Monday, 10 December 2018

Ontario's Non-Profit Housing Co-ops: A great place to live!?

Residential Co-op Housing–How good is it?

From time to time I get questions about Non-Profit Housing Co-operatives and usually the questions turn on how the Co-op is governed.  Sometimes the question comes from people thinking of moving to a Co-op and other times it is from people who are having a difficult time in the Co-op with either the Co-op taking action against them or the Co-op not doing anything to address complaints.


As this is a Residential Landlord and Tenant Blog you would think that Ontario’s Residential Tenancies Act would play a large role in the operations of an Ontario Non-Profit Housing Co-operative.  That, however, is entirely wrong headed and not the case at all.  The applicability of the Residential Tenancies Act is very limited in scope.

Ontario Non-Profit Housing Co-operatives are actually governed by the Co-operative Corporations Act.   For the most part, you are going to be interested in section 171 of the Co-operative Corporations Act through to section 171.25, however, the rest of the Act is relevant with respect to other functions of the Co-op—for example Directors and Officers in s. 85 to 110.

The Co-operative Corporations Act envisions the establishment of a self-governing community.   The structure of the community (in the housing context) is that the people living in the Co-op become “members”.  As a member of the Co-op there are certain rights and responsibilities and by agreeing to be a member you agree to be bound to the Co-op rules and by-laws.   In a non-profit housing co-operative being a member gets you the right to occupy a rental unit (a “member’s unit).  Note that it is possible that you could not be a member and that you may be allowed to rent a non-member’s unit–though this is rare.

 Getting into a Co-op usually involves an application process, various forms, and interviews with membership committees.  The decision of the membership committee is often referred to the Board of Directors for a final approval.  There are a great number of committees in the Co-op, from membership, maintenance, social, landscaping, security, etc. etc..   There is no limit on the number of committees that a Co-op might have.  Quite normally, members of a Co-op are required to participate in the work and life of the Co-op as a condition of their membership.  Failing to participate (i.e. showing up for meetings, working on committees) can be grounds to terminate membership and occupancy rights (i.e. eviction).

The committees are formed from members in the Co-op and most often are simply made up of volunteers.  The very important committees, the ones dealing with money, membership, subsidies, tend to be governed by very strict Rules and Policies.  Other committees can be less formal.

WHAT ARE THE RULES?

To a great extent the rules governing life in the Co-op are dictated by the Members who decide through majority vote on what the Rules are.   The Rules are reflected in By-laws and Resolutions that are passed at meetings of the Co-operative.  In most Co-ops the members elect a Board of Directors (again mainly from the members of the Co-op).  The Board of directors then appoints from their number various officers (President, Treasurer, Secretary, etc.).  The Board of Directors then typically hires a property management company as its employee to manage the day to day affairs of the Co-op.  The property management company may have other employees and may also rely on some volunteers from the Co-op to work in the office.  The Board of Director positions are unpaid while the Property Manager is a paid position.

The scope of the rules and by-laws can and usually are very broad.  The main by-law that typically interests members the most is the “Occupancy By-law”.  This by-law, in most co-op’s controls the behaviour among members, sets out expectations, and controls the relationships between the members and the Co-op.  You can find any unique membership requirements in this By-law and it is the one by-law that members should read at least once and preferably before or when joining a Co-op.

THE MEMBERS DON”T LIKE ME—now what?

Living in a Co-op can be a stressful adventure.  There can be cliques and it is possible for “groups” to form.  You sometimes hear the comment that it is a “little like high-school”.  That may or may not be the case but it is important to realize that in a Co-op your reputation and interaction with your co-members is indeed important.  While you do not need to get along with absolutely everyone, you need to realize that it is your co-members who are often sitting in judgment of you and determining whether complaints about you or deciding what steps a Co-op should take against you for your actions.

