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3. Landlords, Tenants and Their Legal Manifestations
(a) Overview
Many residential L&T relationships are between people ("natural persons") who are the owners of the rented premises, and other people who rent from them and live in them. In most cases the parties will have no doubt about who they are in the relationship.
Of course, sometimes people die or otherwise transfer (intentionally or otherwise) their legal interest in the relationship, thus creating any of a range of landlord or tenant "varieties" explained in this section. These can include [Act s.2(1)]:- heirs
- assigns
- personal representatives
The special situation of a spouse after the tenant has died or abandoned rented premises is discussed below in s.4: "Spousal Assumption of Tenancy on Death or Abandonment".
As well, while all residential tenants and most landlords are "natural persons" (ie. human beings) to begin with - that isn't always the case. The RTA recognizes this by including a range of possible legal entities within the definition of "person" as it is used in the legislation: Act s.2(1)
In this Act,
"person", or any expression referring to a person, means an individual, sole proprietorship, partnership, limited partnership, trust or body corporate, or an individual in his or her capacity as a trustee, executor, administrator or other legal representative; Some of these variations themselves can come in a range of further forms (eg. trustees and "other legal representatives"). All are explained generally below.
(b) Sole Proprietors
At law, a sole proprietor is just a "natural person" conducting business. They may do so under their own name or under a "business name", which can be different from their personal name, and which should be registered with the province.
This concept is further explained in the Isthatlegal.ca Small Claims Court (Ontario) Legal Guide at this link Small Claims Court (Ontario): Ch.4, s.3: Parties: Identifying and Naming Business Organizations. Pay special attention to the implications of using an unregistered business name.
(c) Partnerships
Partnerships of course include more than one "person" but are otherwise legally similar to sole proprietorships in that they are unincorporated. Partnerships can take several forms: regular, limited and limited liability. The distinctions mainly revolve around when and if the individual partners are personally responsible for the liabilities of the partnership.
The concept is further explained in the Small Claims Court program at the link above. Pay special attention to the implications of a partnership using an unregistered business name.
(d) Corporations (also "body corporate")
Corporations are totally creatures of legislation, and can be created under any of a range of provincial, federal and even foreign statutes. Most corporations operating in Ontario are created under the Business Corporations Act (Ontario), but they can also be created under the Corporations Act (mostly these are non-profit Ontario corporations) and even the Co-operative Corporations Act. The federal level has similar statutes.
Creating a corporation is a relatively simple matter of paperwork and signatures, with a moderate fee of a few hundred dollars. Corporations are traditionally noted as having two defining legal features: legal personality and limited liability.
Legal personality means that - like humans - they can own property and contract with other legal entities (such as other corporations and humans).
Limited liability means that if they are sued then the plaintiff/creditor can normally only collect against the assets of the corporation, and not those of directors, shareholders or members.
(e) Fiduciaries (of all types)
There is a broad range of situations where a landlord or a tenant may find that their interest in the relationship falls to or is transferred to another legal entity known generally as a "fiduciary". Fiduciaries can be either other people or corporations (such as a trust company), and are charged with a "fiduciary" duty to manage property for interests other than their own. Typically, but not always, these 'other interests' are the best interests of the owner (or former owner) of the subject property. Bankruptcy is a variation on this where the interests to be served are those of the creditors.
In order to understand the role of a fiduciary in these situations it is important to appreciate that (from the perspectives of both landlords and tenants) a tenancy has both a "possessory" aspect and an "interest in land" (ie. a value) aspect. Further, a tenancy - being akin to a contract - also has potential liabilities associated with it.
The role of a fiduciary is primarily involved with the title interest. Tenant fiduciaries are rarely - if ever - really interested in the possessory aspect of the tenancy themselves (ie. they don't want to "move in"). Similarly, while landlord fiduciaries may be interested in regaining possession from any occupying tenants in order to make the property more saleable, they rarely have any personal interest in possession. Note:
Situations where a tenant transfers their possessory rights are dealt with in s.5: "Subletting, Assignments and Similar Arrangements", below. Situations were a spouse survives a deceased tenant and wants to retain possession are dealt with in s.4: "Spousal Assumption of Tenancy on Death or Abandonment", below. Fiduciaries can come in many forms and in many situations, including:- Executors
The person designated in a will by the deceased to follow their instructions (ie. their "will") about distribution of the deceased's property and generally winding up their financial and property-related affairs.
