Tuesday, 30 October 2012

Rent deemed lawful

I had a call today about the legality of rent being charged to a tenant.  It was the landlord calling and asking whether she had anything to be concerned about in relation to the rent she was charging for an apartment.  Apparently, this landlord had a fairly good relationship with her tenant and a few times over the past several years she raised the rent by agreement with the tenant.  It was informal, there was no notice of rent increase, but the tenant was happy to pay the increase amount.  On questioning, it seems clear that the increase amount exceeded the allowable annual guideline amount as published by the Ministry of Housing.  Notwithstanding the tenant's agreement to increased the rent at the time, the relationship with the tenant has recently soured and now the tenant is saying that she is owed money for the illegal rent increases that were charged to her.  It isn't clear if the tenant knew all along that the method of the rent increases was irregular or if she has just learned of the process through the Ontario Landlord and Tenant Board.  Either way, it doesn't much matter as the landlord quite likely has a problem.

For people who like to read the Residential Tenancies Act, they will have come across section 136 of the Residential Tenancies Act.   That section provides that: Rent charged one or more years earlier shall be deemed to be lawful rent unless an application has been made within one year after the date that amount was first charged and the lawfulness of the rent charged is in issue in the application. 2006, c. 17, s. 136 (1)

The plain reading of this section suggests that rent increases, taken more than one year ago, that have not been challenged by the tenant in legal proceedings are deemed to be lawful.  Presumably, this section should offer some protection to the landlord who called me today.  Unfortunately, this is not the case as the Ontario Court of Appeal in Price v. Turnbull's Grove explained that this section does not mean what it at first blush appears to say.  In essence, the Court of Appeal explains that where the process of increasing the rent has not been followed (i.e. serving a notice of rent increase), that the rent so charged is not in fact deemed lawful with the passage of time.  This means that landlords who impose rent increases, notwithstanding any agreement of a tenant, are exposing themselves to claims for refunds potentially years after the charges were made.  It is an interesting question, based on this case law, whether a landlord can cure a past mis-step by following the rent increase process in subsequent years while using the "illegal rent" as the base for the lawful annual guideline rent increase amount. 

Ultimately, this case reinforces the fact that the rent increase process is highly technical and needs to be carefully followed to avoid nasty claims for rent refunds from tenants many years after the fact.  

Quinn Thiele Mineault Grodzki LLP
Michael K. E. Thiele
310 O'Connor Street, Ottawa, Ontario
Tel: 613.563.1131 

Monday, 29 October 2012

Property Standards Appeal Committee: City of Ottawa

OTTAWA: For residential landlords the arrival of a property standards officer can sometimes spell trouble.  Sometimes, a disgruntled tenant will call the City looking for an inspection to cause problems for a landlord.  The tenant, often, will meet the property standards officer at the door and take them through the entire property pointing out every conceivable problem.  The result, not infrequently, is that the landlord receives an Order made pursuant to the Property Standards By-Law.

The point of this blog is to describe what the appeal process is like.  As you will see from an Order issued by the Property Standards Officer it will contain an issued date as well as a correction date.  The correction date is the date by which the Property Owner, or the person to whom the Order is directed, is expected to have complied with the Order.  The Order also advises the recipient of the right to appeal the Order to the Property Standards Appeal Committee, normally within 30 days of the date of the Order.  There is a fee of $150 to appeal.  Once the Appeal request is received the Hearing will be scheduled within 30 days.

What do the Appeal forms look like?  As of the date of this blog, there are no formal appeal documents and no written nor formal Rules of Procedure before this committee.  A call to the coordinator reveals that a simple letter, addressed to the Secretary of the Committee, which sets out the intention to appeal the Order is sufficient.  In my experience it is best to draft a "form like" Notice of Appeal that cites the name of the property owner, the municipal address, the date of the Order, the Correction Date, and the name of the Property Standards Officer.  Then in sequentially numbered paragraphs, provide some background on the property, background on the issue, background on how the Order came to be, the attempts to comply with the Order or the attempts to negotiate a resolution with the Property Standards Officer, then the grounds for the appeal, and a final section stating what the desired outcome of the appeal is along with a reference to the evidence to be relied upon at the hearing.

