the owner meets the burden of proving compliance with the restrictive zoning by-laws and submits to a multitude of municipal fire, building and property standards inspections and re-inspections. Purchasers need to be aware of the local municipal licensing regime. Clients will be appreciative if you help them avoid a purchase where the vendor is trying to unload their licensing problems onto a naïve buyer.
Fire code issues
The Fire Marshal’s Office (FMO) may take an aggressive stand relative to student rental occupancies by declaring their rental premises a “lodging house” and demanding compliance with lodging house standards in the fire code. In reality, the occupants are roommates jointly sharing rental accommodation just like any family or friends would, but if lodging house provisions apply there are usually requirements for substantial and costly retrofits. The costs destroy the business operation and occupancy is often prohibited until the work is done.
Lawyers advising owners of student rentals should recommend that a single, joint-use lease be signed with all tenants. Our firm has successfully challenged an inspection order on these grounds, but the decision is now under appeal by the city to the Fire Safety Commission.
The FMO is also using audibility guidelines to impose retrofit obligations on landlords whose buildings comply with applicable building and fire code legislation. Inspectors issue inspection orders requiring that audibility levels meet the FMO guideline, and failure to comply triggers provincial offence charges against the owner. Ontario landlords have spent millions of dollars retrofitting their buildings, even though the guideline is not retrofit legislation. Our firm has a challenge of this issue pending in the Ontario Divisional Court, and until the court reaches a final determination, landlords have successfully stayed issuance or enforcement of such inspection orders.Building code violations
Another municipal strategy to discourage student housing is to have the local building inspector declare that lodging house provisions of the building code apply, thus prohibiting occupancy until a building permit is issued and retrofit is complete. Building permits are then refused by the municipality, making it impossible to continue the use. Our firm recently successfully appealed this issue to the Ontario Superior Court, where the judge confirmed that joint lease occupancies by unrelated persons do not invoke the lodging house designation, and the building code order was rescinded (see 2161907 Ontario Inc. v. St. Catharines (City), [2010] O.J. No. 3820.
Human Rights Code
The Human Rights Commission has recently produced formal guidelines addressing the obligation on landlords not to discriminate in accommodation. The guidelines establish complex protocols for landlords faced with human rights issues such as:
-prohibitions on the use of income criteria to assess prospective tenants;
-restrictions on the right to evict problem tenants who have a disability; and
-the requirement to ensure that the rental structure is accessible to persons with disabilities.
Lawyers should inform clients of their human rights obligations to tenants under the Code so that they can avoid costly human rights complaints.
Lawyers who promote awareness of these issues confronting landlords of residential rental properties will increase the prospects of their clients’ success — as well as future referrals — whereas those who just focus on closing the deal invite liability from unhappy clients.
SOURCE: Joe Hoffer is a partner with the London law firm of Cohen Highley LLP. He has practised administrative and residential tenancies law for the past 22 years and represents landlords exclusively on all legal issues involving multi-residential properties.