- Estate Administrators
Where a person dies without a will (intestate) then interested persons can go to court to have an "administrator" of the estate appointed. They then perform the same essential functions as an executor (above).
- Trustees
Property can be transferred into a "trust", which technically is a "title" conveyance (ie. a formal property transfer) to another legal entity (the trustee), but a retention of the "beneficial" interest by the "beneficiary" of the trust (usually the original owner).
Trusts have a variety of uses, and are sometimes used as a device to hold the assets of children (those under 18) until they reach the age of majority (18th birthday).
- "Attorneys" under a Power of Attorney
First note that an "attorney" - as the term is used with respect to "Powers of Attorney" - does not necessarily refer to a lawyer - any competent adult can fulfil this role.
A "power of attorney" is a common way of arranging for one's affairs while out of the country or when concerned that one might become mentally incompetent through advanced age or otherwise. This can be achieved through the use of relatively simple documentation (packages are available from the Public Guardian and Trustee's office).
A Power of Attorney achieves goals similar to that of a trust but avoids the formal transfer of the property to the "Attorney". Rather the "attorney" acts as the owner's legal representative for property purposes.
- Bankruptcy Trustees
A person can be put "into bankruptcy" voluntarily (assignment), or involuntarily by the way of petition or (less commonly) the appointment of a "receiver". In any case the process involves a legal (not necessarily a physical) "transfer" of all the bankrupt's property to the trustee or receiver. The "trustee in bankruptcy" is then charged with determining all the bankrupt's assets and liabilities, liquidating assets and then paying off the liabilities in accordance with certain rules and priorities.
In personal bankruptcies the bankrupt is typically allowed to keep control and use of many items for their immediate personal use. However corporations and large proprietors can go bankrupt leaving "assets" including property and in some cases leases (which are viewed as assets as well) - in the hands of the trustee or receiver. Thus a tenant may find themselves one day on the receiving end of a notice asserting the appointment of the bankruptcy trustee and directing that they start paying their rent to them instead of the landlord.
(f) Mortgage Proceedings
Another situation where a tenant can find that the landlord has changed suddenly is where the property contained the rental unit becomes the subject of mortgage foreclosure [taking of ownership by the mortgagee (mortgage lender)] or power of sale (selling of the property on the open market) by the mortgagee.
The status of tenants and mortgagee through these proceedings is discussed at length in Ch.2, s.9: "Special and Exempt Premises: Mortgage Proceedings".
(g) "Landlord" Summarized
With the above preamble we are better equipped to understand the formal legal definition of "landlord" in the RTA: Act s.2(1)
"landlord" includes,
(a) the owner of a rental unit or any other person who permits occupancy of a rental unit, other than a tenant who occupies a rental unit in a residential complex and who permits another person to also occupy the unit or any part of the unit,
(b) the heirs, assigns, personal representatives and successors in title of a person referred to in clause (a), and
(c) a person, other than a tenant occupying a rental unit in a residential complex, who is entitled to possession of the residential complex and who attempts to enforce any of the rights of a landlord under a tenancy agreement or this Act, including the right to collect rent; This definition is quite broad and includes:- Purchasers of the property
- Heirs
Who take title under a will or estate administration.
- Trustees
Who have "taken title" to the property for management purposes.
- Sublettor and Assignor Tenants
This issue relates to the passage in the definition above [(a)] reading: "other than a tenant who occupies a rental unit in a residential complex and who permits another person to also occupy the unit or any part of the unit".
Note from s.5 "Subletting, Assignment and Similar Arrangements" below, that subletting tenants ("chief tenants" or "sublettors") and assigning tenants ("assignors") must - by definition - give up occupation of the rental unit. Therefore tenants who are merely sharing the unit with another person (but remaining in occupation themselves) do not meet the definition of "landlord" for present purposes. Subtenants and assignors however - who do give up occupation - do meet the definition.
This seems odd, but further note that RTA provisions exist which allow sublettors (who, unlike assignors, retain a residual right to return to the premises) to apply to the Board for Orders evicting sub-tenants [see Ch.8, s.2: "Other Termination Procedures: Application to Evict an Overholding Sub-tenant"].
- Personal Representatives
This can include those acting under a Power of Attorney.