It is helpful to prepare a small book of documents, with sequentially numbered pages, tabbed if necessary, that includes all of the relevant documents (i.e. all of the documents that tell the story of what has happened and show what you want to happen).  You should make at least 5 copies of this book and if time allows, file one with the secretary in advance of the hearing (though it will be accepted at hearing).

The hearing is before a committee of three Board Members.  The hearings are held in regular meeting rooms, usually at the City Building on Centrepointe Drive, Ottawa.  The process is informal although there is a record as the proceedings are recorded.  I'm not sure if it is possible to obtain a copy of the record.  It should be easy enough to get as the recording is in a digital format with a simple recorder being placed on a desk in the meeting room.

Of the Board Members, one acts as Chair and runs the hearing.  Witnesses are sworn on oath.  The Property Standards Officer is present to provide clarification and information.  Interestingly, the Property Standards Officer begins to act as a bit of an advocate for the Order and it can't be said that the "Order" speaks for itself.  The traditional adversarial process is not followed and there is indeed some back and forth.  In the Appeals I've witnessed it is not unusual for the appellant and the Property Standards Officer to engage in debate while the Board/Committee kind of watches and occasionally interjects.  It is a like a mini-cross examination.  From what it appeared to me, so long as the dialogue was respectful and fruitful, the process was quite flexible.

For anyone attending such an appeal, I can say I was taken a bit by surprise as the Property Standards Officer may indeed enter new evidence (pictures, maps, charts, whatever), without notice or advance disclosure.  To avoid such surprise I recommend that you contact the Property Standards Officer in advance of the hearing and request a copy of any evidence he/she intends to lead at the Appeal and at the same time make a similar request to the secretary of the Board.

The decision on the Appeal seems to come quickly and the panel deliberates before making an oral decision.  Perhaps in more complicated matters they would not make an oral decision but for the most part the panel seems quite efficient in its decision making.  A written decision follows in the mail following the appeal.

Michael K. E. Thiele
Quinn Thiele Mineault Grodzki LLP
310 O'Connor Street, Ottawa, ON K2P 1V8
Tel: 613.563.1131

I don't want to shovel the snow!

A question that I get from time to time, especially when winter weather is approaching, is whether a landlord can require a tenant to shovel the snow on the property from walkways and driveways.  Sometimes the question comes up only because the tenant doesn't have the funds to buy a proper snow-shovel and hence is trying to figure out how to make someone else responsible for shovelling or perhaps providing a shovel.

Traditionally, the question of who is responsible for snow shovelling was determined by the nature of the property.  If the property was a single unit like a house or townhouse where only one tenant was making use of the walkways and driveways the arrangement was normally for the tenant to be responsible for snow clearing.  If the property was occupied by several tenants then the landlord would make arrangements with someone to provide snow clearing services.

The law that governs the relationship between residential landlords and tenants is the Residential Tenancies Act.  What does it say about "snow shovelling" and "snow clearing".  In a word, nothing.  Where the Residential Tenancies Act is silent on an issue/topic the common view is that the parties are then free to contract with respect to the issue.  Accordingly, some leases contain clauses respecting snow clearing and shovelling and thereby set out the responsibility therefore.  Where leases are silent, the obligation with respect to snow shovelling and clearing has become an implied term of the lease by the assumption of responsibility by either the landlord or tenant.  For many, this informal arrangement seems to have worked.

The informal arrangements, and in fact the legality of the formal arrangements set out in leases were recently clarified by the Ontario Court of Appeal in a case called Montgomery v. Van.  That case discusses the issue of snow removal and determines that keeping a property clear of snow and ice is in fact a maintenance obligation that falls squarely into the category of a landlord's obligation.  Consequently, this means that a landlord can not evade this responsibility by shifting the snow clearing obligation to a tenant in a lease.  If a tenant does not want to shovel snow the tenant does not have to.

To be clear, the Court of Appeal did not say that a landlord may never make a deal with a tenant for the tenant to provide snow clearing services.  In fact, so long as the snow clearing arrangement is pursuant to a separate contract, outside of the scope of the tenancy agreement, it would appear that a tenant could be made responsible for snow clearing in exchange for some kind of compensation.  At the same time, a tenant's decision to terminate a snow clearing agreement with the landlord can not be a basis for termination of the tenancy.

