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When condo and landlord/tenant laws clash

Rising condo rentals forcing Ontario to confront competing rules
Monday, July 8, 2013
By Armand Conant

In Ontario, and especially the Greater Toronto Area (GTA), the relationship between landlord/tenant law and condominium law is a growing problem. Simply put, when a condo owner leases their unit to a tenant, two competing communities or legal systems come into play: the Residential Tenancies Act and the Condominium Act.

This problem has arisen because no new rental apartment buildings have been built in Toronto in the last 35 years. Coupled with the explosive growth of condominiums in the GTA (often driven by investor-owners who do not live in their units), this has led to more leased condo units than ever before. Today, in some downtown Toronto buildings, as much as 80 per cent of the units are leased. With more condo projects coming on stream, the number of condo units is only going to increase, as is the number of rented units.

The current Condominium Act is designed to protect condo buyers and owners. It was drafted in the late 1990s and, like all previous condo legislation, was geared to the rights of homeowners; it was not designed as landlord/tenant legislation. So, Ontario has the rights of tenants under landlord/tenant legislation colliding with the rights of owners under condo legislation. For example, the landlord/tenant tribunal has held that a provision in a residential lease that prohibits pets is invalid and unenforceable against the tenant. However, many condominium corporations have provisions in their declaration, bylaws or rules that prohibit pets or place restrictions on the type and size of pets.

The Condominium Act says that owners, residents and tenants must comply with the act and the corporation’s documents (declaration, bylaws and rules). The unit owner also has a duty to ensure their tenant complies. Although the act does not have a clear provision indicating it is paramount over landlord/tenant legislation, the general position taken by the courts is that it is.

Condominium corporations are not landlords, and any rental relationship is between the tenant and individual unit owner. Unfortunately, tenants often misunderstand this and think they have the same rights against the condominium corporation as they have against a landlord. A condominium corporation has the duty to operate, maintain and manage the entire corporation, including its common elements and assets, whereas a landlord has the duty to maintain the individual unit in a state of good repair. This is a critical distinction.

A recent article in the Toronto Star discussed a problem plaguing renters in new condominiums. According to the article and the Federation of Metro Tenants’ Associations (FMTA), condominium units occupied after Nov. 1, 1991, are exempt from rent controls. As a result, some renters have no legal recourse but to move when slapped with hefty rent increases. Tenants’ groups and associations should take this up with the provincial government since any changes must be made through landlord/tenant legislation, not through condominium legislation or amendments to a corporation’s declaration, bylaws or rules.

It’s unclear why landlord/tenant legislation exempted condo units from rent control but given that the exemption was granted 20 years ago, it could be that government did not anticipate the explosive growth of condos or that condos would become the new rental stock, especially in the GTA.

As the Ontario government’s review of the Condominium Act continues, it’s clear everyone is aware of this growing dilemma. However, it can be resolved with cooperative work from all industry stakeholders.

Armand Conant is a partner and head of the condominium law group at Shibley Righton LLP. He is past president of the Canadian Condominium Institute (CCI) Toronto and Area Chapter, and chairman of the joint committee that prepared the legislative brief to the Ontario government regarding the Condominium Act, 1998.

2 thoughts on “When condo and landlord/tenant laws clash

  1. If the Declaration only allows units to be rented to “family units” and an owner, not realizing this, leases a unit to tenants who do not meet the definition. The Tenants want to move in and the condo does not want them as tenants. Who prevails?

    Thanks

  2. In regards to pets does the Condominium Act overrule the city by-laws. Where I live the by-law allows three pets, but the Condo unit where I live allows only two. So who is right? Need answer quick please

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