Casenote:
In The Law Society of Upper Canada v. Chiarelli (Ont CA, 2015) the court held that someone acting as a representative of a landlord, without being licensed to do so and not falling under any Law Society provisions which exempted them from the requirement of paralegal licensing, did not fall under the RTA s.2(1) definition of landlord. Further, such representation did not render the agent a landord under any of the phrasings of the definition of "landlord" contained in Act s.2(1)]:- "any other person who permits occupancy of a rental unit",
- a "personal representative" of "any other person who permits occupancy of a rental unit", or
- one "who attempts to enforce any of the rights of a landlord".
(h) "Tenant" Summarized
Similarly, we can now have a fuller understanding of the corollary definition of "tenant": Act s.2(1)
In this Act,
"tenant" includes a person who pays rent in return for the right to occupy a rental unit and includes the tenant's heirs, assigns and personal representatives, but "tenant" does not include a person who has the right to occupy a rental unit by virtue of being,
(a) a co-owner of the residential complex in which the rental unit is located, or
(b) a shareholder of a corporation that owns the residential complex; "Heirs, assigns and personal representatives" are discussed above regarding landlords. While technically a tenant's lease is their asset, and technically is transferrable through assignment or a sub-tenancy, few if any heirs, assignees or representatives try to realize any value from it - it just isn't worth the effort.
The exclusion of "co-owners" is probably unnecessary, as the exclusion of all "owners" is implicit in the L&T relationship.
The definition's exclusion of shareholders of a corporate owner is also superfluous as no one would advance them realistically as "tenants", and - barring a unique shareholder agreement - shareholder status alone not impute possessory rights to corporate property. This 'shareholder' exclusion clause is probably meant to address the so-called 'co-ownership' arrangements that have been little tested in law.
The definition of "tenant" is broad enough to encompass subtenants and assignees: (ie. "a person who pays rent in return for the right to occupy a rental unit"). This complements the conclusion reached in the discussion of "sublettors" as landlords (above).
Note further that not all legal occupants of rented premises are 'tenants' just by that fact. It is very common to have one adult resident enter into the lease (who "pays the rent"), and then have their spouse and children (or any other sharing co-residents for that matter) live with them. Unless they have, either expressly or by implication, established themselves as full tenants (for example by paying rent) then these others are non-tenant occupants.
The status of a co-resident spouse on death of the "main" tenant is discussed in s.4 immediately below.
4. Spousal Assumption of Tenancy on Death or Abandonment
(a) Overview
As noted immediately above ("Tenants Summarized") remember that not all legal residents of rented premises are necessarily "tenants". A tenants is the one (or more - as with "joint tenants") who's name is "on the lease", is party to the original verbal lease, or has otherwise recognized by the landlord as a tenant (for example by paying rent). Other occupants (commonly spouses or children) are not tenants and they derive their rights of occupancy through those of the tenant/s.
The RTA recognizes and accomodates for the situation of a remaining non-tenant co-resident spouse (and thereby - in most cases - the remaining co-resident children as well) where a tenant dies or abandons the premises.
The legal definition of "spouse" includes [Act s.2(1)] either A or B following: A. a person to whom the tenant is married (which now includes same-sex spouses) in Ontario;
B. a person with whom the tenant lives in a "conjugal relationship" outside of marriage if any of the following conditions are also met:
- they have co-habited for a least a year;
- together they are the parents of a child; or
- have entered into a cohabitation agreement under s.53 of the Family Law Act. These are agreements between unmarried couples regarding property, spousal and child support, and related matters. Note that "cohabitation" does not mean simple co-residence. It is generally considered to include financial and social interdependence meeting the concept of "spousal".
Note however that no 'spousal assumption' of the tenancy on death of, or abandonment by, the sole tenant occurs where the premises are [Reg s.3(4)]:- care home premises [see Ch.2, s.3: "Special and Exempt Premises: Care Homes"];
- social housing [see Ch.2, s.8: "Special and Exempt Premises: Social Housing"]
(b) Death of Tenant
Generally, where a sole tenant (even if there are other legal co-residents) dies the tenancy automatically terminates 30 days later [Act s.91(1)]. On death there are legal provisions for the preservation and removal by the estate of the tenant's property [see Ch.4, s.1(d): "Termination Fundamentals: Overview: Death of the Tenant"].
Subject to the exceptions noted in sub-section (a) above for care home and social housing, if the rental unit is also the principle residence of the deceased's tenant's spouse, and the spouse stays longer than 30 days after the death, then the spouse automatically assumes the status of being the legal "tenant" and the tenancy continues under the same terms that existed when the now-deceased spouse was alive [Reg s.3(1)].