So, for any landlord counting on the tenant to provide free snow clearing services, you may need to think again about the arrangements and perhaps even the amount of rent to be charged if such a service needs to be hired for a building.

Michael K. E. Thiele
Quinn Thiele Mineault Grodzki LLP
310 O'Connor Street
Ottawa, ON K2P 1V8
Tel: 613.563.1131

Tuesday, 23 October 2012

Do you have a question?


If you have a particular question, are not in a tremendous rush, and the question is likely to be of general interest to landlords or tenants (in Ontario), feel free to send me an email or post a comment.  I'd be pleased to consider the question and write a little something about it.  Note that these blogs are for information purposes only and do not constitute legal advice.  For legal advice you should actually retain a lawyer to provide advice based on your specific facts.  Lastly, as this is a general information blog, please do not provide identifying details, street addresses etc..

Michael K. E. Thiele
Quinn Thiele Mineault Grodzki LLP
310 O'Connor Street, Ottawa, ON K2P 1V8
Tel: 613-563-1131

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THE NOISY TENANT--how to evict!

What can a landlord do to a tenant that is making too much noise and is disturbing other tenants?  Many landlords will try to speak with the tenant who is being accused of being noisy and ask them to keep it down.  Sometimes this works.  Other times, no matter how much effort a landlord puts into trying to get the noisy tenant to be reasonable, they simply will not change their ways.

The noisy tenant can be a real problem to a landlord.  Other tenants will begin to complain to the landlord and they will start to demand action.  If nothing happens, some of these tenants will file an application against the landlord for an abatement of rent (return of rent money), and some will look to terminate their tenancies and move out.  The risk to the landlord is that one noisy tenant can drive out good quality tenants.  The result of which is vacant units, decreased rental income, and higher expenses in preparing a unit for a new tenant (from painting, to advertising to commissions!).

The legal way to deal with a noisy tenant is to serve that tenant with a Form N5 as provided by the Ontario Landlord and Tenant Board.  The Form N5 is a Notice of Termination of tenancy.  In the situation of a noisy tenant, the appropriate boxes on the form are ticked off on the basis of the tenant substantially interfering with the reasonable enjoyment of the premises by other tenants, the landlord, or the landlord's employees.

Note that the Form N5 requires certain dates to entered as well as details of the allegations.  Note that the law behind these requirements is highly technical and complicated.  It is worth reviewing the Residential Tenancies Act as well as the notes on the Form itself and the guide and brochures available on the Landlord and Tenant Board website. Failure to strictly comply with the legal requirements will likely result in the Form N5 being declared void by the adjudicator and hence you will have to start all over again.

When serving a first N5, the termination date must be at least 20 days from the date of service.  Presuming you hand the N5 to the tenant, or place it in their mailbox, the termination date in the notice must be at least 20 days after the date of service.  No matter how absurd it might seem, if you fail to provide the proper number of days, the Landlord and Tenant Board will dismiss your case and you will have to start all over again.

Another highly technical part of the Notice is the section in which you have to write the details of what is happening.  The details section is the Who, What, Where, Why, When, section.  The Divisional Court has made it mandatory that this section provide sufficient detail for the tenant to know exactly what they are accused of.  In most cases this will require the provision of dates and times of the alleged incidents.  Failure to provide sufficient detail is also a reason for your N5 to be declared void.

After service of an N5, the tenant has 7 days to correct the behaviour--or cease the behaviour complained of.  If the tenant stops the offending behaviour and nothing happens in the seven days following the service of the N5, this Notice of Termination becomes void and the tenant gets to stay in the apartment.

However, if the tenant does not stop the behaviour in the seven days following the service of the N5 the landlord may then file an application to the Landlord and Tenant Board in form L2.   The filing of this form will lead to the issuance of a Notice of Hearing and the scheduling of a hearing date.  After serving the tenant with this Notice of Hearing and the application, the landlord has to get ready to prove the case, against the tenant, on a balance of probabilities.

Proving a case is not easy.  If the complaints are about music, banging, or anything similar, the landlord has to bring witnesses to the hearing who are able to testify about the event state what happened.  These witnesses will also have to explain how the noise impacted them (i.e. couldn't sleep, couldn't hear my television, couldn't have friends over etc.).  It is not enough to bring written complaint letters or even an affidavit.

