landlords, tenants, occupants and residential tenancies

INTERPRETATION GUIDELINE #21

Interpretation Guidelines are intended to assist the parties in understanding the Board's usual interpretation of the law, to provide guidance to Members and promote consistency in decision-making. However, a Member is not required to follow a Guideline and may make a different decision depending on the facts of the case.

LANDLORDS AND TENANTS – GENERALLY
 
Residential tenancy agreements must always include a landlord and a tenant. Sometimes, however, people, other than tenants, also live in a rental unit, such as the tenant’s spouse, children, or other occupants or roommates. In addition to the ordinary landlord and tenant relationship, the RTA has specific provisions relating to such matters as sublets, assignments, and unauthorized occupancy of rented residential premises.

Landlord

Subsection 2 (1) of the Residential Tenancies Act, 2006 (the “RTA”) defines a “landlord” in the following way:

“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;

The fact that the RTA states that a landlord “includes” certain persons indicates that the definition in the RTA is not intended to be exhaustive. In determining whether a person is a landlord, the Board will have regard to a number of factors including whether the person has control over the residential complex and the rental unit.

There may be more than one person or company that meets the definition of landlord of a rental unit. Depending on the facts in each application, the registered owner of a building and the property manager having decision making authority with respect to renting units and having responsibility for the day to day operation of the building, may both be landlords for the purposes of the RTA. An application filed with the Board can name just one or all of the landlords for the rental unit.

By virtue of the Mortgages Act, a mortgagee in possession of a mortgaged residential complex is deemed to be a landlord under a tenancy agreement. For example, the mortgagee in possession collects the rent, maintains the rental unit, and acts as the landlord for all purposes.

Tenant

Subsection 2 (1) of the RTA defines a “tenant” as:
 
“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.
 
Where two or more persons are tenants of a rental unit, it is important to consider the nature of their relationship with the landlord to determine if the tenants are joint tenants, tenants in common, or, as in the case of a rooming house, they have separate and distinct tenancy agreements with the landlord and live separately from one another.

In a joint tenancy, there is a single tenancy agreement and the tenants are jointly and severally (individually) liable for the payment of the entire rent for the rental unit.

In the case of a tenancy in common, while all the tenants are occupying the same premises, each tenant in common has a separate tenancy agreement with the landlord even if all the tenants have signed one tenancy agreement. Each tenant in common is individually responsible for the payment of his or her share of the rent for the rental unit.

A joint tenancy can be severed by the actions of a tenant and/or the landlord. For example, if one of a number of joint tenants seeks to assign or sublet his share of the rental unit and the landlord consents to that assignment or sublet, the former joint tenancy will be severed and a tenancy in common will result.

In the case of a rooming house, each tenant has a separate tenancy agreement with the landlord and each tenant lives separately. The tenants may use certain common facilities such as washrooms, living rooms and kitchens.

The determination of the nature of any particular tenancy, whether a joint tenancy, a tenancy in common, or, a rooming house will depend upon the Board’s finding of fact in each case, which includes the Board’s determination of the real substance of the transactions and activities relating to the rental unit.

Not everyone who may be named a tenant in a tenancy agreement will meet the definition of “tenant” for the purposes of the RTA. As discussed below, people other than a tenant may live in the rental unit with the tenant’s consent. Section 202 of the RTA requires the Board, in making findings on an application, to ascertain the real substance of all transactions and activities relating to a residential complex or to a rental unit. In Parsons v. Twin Elm Estates, [2001] O.J. No. 1907, the Divisional Court stated that what is now section 202 of the RTA requires the Board to find the true facts about the relationship between a landlord and a tenant, regardless of the form in which that relationship may be set out. Where, for example, a person who does not actually have the right to occupy a rental unit, enters into a tenancy agreement as a “tenant”, the Board, in determining if that person is, in fact, a tenant will consider the real substance of the tenancy agreement and the relationship between the parties.

For example, where a person guarantees the payment of rent by the tenant, and is named as a tenant in the agreement, the guarantor does not become a tenant within the meaning of the RTA if the guarantor has no right to occupy the rental unit.

The written or oral tenancy agreement will usually specify who is considered a tenant. If the tenancy agreement is not clear with respect to identifying a tenant, the Board will determine who is a tenant by looking at a number of factors such as, who entered into the agreement with the landlord, who is entitled to occupy the rental unit under the tenancy agreement, who pays the rent and who deals with tenancy related issues with the landlord.