(c) Abandonment by Tenant
For purposes of the following provisions, a tenant "abandons" premises if they simply leave:- without themselves giving any formal Notice of Termination, or
- without entering into an Agreement to Terminate the tenancy.
Subject to the exceptions noted in sub-section (a) above for care home and social housing - and the exceptions and notice duties noted below, if the rental unit is also the principle residence of the departed's tenant's spouse then the spouse assumes the status of being the legal "tenant" [Reg s.3(2)].
Note though that the situation where a tenant leaves in response to a prior landlord Notice of Termination is not considered "abandonment" for these purposes, and thus does not give rise to the spousal right to assume the tenancy. In such a case continued occupation of the premises by the spouse will be legally treated by the landlord either as continued occupation by the main tenant, subject to normal termination and eviction procedures (where the abandonment is unclear) - or otherwise as an 'unauthorized occupany', subject to the eviction procedures set out in Ch.8, s.1 ("Other Termination Procedures: Unauthorized Occupancy").
Circumstances in which there is no spousal right to 'assume' the tenancy after the tenant's abandonment include any of the following [Act s.3(3)]:- Small Building With Landlord Resident
The landlord resides in the building and the building contains three or fewer residential units in total (note that these do not have to be "rental" residential units);
- Spouse Also Vacates Within 60 days
The spouse also vacates the rental unit within 60 days after the tenant vacates;
- Spouse Fails to Notify Landlord
Generally, where the spouse wants to remain in the premises - they should give the landlord a written notice of their intention to remain in the rental unit promptly. Otherwise, in the following circumstances (which vary according to any rent arrears situation), the 'right of assumption' fails:
A. Where the abandoning tenant was not in arrears of rent, and the landlord obtains a s.100 Board order for termination and eviction of an "unauthorized occupancy" [see Ch.8, s.1: "Other Termination Procedures: Unauthorized Occupancy"] before the spouse advises the landlord of their intention to remain in the premises;
B. Where the abandoning tenant was in arrears of rent and the landlord gives the spouse the below notice within 45 days after the tenant abandons the premises, and 15 days pass after the Notice without the spouse advising the landlord of their intention to remain in the premises or agreeing in writing with the landlord to pay the arrears of rent;
Form N14: Landlord's Notice to the Spouse of the Tenant Who Vacated the Rental Unit
C. Where the abandoning tenant was in arrears of rent and the landlord does not give the spouse the above notice within 45 days after the tenant abandons the premises, and the landlord obtains a s.100 Board order for termination and eviction of an "unauthorized occupancy" [see Ch.8, s.1: "Other Termination Procedures: Unauthorized Occupancy"] before the spouse advises the landlord of their intention to remain in the premises or agreeing in writing with the landlord to pay the arrears of rent.
Basically, any co-resident spouse of an abandoning tenant who wants to remain in possession of the premises should immediately so advise the landlord of that fact (something best done in writing, keeping a copy). Failure to do this properly leaves them at risk of being ordered by the Board out of the premises as an "unauthorized occupants".
5. Subletting, Assignments and Similar Arrangements
(a) Overview
Aside from potential "transfers" of a tenancy on death of or abandonment by a tenant [discussed immediately above], there are two common ways in which a tenant can actively transfer a rental unit to another person. These are "sub-letting" and "assignment".
A sub-letting is distinguished from an assignment by being a temporary transfer (akin to a "lending") of the tenancy to another (the "sublettee" or "sub-tenant") with the "sublettor" (or "chief tenant") reserving a right to return to retake the tenancy at a later point in time that is still within the term of the main tenancy [Act s.2(2)]. As such, while it is a legal possibility for a month-to-month lease [Act s.97(6)], a sub-tenancy is only a practical consideration in a longer term lease. Only a term lease has an appreciable amount of time in it for the subtenant to take and still leave the chief tenant with some remainder when they return.
Of course, while a sublettor cannot grant more than they themselves have, if a landlord should agree to such an arrangement despite the fact that the tenancy is periodic only, the law will likely give effect to the arrangement in some fashion - perhaps treating the subtenant as an assignee (see below).
An "assignment" on the other hand, is effectively a complete transfer of the tenancy by the tenant (the "assignor") to another person, the "assignee". An assignment is analogous to replacing the original tenant with another person, and on the same tenancy agreement terms as the original tenant.