Complaints from Co-op members, about another member, typically first go to the Property Manager.  The Property Manager—if it is a good manager—will know most of the Co-op members and hence will already have a sense about the merit of the complaint(s).  Typically, the manager will try to find a solution and will try to bring some peace to the issue that is being raised.  Often times this will be successful and the issue dies there.  However, where the issue is not solved and the problem needs to be escalated it is the Board of Directors that now receives the complaint.  The Board may give the manager instructions or alternatively the Board may ask the manager to invite the complained about member, or the complainant, to a meeting of the Board.  That invitation follows a strict set of rules and specific information needs to be disclosed to the member.

A meeting with the Board can led to a wide variety of outcomes.  The Board could cause  membership and occupancy rights to be terminated or it could enter into some kind of performance agreement or it could simply decide to take no further action.  In any event, it is at the meeting with the Board that a member’s reputation will precede them and serious decisions affecting continued housing can be made. 

If the Board of Directors decides that complaints against a member are well founded, and that there is no hope for working it out, they could decide to send the member a letter terminating membership and occupancy rights as of a certain date.  Once that is done, the Co-op will then likely serve a Notice of Termination under the provisions of the Residential Tenancies Act. specifically Part V.1 which deals with Housing Co-operatives.

In the not too long ago past, members who were having their membership and occupancy rights terminated were entitled to appeal to the membership of the Co-op at a meeting.  These meetings, from a purely academic perspective, were wonderfully wild and crazy exhibitions of direct democracy in action.   Other than that, the meetings were (in my opinion) brutal.  The appeal meetings required members to speak in public, argue why they should not be evicted and confront their neighbours and whoever it is who was complaining.  While one would hope that the members listening to the appeal would act like Judges–that was rarely the case.  Popularity certainly mattered.

For the most part, the appeals to the membership in most Co-ops in Ontario have now been removed from the By-laws.  The appeal to the Membership has been replaced by the Landlord and Tenant Board process and the Notices of Termination that must be served by the Co-op to terminate membership and occupancy rights.

The Landlord and Tenant Board process can be considered a replacement for the Appeal to the Membership because the Residential Tenancies Act–for some kind of complaints and allegations, makes the decision to terminate membership and occupancy rights voidable.  This means that the actual Notices of Termination (for Co-op’s), will reverse the decision of the Board of Directors if certain conditions are met that are set out in the Forms.

There are certain Notices, that once served are not voidable.  For example, for committing illegal acts or impairing safety.  If such a Notice of Termination is served there is no automatic voiding of that notice by changing behaviour.  Hence, an instance of criminality or seriously impairing the safety of another person is indeed grounds to terminate membership and occupancy rights.

There is still, however, another chance for members who have been served a Notice of Termination.  The final steps at the Landlord and Tenant Board include a mediation/case management hearing and ultimately a hearing before an adjudicator.  At the ultimate hearing the adjudicator retains a residual discretion to NOT terminate membership and occupancy rights if the adjudicator is satisfied that Justice would be best served by not terminating those rights.  The adjudicator can make a probation like Order (a conditional Order), preserving membership and occupancy rights so long as the member does or does not do certain things.  If the member complies, the decision of the Board of Directors to terminate the member is effectively over-ruled by the Landlord and Tenant Board.


ACTION AGAINST A CO-OP

Some of you will be familiar with the rights that tenant’s have at the Landlord and Tenant Board to bring tenant applications against landlords for maintenance issues or harassment, obstruction, threatening or even interfering with a tenant’s quiet enjoyment of the rental property.  Forget everything that you know about that process in relation to Co-ops.  Co-op members have no recourse to the Landlord and Tenant Board. 

Co-op members must effectively work through the governance structure of the Co-op to get things done.  If getting action is too difficult or impossible then a Co-op member, properly motivated and with a good amount of money at their disposal, could apply to Court in certain instances to force compliance with the member’s request.

PART II on Co-op’s will be upcoming, so look for it.  I will right about Co-op meetings and the election process.  It is truly something to behold!



Michael K. E. Thiele
www.ottawalawyers.com

Search This Blog

Follow by Email

About Michael Thiele

My photo

Ottawa lawyer and partner at Quinn Thiele Mineault Grodzki LLP.  Graduate of Queen's University in Kingston, Ontario.  Called to the bar in Ontario in 1997.  Undergraduate degree at Colby College, Waterville Maine, U.S.A.