As is the case with the definition of “landlord” in the RTA, the definition of “tenant” is not intended to be exhaustive. For example, while the definition of “tenant” includes the tenant’s heirs, assigns and personal representatives, the RTA provides that if a tenant of a rental unit dies and there are no other tenants of the rental unit, the tenancy is deemed to be terminated 30 days after the death of the tenant.

In Jemiola v. Firchuk, [2005] O.J. No. 6085, the Divisional Court stated that the definition of “tenant” is broad and inclusive and should be broadly and liberally construed. The Court noted, however, that a child who was an occupant of the rental unit in which his mother was the tenant, who wanted to remain in the rental unit after his mother’s death and who made a single payment of rent after his mother’s death was not a tenant.

Spouse of the Tenant

Subsection 2 (1) of the RTA defines a “spouse” as:
 
a person,

(a) to whom the person is married, or

(b) with whom the person is living in a conjugal relationship outside marriage, if the two
     persons,
 
(i) have cohabited for at least one year,

(ii) are together the parents of a child, or

(iii) have together entered into a cohabitation agreement under section 53 of the Family Law Act.
 
A spouse of a tenant may or may not be a tenant depending on the facts in any given case. For example, if only one of two spouses is listed on the tenancy agreement as a tenant, the spouse may not be a tenant for the purposes of the RTA.

Subsection 3 (1) of Ontario Regulation 516/06 made under the RTA states that if a tenant of a rental unit dies and leaves a surviving spouse who is only an occupant and not a tenant of the rental unit, on the death of the tenant the surviving spouse is then included in the definition of a “tenant” unless the surviving spouse vacates the rental unit within thirty days after the tenant’s death.

Similarly, subsections 3 (2) and (3) of Ontario Regulation 516/06 state that where a tenant of a rental unit vacates the rental unit without giving a notice of termination and without entering into an agreement to terminate the tenancy and has a spouse who occupies the rental unit as their principal residence, the spouse is then included in the definition of “tenant”, except where any one or more of the following criteria exists: 
 
1. The rental unit is in a building containing not more than three residential units and the landlord resides in the building.

2. The spouse vacates the rental unit no later than 60 days after the tenant vacated the rental unit.

3. The tenant who vacated the rental unit was not in arrears of rent and the spouse fails to advise the landlord, before an order is issued under section 100 of the Act, that he or she intends to remain in the rental unit [1].

4. The tenant who vacated the rental unit was in arrears of rent, the landlord gives the spouse a notice in a form approved by the Board within 45 days after the date the tenant vacated the unit, and the spouse fails, within 15 days after receiving the notice,
 
i. to advise the landlord that he or she intends to remain in the rental unit, or

ii. to agree in writing with the landlord to pay the arrears of rent. 

5. The tenant who vacated the rental unit was in arrears of rent, the landlord does not give the spouse a notice referred to in paragraph 4 within 45 days after the date the tenant vacated the unit, and the spouse fails, before an order is issued under section 100 of the Act,

i. to advise the landlord that he or she intends to remain in the rental unit, or

ii. to agree in writing with the landlord to pay the arrears of rent.
 
The extended definition of “tenant” with respect to a spouse of a tenant does not apply, however, in cases of social housing, care homes and certain types of government housing.
 
Occupants and Roommates

There is no definition of “occupant” in the RTA.

For the purposes of proceedings at the Board, an “occupant” may be considered to be a person who is not a tenant but who lives in a rental unit as their principal place of residence. An occupant may be authorized or unauthorized depending on the facts of each case.

Similarly, there is no definition of “roommate” in the RTA.

A “roommate” is a person who, like an occupant, shares a room with a tenant or shares a rental unit or part of it with a tenant.

In the ordinary circumstance, a person may reside as an occupant or a roommate in a rental unit with or without the consent of the landlord provided that the tenant also resides in the rental unit.

In some cases, a written tenancy agreement may provide who is an occupant of the rental unit. However, even where the written tenancy agreement does not specify who is an occupant, or, where there is no written tenancy agreement, a person may be an occupant of a rental unit provided that person has the consent of the tenant to live in the rental unit and the person’s occupancy of the rental unit does not result in overcrowding within the meaning of section 67 of the RTA [2].

An occupant or roommate lives in the rental unit at the invitation and at the indulgence of the tenant and under the terms of the tenancy. An occupant or roommate cannot file an application relating to the tenancy against either the landlord or the tenant in proceedings at the Board.

Since an occupant or a roommate is not a tenant, that person has no contractual relationship with the landlord, irrespective of whether the occupant or roommate pays a fee to the tenant or subtenant to reside in the rental unit. Where the occupant pays a portion of the rent for the unit directly to the landlord, and defaults in payment of his or her share of the rent, the tenant remains liable to the landlord for payment of the entirety of the rent irrespective of any agreement between the tenant and the occupant with respect to payment of rent.