Procedures for sub-letting and assignments, and steps available in the event of refusal are discussed below in sub-sections (c) to (e).
(b) Distinguish Sub-lets from Joint Tenancies and Shared Occupation
Care must be taken to distinguish a sub-let situation from one of "joint tenancy" or simple shared occupancy.
A "joint tenancy" occurs when two or more persons occupy premises simultaneously and are both full "tenants" having joint liability and equal rights as against the landlord. This situation is clear when both persons have their name on a written lease, but if not must be determined from a detailed examination of the relationship between the (potentially) 'joint tenants' and the landlord, and both side's behaviour. Whoever the landlord has accepted rent from or dealt with 'as though' they were full tenants are likely to be considered - in law - full tenants (and thus a 'joint tenant' along with any already recognized ones).
A "shared occupancy" is a similar co-residency situation, but involves (usually) one full tenant(s) and other non-tenant occupants who reside in the premises "under" the tenant's right. Since at least one full "tenant" still resides in the premises, it is not a subletting because a subletting requires that the main tenant vacates the premises [Act s.2(2)]. The non-tenant occupants can be described as 'sharing occupants'. Commonly family members such as spouses and children are such 'shared occupants', but the term can encompass other unrelated adults.
"Shared occupants" are expressly alluded to in the RTA definition of "landlord" [Act s.2(1)]: "landlord" includes,
(a) the owner of a rental unit or any other person who permits occupancy of a rental unit, other than [my emphasis] a tenant who occupies a rental unit in a residential complex and who permits another person to also occupy the unit or any part of the unit, There is special law governing the situation of a shared occupant who is the tenant's spouse when the spouse dies or abandons the premises [see s.4: "Spousal Assumption of Tenancy on Death or Abandonment", above].
(c) Sub-letting and Related Procedures
. Overview
Recall from above that a "sub-letting" is a temporary transfer of the rental unit to another (the "sub-tenant") with the "sublettor" (or "chief tenant") reserving a right to return to retake the tenancy at a later point in time that is still within the main tenancy term [Act s.2(2)]. As such, without landlord co-operation - it is only a practical consideration when the tenant has a term tenancy with adequate time to allow for both the sub-tenancy "term" and the main tenant's return.
. Tenant Right to Sub-let
With the exception of "superintendent's premises" [Act s.97(6)], a tenant may sub-let a rental unit to another person [Act s.97(1)] if they obtain the landlord's consent (as governed below).
The landlord's consent to a sub-let to a specific individual shall not be arbitrarily or unreasonably withheld [Act s.97(2)]. Unlike the situation with a request for consent to assignment (below), the RTA does not otherwise regulate requests for consent to sub-letting.
. Sublet Fees
The landlord may only charge the tenant for their "reasonable out-of-pocket expenses incurred in giving consent to a subletting" [Act s.97(3)]. These are actual external disbursements for such things credit checks - not general 'administrative' charges.
. Legal Consequences of a Subletting
The legal consequences of sub-letting are distinct from those discussed below re assignments. While both chief tenant and sub-tenant are entitled to the same rights from the landlord, the only liability to the landlord is from the chief tenant [Act s.97(4)]. That is, the sub-tenant's liability is only to the chief tenant for breaches of the sub-let agreement, and the sub-tenant has no liability (at least under the RTA) to the landlord (ie. there is no "joint liability").
This structuring does not of course completely immunize the sub-tenant from tort liability to the landlord [see Ch.16: Civil Remedies"], but does seem to do so with respect to the "tenant's obligations under the tenancy agreement". This would not include intentional torts such as assault.
. Tenant's Application to Terminate and Evict a Sub-tenant for Cause
The main tenant may terminate and evict the sub-tenant for cause during the sub-let term, in the same fashion as a landlord can apply to evict a tenant for cause [Act s.99]. Further, these tenant terminations and applications use the same procedures as do landlords, and must be preceded by a proper Notice of Termination suitable for the reason or cause cited [Act s.69(1); see generally Ch.6: "Early Landlord Termination for Cause" and Ch.7: "Non-Payment of Rent Termination"].
Note that the different procedures apply to evict an "overholding" sub-tenant (ie. overholding after the sub-let term has expired). These are discussed in Ch.8, s.2: "Other Termination Proceedings: Application to Evict an Overholding Sub-tenant".