If the landlord is able to prove the allegations in the N5 the adjudicator hearing the case will determine whether eviction is warranted under the circumstances.  The adjudicator will consider whether the noise complained of is a substantial interference (as opposed to a regular noise) and whether termination of the tenancy and eviction is necessary under the circumstances.  Also, the adjudicator may be persuaded by a tenant to exercise his discretion to maintain the tenancy on terms (i.e. order the tenant to be good and not bother other tenants for a fixed period of time).

Where the case is proven and the adjudicator decides that it would be unfair to deny the eviction, the Landlord and Tenant Board will issue an Order terminating the tenancy and eviction the tenant.  The Board will provide a new termination date and the tenant will be required to move out of the apartment by that date.  If the tenant refuses to move, the landlord will have no choice but to file the eviction Order with the Sheriff at the Court Enforcement Office in the local Courthouse.  The Sheriff will give the tenant a few more days to move out and then will attend to remove the tenant and turn possession of the apartment over to the landlord.

The foregoing describes the N5 process, for a noisy tenant, where the first N5 was not voided.  What about those situation where the N5 was voided by compliance within the 7 days following service of the Notice of Termination?  I will write about that another day if there is a comment requesting that information.  In short, if the first N5 has been voided, and it is within six months of the first N5, then the landlord will serve a second N5 (to other Notice of Termination).  This second notice is not voidable, has shorter notice periods, and allows the landlord to apply to the Board immediately.  At that hearing the burden of proof remains on the landlord and the landlord will have to prove the allegations in both the first and second N5 in order to win a termination of the tenancy.

For more information consider contacting a lawyer who practices in the area of residential tenancies law.  While the Landlord and Tenant Board website gives the impression that the process is user friendly and that all you have to do is show up and tell your story--the reality is that residential tenancies law is highly technical and not for the novice landlord to dabble in.  Landlord and Tenant Board hearings are adversarial processes that require the landlord to prove that the tenant be evicted from his home.  Given the seriousness of what is being requested you may appreciate that such orders are not easily obtained.

Michael K. E. Thiele
Quinn Thiele Mineault Grodzki LLP
310 O'Connor Street, Ottawa, Ontario K2P 1V8
Tel: 613-563-1131

Non-Payment of Rent

The purpose of this blog is to help both landlord and tenants with the procedural issues surrounding the application of the Residential Tenancies Act (RTA).  The RTA is the law that governs the relationship between residential landlords and tenants (since 2006 to the present date of 2012).  The prior legislation was the Tenant Protection Act and before then the Landlord and Tenant Act.  Any residential lease making reference to the old laws will always be deemed to be the current and actual law which is the Residential Tenancies Act.

Where should a landlord or a tenant start if the issue being dealt with is non-payment of rent?  The first place to look is the law itself.  You may find it at RTA .  Both landlords and tenants should inform themselves of the specifics of the laws as no landlord may take any steps to recover possession of a rental unit without following the technical requirements of the law.  The law respecting non-payment of rent is significantly more complicated than you might think.  It is for this very same reason that a tenant should inform himself/herself of the law as they have many more rights that you might imagine.

What does not work?---you can't tell a tenant to get out and expect them to leave, you can not just send an email or a letter or a note and think that this is lawful.  A handshake has no legal force or effect.  A written "contract" or a written "deal" is unenforceable--void, of no force and effect if that deal (no matter how reasonable it seems) violates the provisions of the RTA.  In short, the law takes away your right--as mature and consenting adults to negotiate the terms of an agreement--no matter how reasonable that deal might seem.

The next most useful place to look is the website of the Ontario Landlord and Tenant Board This website provides the necessary forms that a landlord absolutely must use and it provides brochures and guides on what to do.

I regularly teach landlord and tenant law at a local College here in Ottawa.  It is always surprising to me that the process to deal with non-payment of rent is so poorly understood.  A summary of that process is as follows:

1. Fill out a form N4--which is a Notice of Termination for Non-Payment of Rent.  This is not a choice or a recommendation.  It is mandatory if you are seeking termination of a tenancy for non payment of rent and the payment of that rent.