Where an occupant pays part of the rent directly to the tenant, the occupant does not become a tenant. Where the occupant pays part of the rent directly to the landlord, the payment of rent does not automatically result in the occupant becoming a tenant. A determination as to whether that occupant is a tenant will depend upon the facts in each case.

As noted, a finding that a person is an occupant means that the occupant has no protection or rights in proceedings at the Board under the RTA. Any rights that the person may have outside the RTA must be sought in a court.

Unauthorized Occupants

With the exception of an occupant who is a spouse of a tenant and to whom the extended definition of tenant set out above under the definition of “spouse” applies, an occupant cannot legally remain in a rental unit forever. If the tenant vacates the rental unit or the tenancy is terminated by the Board, the occupant or roommate must vacate the rental unit along with the tenant.

If the occupant or roommate does not vacate the rental unit when the tenant vacates that unit (either voluntarily, or, when the tenancy is terminated by order), the occupant becomes an unauthorized occupant and the landlord may apply to the Board under section 100 of the RTA for an order terminating the tenancy and evicting the person who remained in the unit after the tenant vacated.

If the landlord does not apply to the Board for an order terminating the tenancy and evicting the unauthorized occupant within 60 days after discovering the unauthorized occupancy, the occupant becomes a tenant.

Subtenants and Subtenancies

Subtenant

Subsection 2 (1) of the RTA defines a subtenant as:
 
the person to whom a tenant gives a right under section 97 to occupy a rental unit.
 
For a subtenancy to exist under the RTA, the tenant (the “head tenant”) must:
 
a) vacate the rental unit;

b) give one or more other persons the right to occupy the rental unit for a term ending on a specified date before the end of the tenant’s term or period; and

c) retain the right to resume occupancy of the rental unit at the end of the tenancy; and

d) obtain the consent of the landlord.
 
While the term “head tenant” is occasionally used, it does not appear in the RTA. A “head tenant” is a landlord in terms of the head tenant’s relationship with an authorized subtenant. A tenant does not become a landlord, within the meaning of that term in the RTA, to their roommate/occupant.
 
a) Vacate the rental unit.
 
If a tenant does not vacate the rental unit but allows another person to live in the rental unit with the tenant, a sublet is not created within the meaning of the RTA. In such a case there is no landlord and tenant relationship between the tenant and that other person or between that other person and the landlord. In that case, no consent of the landlord is required and the other person is a roommate of the tenant and/or an occupant of the tenant’s rental unit.

A tenant can allow people to occupy the rental unit with the tenant but the tenant cannot subdivide the rental unit into more than one rental unit. For example, if a tenant rents an entire home, the tenant may permit a person to live in and have exclusive use of the basement of that home, however, the home, including the basement, remains the rental unit. That other person would be a roommate of the tenant or an occupant of the rental unit and that roommate/occupant has no protection under the RTA.

If a tenant does vacate the rental unit and gives possession of the entire rental unit to another person, but does not obtain the consent of the landlord pursuant to section 97 of the RTA, there is no authorized sublet pursuant to the RTA. The landlord may apply to the Board under section 100 of the RTA for an order terminating the tenancy and evicting the person who remained in the rental unit after the tenant vacated.
 
b) Period of time that is less than the head tenant’s lease with the landlord.

In addition, the requirement that the right to occupy given to the potential subtenant must be for a period of time that is less than the term of the head tenant’s lease indicates that there must be a tenancy agreement between the landlord and the head tenant for a specific term. Therefore, in the ordinary case, there cannot be a sublet of a month to month tenancy. It is, however, theoretically possible to create a subtenancy for one month less one day in the case of a month to month tenancy.
 
c) Consent of the landlord.

Subsection 97 (2) of the RTA provides that a landlord shall not arbitrarily or unreasonably withhold consent to the sublet of a rental unit to a potential subtenant.

The RTA does not define the terms, “unreasonable” or “arbitrary”. In deciding whether the landlord unreasonably withheld consent, the Board may consider the surrounding circumstances, the commercial realities and the economic impact of the subletting on the landlord within the context of a reasonable person standard: Colisanti v. Katz (1996), 1 R.P.R. (3d) 200 (Ont. Gen. Div.).