In terminating and evicting a sub-tenant for cause, the chief tenant may rely on any of the following causes of termination, all of which are discussed in Ch.6 "Early Termination for Cause" under the following section headings, or Ch.7 "Non-Payment of Rent Termination":- non-payment of rent
- social housing income misrepresentation
- illegal activities
- damage (normal and severe)
- substantial interference with the reasonable enjoyment (normal and "landlord as neighbour")
- safety
- overcrowding
Also applicable to such terminations are any available "remedial oppourtunity" provisions (if they are available, these are explained the respective Ch.6 sections noted above).
The deadline for making such applications is 30 days after the date of termination specified in the Notice of Termination, with the exception of terminations for non-payment of rent - which have no such deadline.
The "chief" tenant applying for termination and eviction may also seek "ancillary" orders for arrears of rent and "overhold" compensation [Act s.87(3); see Ch.4, s.4(g): "Termination Fundamentals: General Landlord Termination and Eviction Procedures: Ancillary Landlord Remedies"], and for compensation related to repair and/or replacement of damaged property [Act s.89; see Ch.6, s.4(e): "Early Termination for Cause: Damage: Landlord's Application for Damage Compensation"] [Act s.99].
Further, it appears that, when defending against a chief tenant's application for termination and eviction based on non-payment of rent which includes (as it normally would) a claim for arrears of rent compensation, the sub-tenant may argue in defence of the arrears claims (only) any issues, and seek any remedies, which could the subject of a "tenant's" application to assert "tenant rights" regarding repair and maintenance under s.29 of the Act [see Ch.3, s.4: "Tenant's Rights and Remedies: Tenant Rights Applications"]. Note:
This conclusion is based on a 'tracing back' of several cross-referring provisions as follows: Act s.99 allows s.87 arrears application for such chief tenant applications, s.87 adopts the s.82 tenant rights defences in non-payment of rent applications, which opens the door for the sub-tenant to argue s.29 non-repair issues in defence of the arrears claim (only, not the termination or eviction claim). In care homes situations of overholding sub-tenants, the transfer and eviction provisions [Act s.148] are also available to "main" tenants [see Ch.2, s.3: "Special and Exempt Premises"].
. Application to Evict an Overholding Sub-tenant
Unlike the situation for most tenancies [see s.2(e): Periodic v Term Tenancies: Automatic Renewal, above], sub-tenancies do not automatically renew when their term expires, and the sub-tenant's right of occupancy ends at that time [Act s.97(5)]. As such both the main tenant and the landlord have the right to apply to the Board to evict the "over-holding" subtenant if their occupation continues after the end of the sub-let term [Act s.101(1)] (ie. there is no further legal need to "terminate" as there is no "automatic renewal").
However, the right to make such application expires 60 days after the sub-tenancy ends [Act s.101(2)], and such an unchallenged passage of time converts an overholding sub-tenant to an assignee (and thus a full legitimate tenant) [Act s.104].
These provisions are fully discussed in Ch.8, s.2: "Other Termination Procedures: Application to Evict an Overholding Sub-tenant"].
(d) Assignments and Related Procedures
. Overview
As noted above, an assignment is a permanent transfer of one tenant's rights to another. The assignee 'steps into the shoes' of the assignor in that the 'new' arrangement is subject to all the existing terms (term, lease conditions, etc) as the old. Rent controls that apply to the assignor apply to the assignee [Act s.120(1)].
Subject to the landlord's consent, tenants have a general right to assign their rental unit to another person, under the terms of the existing tenancy agreement. As a practical matter, the issue of "assignment" almost always arises with a term tenancy. It is usually easier for a tenant to simply terminate a periodic tenancy than to seek a replacement tenant.
Previous residential L&T law that generally prohibited a landlord from "arbitrarily" withholding this consent has been significantly modified and largely replaced with the tenant's right to terminate the tenancy if a landlord refuses or ignores a request to assign. Note as well that the present law introduces the concepts of 'specific' and 'general' rights to consent, a distinction which turns on whether the outgoing tenant has presented a specific person as assignee "prospect" to the landlord, or has just requested consent "generally". These provisions can be quite confusing.
For what factors a landlord may assess when deciding to consent to a sublet or assignment, see s.2(g): "Negotiating a New Tenancy", above.
. Tenant Right to Assign
Tenants, including those under either term or periodic tenancy agreements, may "assign" a rental unit to another person [Act s.95(1)], with the landlord's consent (as explained below). However, the right of assignment does not extend to tenants of superintendent's premises [Act s.97(9); see Ch.2, s.5: "Special and Exempt Premises: Superintendent's Premises"].
