Legal

January 9, 2023 Published by Golden Horseshoe Chapter - By Stephanie Sutherland

Tenants, Landlord Unit Owners, and Condos: How to Create Harmony in Your Condo Community

From the Volume 14, Winter 2023 issue of the CCI GHC Condo News Magazine

The relationship between the Residential Tenancies Act and the Condominium Act, 1998 is a complex one. Even for individuals who have been working in the condo industry for years, the information is not always clear with respect to the ways in which tenants different from unit owners, how a tenancy in a condominium corporation is different than in a non-condo home, and how that affects both the tenant and the condominium corporation.

For those working in the condo industry as well as the multi-residential industry, including residential tenancies, we frequently see the complexities that can arise in interactions between condos, tenants, and landlords. There is often a negative association with tenants in condos, from the perspective of the condo corporations and professionals. However, when each of the condo, landlord, and tenant understands and complies with their rights and obligations, it can contribute to a harmonious condominium community.

Condo Tenancies vs Non-Condo Tenancies

First, it is important to understand how tenancies in a condo differ from tenancies in other types of residential rentals. In a condo, a tenant is required to comply not only with the Landlord’s Rules that may have been set with respect to the Unit, but also to comply with the Condominium Act, 1998 (the Act) and the Declaration, By-laws, and Rules of the condominium corporation. This is why landlord unit owners are required to provide tenants with a copy of those documents; unfortunately, that often does not occur, and sometimes landlord unit owners don’t even let the condo know that they have leased out their unit. When a tenant is provided with those documents and the landlord makes sure to communicate to the tenant the importance and necessity of complying, problems are much less likely to arise.

It is also useful for tenants to understand that condos do have the ability to place certain restrictions on lifestyle that would not be permitted in a non-condo living situation. For example, while a private landlord generally cannot unilaterally prohibit pets, a condominium corporation’s Declaration or Rules is legally permitted to do so. In that case, all residents of the condo, including tenants, are required to abide by the no-pets provision. This is why it is a very good idea for landlord unit owners to confirm to potential tenants that it is a condominium unit that is being rented, and to provide a copy (or at least a summary) of the Declaration, By-laws, and Rules before entering into the lease. That way, the tenants are aware of what they are agreeing to.

Another difference between condo and non-condo tenancies is that the condominium’s property manager (PM) is very rarely also the rental manager (RM). Many landlords will hire an RM, but that person should not be confused with the condo’s PM. The PM should not be contacted about the tenant’s concerns relating to the unit; those concerns should be addressed to the landlord who can then, as a unit owner, communicate with the condo through the PM to address the situation – assuming that it is something that is the condo’s responsibility and not the unit owner/landlord’s responsibility. It is important for landlord unit owners to make their tenants aware of the communication chain.

Tenants vs Unit Owners

In addition to the difference in who problems should be reported to, there are several other differences between tenants and unit owners in condos. Owners are entitled to receive information about the condo, such as the budget, financial statements, reserve fund study, while tenants are not. Owners are entitled to vote at owners’ meetings; tenants are not.
Owners can make decisions on behalf of their unit, whereas tenants must refer the question to their landlord unit owner.

One of the largest and most frequently encountered differences between owners and tenants is that owners are entitled under the Act to bring certain types of legal proceedings against the condo, including at the Condominium Authority Tribunal (CAT), whereas tenants do not (at least yet) have that right. On the other hand, the condo is permitted to bring legal proceedings against both owners and tenants (as occupiers of a unit).

Condo Landlords vs Non-Condo Landlords

On top of a unit owner’s usual obligations under the Condo Act, such as paying common expenses, repairing and maintaining their unit, and complying with the condo’s governing documents, a landlord unit owner also has to abide by the provisions of the Residential Tenancies Act (RTA). This can be a difficult balancing act for landlord unit owners, particularly when it comes to non-compliance by tenants.

A condo is entitled to require a landlord unit owner to ensure a tenant’s compliance. However, the landlord unit owner must follow the process set out in the RTA for addressing tenant compliance issues. In non-tenant situations, condos will often expect problems to be resolved within a reasonable time frame, or legal proceedings will be commenced. What is considered a ‘reasonable’ time frame for dealing with problems at the Landlord and Tenant Board (LTB), however, is vastly different than what would usually be considered reasonable when a condo is dealing directly with a unit owner or a non-tenant occupier.

In these situations, the best-case scenario is one where the landlord unit owner and the condo work cooperatively to resolve the situation. If the tenant does not know or understand their obligations with respect to the condo’s governing documents, then a meeting or discussion with the tenant, landlord unit owner, and condo representative may be an easy solution to address the problem.

If non-compliance continues and the landlord unit owner commences an application at the Landlord and Tenant Board, then it may be very helpful for the landlord unit owner to receive information and evidence (within the bounds of privacy laws) from the condo to support the landlord unit owner’s case. Generally, if a landlord unit owner can demonstrate that they are taking reasonable steps to address the situation, I recommend the condo holding off on taking its own legal steps beyond initial demand letters and any informal discussions that might take place.

Tenants and the CAT

As discussed above, tenants are not entitled to commence applications against a condo at the CAT. That may change as the CAT’s jurisdiction evolves – at this point, anything is possible with the CAT – but for now that restriction stands. Generally, a landlord unit owner must bring any issue with a tenant to the LTB. There have been situations at the CAT where a tenant has been brought into the application by the condo (as permitted under the Act) or the landlord unit owner, where the tenant’s non-compliance is the problem. So far, the CAT has (as is appropriate) restricted its orders against tenants to governing how the tenant behaves with respect to the condo’s Declaration, By-laws, and Rules. It has not interfered with the relationship between the landlord unit owner and the tenant, and has made it clear that the CAT does not have any jurisdiction to rule on the tenancy itself, and particularly not with respect to termination of the tenancy.

However, as cases continue to be brought to the CAT, likely with more and more complex fact situations, and if rental tenancies in condos continue to increase as is expected, the line between the CAT and the LTB may be pushed by the CAT. It will be interesting to watch how that develops.

The Future of Condo Rentals

Residential rentals in condos increase every year, and this seems unlikely to change. As affordable housing needs also continue to escalate, and housing providers move into the condominium market, that will add even more to the numbers of rental units in condos. Rather than focusing on trying to prevent or limit tenants in condos, which many condos still do, Boards may want to consider ways in which it can improve and build the relationships between the condos and their occupant unit owners, landlord unit owners, and tenants. Then, when the rental numbers inevitably grow, those condos will be better equipped to foster and maintain harmonious communities.

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Stephanie Sutherland, LL.B., ACCI
Cohen Highley LLP