Landlord and Tenants disagreeing about what is included in the lease!
You might think that knowing what you have rented (as a tenant) would be crystal clear from the outset of a residential lease. Surely, you saw pictures, went to look at the apartment, walked around, asked questions, pictured yourself hanging curtains, etc. etc.. Then, from the other side, the landlord might think it is equally clear about what is the rental unit because--when walking around and showing the unit--they said: "you don't get the basement" or "the garden shed is mine" or "you only have one side of the garage the other side is for my neighbour". Believe it or not, disputes about these basic facts do arise with both sides being certain that their position is correct. It gets trickier too. What if the property has a wall insert air conditioner --imagine that there is a pool, hot tub, washer/dryer, chest freezer in the garage, or frankly any other kind of device or feature that, at the time of renting was not explicitly discussed. What if those things are gone when the tenant takes possession? A tenant may make assumptions ... that do not mesh with the landlord's intentions. What then?
Readers of this blog may (and I hope you do), think that the answer to any issue like this must be presumptively solved by the wording of the lease. If memory serves, Ontario started and mandated the use of the Ontario Standard Form Residential Lease in 2018. That standard form lease is required to be used in the vast majority of market rent residential tenancies. This standard form lease did finally rid us of the old book store leases that still referred in the 21st century to coal chutes, water closets, and where the horses were to be tied up. This "standard form lease" is substantially focused on the essential elements of what matters and is of concern to both tenants and landlords. The standard form lease (created and imposed by section 12.1 of the Residential Tenancies Act), has explicit provisions about the description of the rental unit, the amount of rent, lease term, rent deposits, insurance, smoking rules, and more. It provides even a check box for condominium unit rentals, a direction to attach those rules, and then for quirky rules and requirements it gives us paragraph 15 which allows the attachment of additional terms and conditions.
Unfortunately, some landlords do seem to misuse paragraph 15 of the standard form lease as they insist on attaching--as additional terms--the entirety of their formerly used book store leases. Perhaps doing this is a resentful response to being forced to use a standard form lease (?) or perhaps it is because the standard form lease does not easily allow for the imposition of illegal clauses (i.e. pet deposits, damage deposits, repair and maintenance shifting).
In any event, given the passage of time since 2018 (start of the standard form lease), new practitioners in this area of law have become accustomed to focusing on the wording of the lease to determine what is included, excluded, and what is unaddressed. The clarity and specificity of the standard form lease invites a strong reliance on the wording of the lease and the inserted terms. Rules of contractual interpretation (a lease is a contract), including the doctrine of contra proferentum spring to mind for most Law Society licensees. This latin phrase, if it isn't ringing a bell, encapsulates the idea that where there is ambiguity in a contract/lease that allows the document to bear different interpretations, the interpretation that is to be adopted is against the interest of the drafter of the document and in favour of the other party to the contract. The idea being that the drafter who controls the pen that writes the contract/lease has the best opportunity to draft something that is "clear and unambiguous" and therefore should bear the burden of a lack of clarity.
It is in this context that the Divisional Court has recently had an opportunity to remind us that Residential Tenancies law in Ontario is its own special category of law. It is not a relationship to be assessed on usual contractual interpretation principles. In fact, it is the exact opposite and it is therefore clear from the structure of the Residential Tenancies Act that the Ontario Landlord and Tenant Board is not limited to interpreting the words on a page. We are reminded that residential leases in Ontario are potentially more nuanced and uncertain as to its terms than the section 12.1 Residential Tenancies Act leases portray.
In the case of Nissan v. Jaglal, 2025 ONSC 5713 (CanLII), decided on October 9, 2025, the Court reminds us of the PRE section 12.1 provisions of the Residential Tenancies Act--which remain in the statute at section 12. In the age of the book store leases (or no leases whatsoever), practitioners in this area of law were constantly reminded that a residential lease was by definition "oral, written, or "implied". Each of these were equally authoritative and in fact a residential lease could be a little bit of all of these all mushed together. Back when there was no section 12.1 lease (standard form), the Court, the Ontario Rental Housing Tribunal, and now the Ontario Landlord and Tenant Board were charged with figuring out what the tenancy agreement provided from all of the circumstances and not just from a single document or fact. While written leases might be useful, the scribbled signatures on a document that still referred to coal chutes, water closets and livery stables was generally not thought to reliably reflect the intentions of the signatories in the 21st century.
Back "in the day", my experience was that the greatest reflection of intention and agreement around what the lease included was based on what were the parties actually "doing". Words aside, behaviour was instructive.
So, it was with interest that I reviewed Nissan v. Jaglal today. In this case there was a dispute between landlord and tenant whether the rental unit (a house) included the basement or not as space rented by the tenant. The tenant's position was that the basement was in fact included in the rental unit description and therefore it was part of the leased space. The tenant, upset that the landlord entered the space, filed an application alleging an illegal entry into the rental unit. Such an application can of course have serious consequences for a landlord including financial penalties and exclusion from the property. In this case, the landlord's position was that the basement was not included in the space that was rented to the tenant--and hence, there was no illegal entry as the landlord entered space that was a part of the leased space.
The Landlord and Tenant Board held that the basement was not included in the rental unit space. One has to imagine that this is quite the finding given that the rental unit was a single family home. The landlord seems to have done an admirable job in showing the leasing and renting process, highlighting the offer to return all funds prior to the tenant moving in, such that the LTB was satisfied that the rental unit on offer did not include the basement of the premises.
Unfortunately, the tenant only came to the legal principle of "contra proferentum" at the appellate stage. He did not argue the principle at the merits stage and hence the LTB was denied the opportunity to consider the principle and therefore the Divisional Court was not going to consider the argument on a first impressions basis.
That being said, the Divisional Court reminds us that interpretation of a written lease agreement is not the beginning and end of interpretation and discernment of what a residential tenancy agreement includes or excludes. The Court makes explicit reference to the fact that residential tenancy agreements in Ontario (to this day), are written, oral, or implied (or an amalgam of all three)--citing to section 2(1) of the Residential Tenancies Act [at para 9]. Further, and importantly, the Court reminds us that the Ontario Landlord and Tenant Board has what might be a considered a unique adjudicative function in that it is directed pursuant to section 202 of the RTA to "ascertain the real substance of all transactions ... ". This reminder is, I think, a crucial reminder that an adjudicator is mandated to figure out what is really going on--regardless of the words on a page, the thrust of a text message, or an oral recording. The adjudicator's mandate will be to explore all the things that are relevant. This reminder should lead you to a little head-scratching when thinking about the parol evidence rule and whether that principle has any application in Ontario's landlord and tenant law and the function of the adjudicative tasks of the LTB.
One last point, and I think it is worth mentioning. This case is not an authority for a proposition that the contra proferentum rules does not apply in LTB proceedings. The Court makes this point, I think, when it limits its comments respecting contra proferentum to "not applying to the circumstances of this case". I understand this to mean that in future cases, where written contracts do address and create an ambiguity, or perhaps other writing from the advertisement to the text messages and emails create ambiguity, that the formation of the residential tenancy agreement around these communications can still attract the principle that interprets ambiguity against the drafter--though interestingly across different media at different times that only together amount to an actual tenancy agreement.
Michael Thiele
www.Ottawalawyers.com