. Request for General Consent to Assignment and Tenant's Right to Terminate on Refusal or Silence
If the tenant's request for landlord's consent to assignment is made without reference to a specific individual "assignee" (ie. for "general consent") then the landlord may simply consent to or refuse their general consent to assignment [Act s.95(2)] (as will be seen below, it is wisest for the tenant to make such a request in writing.). In such a situation there is no prohibition on the landlord "arbitrarily or unreasonably refus(ing) consent to" such a request [Act s.97(5)].
If however the landlord refuses the request, or fails to respond to it within seven days of the request, then the tenant may terminate the tenancy by Notice of Termination given within 30 days after the request is made [Act s.95(4)(a)(b)] [see Ch.4, s.3: "Termination Basics: Tenant Terminations and Agreements to Terminate"]. Further, a Notice of Termination given by the tenant in such circumstances should specify a date of termination at least 28 days away (for daily or weekly periodic tenancies), or 30 days away (otherwise; this includes most tenancies) [Act s.96(2)].
. Request for Specific Individual Consent to Assignment and Tenant's Right to Terminate on Refusal or Silence
If the tenant's request for assignment is made with respect to a specific individual (potential assignee) then the landlord may of course consent to the assignment to the specific individual [Act s.95(3)], or:- Refuse consent to assignment generally (ie. to anyone);
If the landlord refuses the request generally (ie. no assignment at all, no matter who it is), or fails to respond to it within seven days of the request, then the tenant may terminate the tenancy by Notice of Termination given within 30 days after the request is made [Act s.95(4)(c)(d)] [see Ch.4, s.3: "Termination Basics: Tenant Terminations and Agreements to Terminate"]. Further, a Notice of Termination given by the tenant in such circumstances should specify a date of termination at least 28 days away (for daily or weekly periodic tenancies), or 30 days away (otherwise; this includes most tenancies)[Act s.96(2)].
- Refuse consent to assignment to the specific individual
Note firstly that the landlord may refuse specific consent even if the landlord has previously given general consent to assignment [Act s.95(6)].
Note further however that the landlord must "not arbitrarily or unreasonably refuse [specific] consent" [Act s.95(5)].
In this case the 'tenant-termination' provisions above do not apply, and the tenant's remedies lie in application to the Board [see s.5(e): "Tenant Applications On Refusal of Consent", below].
Interpretation Note:
The provision [Act s.95] governing the situation where the landlord refuses a request to consent to assignment to a specific individual are confusing and ambiguous. They can be read as providing the tenant with only the remedy of the Board application discussed in s.5(e) below - or as allowing both that application and the tenant's right to early termination of the tenancy as is set out for other refusals of consent or ignoring of the request. The version set out immediately above is, in my opinion, the best legal interpretation of the applicable Act s.95 provisions. . Assignment Fees
The landlord may only charge the tenant for their "reasonable out-of-pocket expenses incurred in giving consent to an assignment to a potential assignee" [Act s.95(7)]. These are actual external disbursements for such things credit checks - not general 'administrative' fees. It is hard to imagine what legitimate fee could be charged where "general" consent is given to assignment, as this would purely be a matter of the landlord's policy.
. Legal Consequences of an Assignment
Where a tenancy is assigned, the assignee (the "new" tenant") has the same previously existing rights against, and responsibilities to, the landlord as the assignor (the "old" tenant).
However the right of the parties (assignor or assignee tenant versus landlord, and vice versa) to pursue their legal remedies for breaches by the other naturally only relates to the period before or after the assignment (as the case may be), even if the facts grounding the breach existed before, or continued after, the assignment [Act s.95(8)(a)(b)].
For example, if a dispute over the same sub-standard maintenance problem existed both before and after the assignment, both tenants may pursue their remedies for rent abatement, but only as it relates to the rent for 'their' tenancy period. To facilitate such transitions, if the previous tenant has any outstanding Board or other RTA proceedings against the landlord, the assignee may join in or continue those proceedings as a party as long as their rights or obligations are affected in the proceeding [Act s.95(8)(c)].