Subsection 98(1) of the RTA provides that if a landlord does arbitrarily or unreasonably withhold consent to the sublet to a potential subtenant, the tenant or former tenant may apply to the Board for an order determining that the landlord has arbitrarily or unreasonably withheld consent to the sublet, to a potential subtenant. If the Board finds that the landlord has arbitrarily or unreasonably withheld consent to the sublet to a potential subtenant, the Board may, pursuant to subsection 98 (3) of the RTA:
 
• Authorize the proposed sublet;

• Authorize an alternative sublet proposed by the tenant;

• Terminate the tenancy; and/or

• Grant an abatement of the tenant or the former tenant’s rent.
 
Pursuant to subsection 98 (4) of the RTA, the Board may establish terms and conditions with respect to the sublet.
 
A person who takes possession of the entire rental unit from a tenant without the consent of the landlord is, along with the tenant, subject to eviction pursuant to subsection 100 (1) of the RTA.

A person does not become a subtenant with rights under the RTA unless the requirements of a sublet as set out in the RTA are met. Therefore, if the tenant does not obtain the consent of the Landlord, even if all of the other conditions are met, that other person is not a subtenant under the RTA.

In Dupont and Pecoski v. Weir and Weir, (an unreported decision of the Divisional Court - October 13, 2010), a case where a deceased tenant had purported to transfer his leasehold interest in a residential rental unit to his daughter, the Court stated that, irrespective of the provisions of the RTA (relating to a deceased tenant) where no assignment or sublet of the premises had been consented to in writing by the landlord, the lease was at an end.

Rights of a Subtenant

If the tenant sublets the rental unit in accordance with the RTA, the subtenant has certain rights.

Subsection 97(4) of the RTA provides that, if a tenant has sublet a rental unit to another person,
 
(a) the tenant remains entitled to the benefits, and is liable to the landlord for the breaches of the tenant’s obligations under the tenancy agreement or this Act during the subtenancy; and

(b) the subtenant is entitled to the benefits, and is liable to the tenant for the breaches, of the subtenant’s obligations under the subletting agreement or this Act during the subtenancy.
 
A landlord and a subtenant are not liable to each other for breaches of the tenancy agreement or of the RTA. A subtenant must turn to the tenant with respect to breaches of the RTA; the tenant may, in turn, enforce obligations against the landlord and conversely.

Section 99 of the RTA provides that certain provisions apply, with necessary modifications, with respect to a tenant who has sublet a rental unit, as if the tenant were the landlord and the subtenant were the tenant.

Pursuant to paragraph 1 of section 99 of the RTA, a tenant may give a subtenant a notice of termination for any of the grounds set out in sections 59 to 68. These are:
 
Section 59 – arrears of rent
Section 60 – misrepresentation of income [3]
Section 61 – illegal act
Section 62 – damage to rental unit
Section 63 – expedited termination
Section 64 – interference with enjoyment
Section 65 – interference with enjoyment in small building
Section 66 – impairment of safety
Section 67 – overcrowding
Section 68 – further contravention (second notice)
 
In addition, paragraph 2 of section 99 of the RTA permits a tenant to apply against a subtenant under section 69 for an order on the grounds listed above. The tenant may also apply under section 87 for payment of arrears of rent, section 89 for damage to the rental unit and section 148 regarding care homes.
 
Subsection 135 (1) of the RTA provides that a tenant or former tenant of a rental unit may apply to the Board for an order that the landlord, superintendent or agent of the landlord pay to the tenant any money collected or retained in contravention of the RTA. Subsection 135 (3) of the RTA provides that a subtenant may apply to the Board for an order under subsection 135 (1) as if the subtenant were the tenant and the tenant were the landlord. Apart from section 135, there is no explicit authority in the RTA for a subtenant to apply against a head tenant.

A narrow interpretation of the RTA would result in a subtenant not being able to apply to the LTB under any other section than 135. A tenant, in contrast, would be able to apply against a subtenant on many of the same grounds as a landlord can apply against a tenant. This would create a legal imbalance where the subtenant would have no rights as a tenant but would have all the obligations of a tenant.

Clause 97(4)(b) of the RTA, however, provides that a subtenant is entitled to the benefits and is liable for the breaches under the RTA during the subtenancy. In order for this provision to have both legal and practical effect, the subtenant must be able to enforce the benefits to which the subtenant is entitled against the head tenant.

A person claiming to be a subtenant but who is not an authorized subtenant may have rights as against the head tenant but does not have those rights in proceedings at the Board. Any rights that the person may have outside the RTA must be sought in a court.

Assignees and Assignments

Assignee

There is no definition of “assignee” in the RTA.

An assignee, in the residential tenancy context, is a person to whom a tenant’s interest in a residential tenancy has been transferred by a tenant.