2. The form N4 will give the tenant 14 days to pay the rent.  If they do, the notice is void and they get to stay in the unit.  While you are waiting for the 14 days (yes two weeks) to pass, you can do nothing except wait.  This delay is a very good reason to serve an N4 immediately after the rent is due--no breaks, no delays as any grace period delays the counting of the 14 days of notice required to be provided in the N4.

3. If the rent is not paid within the 14 day period, then on the 15th day you may fill in a form L1 (Landlord's Application number 1).  File it with the Board, with a copy of the N4 that you served on the tenant along with a Certificate of Service, proving that you served the N4 on the Tenant.

4.  Once you file the L1 with the Landlord and Tenant Board you will receive a Notice of Hearing and an issued copy of the application.  You will need to serve this on the tenant (in the New Year (2013), the Landlord and Tenant Board will start serving the document for you by mail).  You will likely be waiting a week or two for the hearing date to arrive.

5.  On the date of the Hearing, you will need to attend to prove that the tenant has not paid rent.  Normally this is done by simply stating that the tenant has not paid the rent.  Presuming that the tenant does not dispute that the rent is owed, and absent any special considerations, the Landlord and Tenant Board may issue a standard Order, giving the tenant 11 days to pay the rent, plus the $170 application fee.  If the tenant does pay with the additional time provided, the eviction Order will become void and unenforceable.

6. If the tenant does not pay the rent, as Ordered, then on the 12th day (set out in the Order), the landlord may take the Order to the Sheriff (at the local Courthouse) for it to be enforced.  It is the Sheriff (Court Enforcement Officer) who must enforce the eviction order (there is no self help, you can't get friends or even the police to enforce the order--it has to be the sheriff).  The Sheriff will normally give the tenant another 7 days of Notice before physically attending to change the locks.

7.  Once in a tenancy, a tenant may pay the full amount of the rent arrears, even after the Sheriff has posted a Notice to Vacate on a tenant's door.  If they do, the eviction Order is void.  The Sheriff fee of approximately $330 must also be paid by the tenant at the Motion to Void hearing.  In order to void an eviction notice after the Sheriff has posted a notice to vacate a tenant must file a Motion to Void with the Landlord and Tenant Board.

As you can see, the process to terminate and evict a tenant for non-payment of rent is a lengthy process.  The RTA reflects a policy choice (Security of Tenure) to give tenants many opportunities to maintain their rental unit and home in cases involving non-payment of rent.  In fact, not discussed above, is the fact that a tenant, at a hearing before the Landlord and Tenant Board, may ask an adjudicator to exercise his/her discretion and order a payment plan or some other method that is affordable to the tenant instead of issuing an eviction Order.  The power to grant relief from eviction is under section 83 of the RTA.  Where an adjudicator exercises such discretion (and it is mandatory that they consider using the exercise of this discretion), the Board would Order that the tenancy is maintained (and the tenant not evicted), so long as the tenant meets the conditions of the Order (for example $50 per week until the arrears are paid off).

In the event that the tenant does not meet the terms of a conditional order granting them relief (i.e. the chance to maintain the tenancy), the landlord will be permitted to apply again to the Landlord and Tenant Board under section 78 of the RTA in form L4.  Of course, a tenant may bring a motion to set aside an Order obtained under section 78--which all means that the parties will be back before the adjudicator several weeks later---- again.

Left out of this short blog is the possibility of a tenant raising various defences to the Landlord's application.  Those various defences include the legal right to argue any grounds for abatement of rent (maintenance, repair, illegal entry, tenant's rights etc.) or any other argument that would impact on the right of the landlord to collect rent (i.e. the lawful rent, the validity of the Notices, etc.).  If any of these arguments are successful the landlord might find that the rent arrears are substantially reduced or even that the application is dismissed on what is often derisively called a "technicality".

If you are a landlord, or a tenant, I hope you have taken from this blog the fact that the requirements of the RTA are highly technical, that not following the technical requirements of the RTA is in fact illegal, that tenants have many rights that are not necessarily intuitive, and that getting professional legal help--whether you are the tenant or the landlord is a very good idea.

Michael Thiele
Quinn Thiele Mineault Grodzki LLP
310 O'Connor Street, Ottawa, ON K2P 1V8
Tel: 613.563.1131
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About Michael Thiele

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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.