(e) Tenant Applications On Refusal of Consent
Where a tenant (or former tenant) feels that the landlord has arbitrarily or unreasonably refused consent to either an assignment or a sublet to a specific individual [as above in s.5(d): "Request for Specific Individual Consent to Assignment and Tenant's Right to Terminate on Refusal of Silence"], they may apply to the Board for [Act s.98(1)(3)(4)(5)(6)]:- a determination of that allegation (and if granted the following additional relief);
- an order authorizing the assignment or sublet, on such terms and conditions as it sees fit;
- an order authorizing another assignment or sublet proposed by the tenant, on such terms and conditions as it sees fit;
- an order terminating the tenancy at a specified date, along with an order evicting the tenant at or after that date;
- an order for abatement of the tenant or former tenant's rent.
Form A2: Application About a Sublet or Assignment
No application for such relief may be made more than one year after the refusal [Act s.98(2)].
(f) Unauthorized Assignments and Overholding Subtenants
. New Tenancy Negotiation
Where a person occupies premises under an assignment that has not been consented to by the landlord, or where a sub-tenant overholds and the main tenant has abandoned the premises, the landlord may (in addition to their rights to evict: see below) also elect to negotiate a new tenancy agreement with them [Act s.104(1)(2)].
Where such a new tenancy agreement is negotiated within 60 days after the landlord discovers the unauthorized assignment or overholding sub-tenant (as the case may be), the lawful rent is whatever the parties negotiate (ie. it is subject to the normal rent rules for a new tenancy) [Act s.104(3)], including the duty to serve the new tenant with any "serious breach' Notices [see Ch.12, s.6: "Other Rent Proceedings: 'Serious Breach' Rent Increase Restriction Orders and New Tenants"].
. Application to Evict
Alternatively, the landlord may make an application to evict them within 60 days after learning of their unauthorized occupation [see Ch.8, s.1 and 2: "Other Termination Procedures: Unauthorized Occupancy" and "Application to Evict an Overholding Sub-tenant"].
. Deemed Assignment on Inaction
However, the unauthorized assignment or overholding sub-tenancy will be deemed to be an assignment as though the landlord had consented to it at the date it started, unless one of the following have occured [s.104(4)]:- a new tenancy agreement has been entered into within 60 days of the landlord discovering the unauthorized occupancy;
- the landlord has applied for an "unauthorized occupation" eviction order [under Act s.100; see Ch.8, s.1: "Other Termination Procedures: Unauthorized Occupancy"] within 60 days of the landlord discovering the unauthorized occupancy; or
- either the landlord or the tenant have applied for an "overholding subtenant" eviction order within 60 days after the end of the subtenancy [under Act s.101; see Ch.8, s.2: "Other Termination Procedures: Application to Evict an Overholding Sub-tenant"].
An important implication of these "deemed assignment" provisions is that rent controls continue through an assignment [Act s.120(1)]. However if a new tenancy is negotiated, vacancy decontrol allows any new (ie. market) rent that the parties agree to.
6. Terminology Notes
(a) Purpose
This section clarifies the terminology used in the program and the Residential Tenancies Act.
(b) Abbreviations
When discussing several different statutes in one context, I may use the abbreviation "RTA" to refer to the Residential Tenancies Act, the main statute establishing Ontario's current residential tenancy legal regime. In other contexts - because the RTA is so central to almost all issues in this program - however I may just use the term "Act": eg: [Act s.1(b)].
Similarly, all references in this style: "[Reg s.2(d)]" are to the General Regulation 516/06 under the RTA.
(b) "Residential Unit"
A "residential unit" is any self-contained living accomodation, rental or not. Thus both the typical 'rented' apartment - and the owner-occupied apartment, detached or semi-detached house - are all "residential units".
While the RTA governs the situation of "rental units" (see below), the more inclusive term "residential unit" is useful when the RTA establishes special rules for small buildings and those occupied personally by landlords.
(c) "Rental Unit"
The key concept is that of the "rental unit", which is defined as: Act s.2(1)
In this Act,
"rental unit" means any living accommodation used or intended for use as rented residential premises, and "rental unit" includes,
(a) a site for a mobile home or site on which there is a land lease home used or intended for use as rented residential premises, and
(b) a room in a boarding house, rooming house or lodging house and a unit in a care home; (d) "Residential Complex"
Next we have the term "residential complex" [Act s.2(1)], which is any of:- a building or related group of building containing one or more "rental units" (of course, it could also contain some non-rental "residential unit as well);
- a mobile home park;
- a land lease community; and
- a care home.
Note that the definition of "residential complex" is flexible enough to include a single rental unit in a single building.
Note as well that it includes "all common areas and services and facilities available for the use of its residents". |
