On May 14, the Province of Ontario announced it will be rolling out a 3-phased approach to reopening the economy. For multi-res operations, how will the uncharted journey unfold?
To date, no two provinces’ relaunch plans have looked exactly alike, and as one of the two hardest-hit provinces in Canada, Ontario’s restrictions have been slower to lift. With the state of emergency now extended to June 2, Premier Ford says progressing to the next stage will be based on a range of criteria, including a consistent two-to-four-week decrease in the number of new daily COVID-19 cases. In other words, all businesses preparing to resume operations must be diligent about following strict health and safety guidelines, and remain focused on making risk mitigation the top priority.
To steer reopening businesses in the right direction, each phase of Ontario’s plan is accompanied with multiple documents related to protecting the health and safety of workers. But for multi-res operations, it’s not just workers who are potentially facing exposure – it is each and every resident and visitor who steps foot onto the property.
“The clear risk of reopening multi-res operations is that regardless of whether the recommended regulatory and suggested protocols are followed, if a worker, resident or visitor to the building contracts COVID-19, the landlord will likely be the target of a lawsuit alleging that he or she was at fault and therefore liable for damages,” warns Joe Hoffer, Cohen Highley LPP. “That being said, there are steps that can be taken to avoid this outcome.”
For starters, Hoffer can’t stress enough the importance of following the recommended protocols for each component of the 3-phased reopening.
“The province has created over 90 documents setting out detailed health and safety protocols to be followed in relation to the permitted activities,” he says. “The onus will be on landlords to research those documents; accurately determine which protocols apply to which activity; ensure the protocols are communicated to workers and occupants at buildings; and, ensure that there is compliance by workers and residents with those protocols…leaving a paper trail at each step to lay the groundwork for a defence in future potential legal action.”
Naturally, it’s the smaller landlords with limited resources and those unpracticed at risk mitigation who will have a harder time adjusting to the “new normal.” Hoffer advises anyone in this situation to step up their efforts immediately.
“This can be done by designating staff members to develop and implement COVID-19 compliant reopening policies – including staff training – which are key components of a risk mitigation process. In turn, everything should be rigorously documented,” he says.
Managing staff, worker and resident compliance in multi-res operations
Another challenge for multi-residential building operators will stem from gaining compliance from workers, staff, residents and visitors in terms of their commitment to following health and safety protocols. As part of Ontario’s proposed Phase 1, workers will be permitted to re-engage in multi-residential construction, maintenance and repair, painting, cleaning and pool maintenance.
“Landlords have a legal right to exercise a level of control over employees and contractors,” Hoffer says. “So that challenge should be manageable. The greater challenge will come with managing compliance by residents and occupants. Landlords have far less control over tenants than they do over workers.”
To address this, Hoffer advises landlords who use the standard industry lease (or other professionally drawn leases) to introduce new rules that set out the protocols tenants and their households must follow during the reopening process. “Such rules would direct compliance with social distancing relative to each other and employees; contractors; delivery personnel; and visitors, among other things,” he says, pointing out that many such rules are effectively in place now, although not necessarily formalized as a term of the tenancy agreement under the “Rules and Regulations” section.
Where a more formal approach will likely be required pertains to usage of amenity spaces. As Ontario moves to allow more common areas to reopen—i.e. pools, patios, fitness centres and party rooms—tenants may not only expect, but demand, the right to regain access, exposing landlords to rent reduction applications if they fail to make them available. At present, the risks of exposure to COVID-19 have warranted the temporary closure of these shared facilities, but as restrictions lift, landlords will be on the hook to make them available while still keeping occupants safe from the threat of disease.
Balancing the risks
Assuming authorization is given in the near-term for the reopening of swimming pools and other shared facilities, how will landlords balance the risks of liability and potential rent reduction applications?
“In our view,” says Hoffer, “landlords will be faced with a grim challenge. The liability risk of reopening arises when there is a failure by tenants to comply with protocols and an inability of the landlord to constantly monitor and take action against those who breach them. At this time, a landlord’s primary responsibility to enforce strict safety protocols arises upon receipt of very specific complaints of incidents of breach where the detail is sufficient to generate an N5. With re-opening, there should not be a greater onus on landlords to ensure tenants are following the rules, but there may be an expectation that the landlord do so.”
The key, says Hoffer, is to create clear rules in the tenancy agreements requiring compliance by residents, their households and guests at each stage of any reopening. Some internal physical changes and time of use/occupancy restrictions will likely be necessary, as will enhancements to cleaning protocols.
“Include a requirement that tenants using the reopened facilities must sign a waiver agreeing to the posted protocols and that they assume the risks inherent in the use of the facility,” he says. “This will release the landlord from liability in the event that a person becomes ill and alleges the illness resulted from landlord negligence regarding safety protocols.”
There is no doubt that the new normal multi-res operations are about to encounter will come with substantial administrative burdens. Similar to the government, Hoffer says landlords must turn their minds to the implementation of measures that are designed to protect the health and safety of all persons at their buildings.
“The establishment of clear rules for health and safety and the implementation of protocols together with the use of waivers provide mechanisms for mitigating risk,” he says. “If you require legal assistance in developing an appropriate set of COVID-19 policies, our legal team can help; otherwise, we wish you all the best with risk management and surviving the “new normal.”
For more information, visit: http://cohenhighley.com/lawyers/joe-hoffer/