Section 95 of the RTA applies to assignments of a rental unit by a tenant to another person.

In the case of an assignment of a rental unit, the tenant must seek the consent of the landlord to the assignment.

The request to assign may be either general or specific. If the request is general, subsection 95 (2) of the RTA applies and, if the request is specific (that is, to a specifically named assignee), subsection 95 (3) of the RTA applies.

Before seeking the landlord’s consent to an assignment to a specifically named assignee, a tenant is entitled to obtain confirmation from the landlord as to whether the landlord is, in principle, prepared to consent to an assignment.

A landlord has a right to refuse to consent to an assignment of a rental unit in the case of both a general or a specific assignment. Where a landlord completely refuses to consent to an assignment, or does not respond to the tenant within seven days after the tenant has made a request for the landlord’s consent to an assignment, the tenant may give the landlord a notice of termination within thirty days after the date the tenant requested consent to an assignment. The date for termination specified in the notice must be at least the number of days after the date of the notice that is the lesser of the notice period for termination of a tenancy otherwise required under the RTA and 30 days.

Where a landlord has consented to an assignment in principle, the tenant must still obtain the landlord’s further consent to an assignment to a specific assignee. In that case, the landlord will determine if the potential assignee is an appropriate tenant. The landlord may refuse to consent to a specific assignment. For example, a landlord was found to have reasonably withheld consent to the tenant’s proposed assignees where the landlord maintained and followed a waiting list for prospective tenants for the buildings it owned. (Burns v. Belmont Construction Co., [1987] O.J. No. 1732 (Ont. Dist. Ct.)

Subsection 98 (1) of the RTA provides that if a landlord does arbitrarily or unreasonably withhold consent to the assignment to a potential assignee, the tenant or former tenant may apply to the Board for an order determining that the landlord has arbitrarily or unreasonably withheld consent to the assignment to a potential assignee. If the Board finds that the landlord has arbitrarily or unreasonably withheld consent to the assignment to a potential assignee, the Board may, pursuant to subsection 98 (3) of the RTA:
 
• Authorize the proposed assignment;

• Authorize an alternative assignment proposed by the tenant;

• Terminate the tenancy; and/or

• Grant an abatement of the tenant or the former tenant’s rent.
 
Pursuant to subsection 98 (4) of the RTA, the Board may establish terms and conditions with respect to the assignment.
 
Upon the landlord’s consent to the assignment, the assignee takes on the obligations of the tenant and the benefits of the landlord’s obligations. The assignee is not liable to the landlord for any breaches of the RTA or of a tenancy agreement that occurred prior to the date of the assignment. The tenancy continues on the same terms as was the case with the original tenant.

The assignor (the former tenant) is liable to the landlord for any breach of the tenant’s obligations and may enforce against the landlord any of the landlord’s obligations under the tenancy agreement or the RTA if the former tenant’s breach or the landlord’s obligation relates to the period before the date of the assignment. In the event that the assignee (current tenant) breaches any obligation to the landlord after the date of the assignment, the former tenant has no liability to either the landlord or to the current tenant in proceedings at the Board.

Pursuant to clause 95 (8)(c) of the RTA where the original tenant has commenced a proceeding under the RTA before the effective date of the assignment of the tenancy, and the benefits or obligations of the new tenant (the assignee) may be affected in the proceeding started by the original tenant, the new tenant has the option of joining in that application or continuing with the proceeding.

Consent to Assignments and Sublets – Human Rights Code Considerations

Reference should be made to the provisions of Interpretation Guideline 17 – “Human Rights Guideline”.

In considering whether a landlord has arbitrarily or unreasonably withheld consent to an assignment or sublet of a rental unit, the Board will have regard to whether, in withholding consent to the proposed assignment or sublet, a landlord has acted in a manner that contravenes the landlord’s obligation to comply with the requirements of the Human Rights Code.


Released Date: January 06, 2012

 

[1]  Section 100 of the RTA permits a landlord to apply to the Board for an order terminating the tenancy of a tenant and evicting the person to whom the tenant transferred occupancy of the rental unit if the tenant transferred occupancy other than by way of an authorized sublet or assignment.

[2] Pursuant to section 67 of the RTA, a landlord may give a tenant notice of termination of the tenancy if the number of persons occupying the rental unit on a continuing basis results in a contravention of health, safety or housing standards required by law.

[3] Observe that section 60 could never come into play in a subtenancy. Section 60 refers to a rental unit described in section 7, but section 7 states that sections 95 to 99 do not apply to a rental unit described in section 7.