Landlord and Tenant Board panel aims to define legal relationships between indirect housing providers, landlords and tenants

January 27th, 2015 by Celia Chandler

Thousands of Ontarians live in affordable housing units provided to them by non-profit organizations but which are owned by private sector landlords. The nature of the legal relationship between these three parties is unsettled: a few cases have addressed it but there has been no consistency in the decisions.  In large measure, the parties have worked around the lack of clarity in the law without the assistance of the Landlord and Tenant Board (the LTB).  The nature of the relationship, however, has come to a head in a couple of cases now before the LTB, both involving Toronto based providers of supportive housing to tenants with mental health disabilities.

In the first of these, the supportive housing provider was taken to the LTB by the private sector landlord who argued that the occupant had substantially interfered with the reasonable enjoyment of the landlord or another tenant.  In her June 19, 2014 decision, LTB Member Mosaheb ruled that the relationship between the private sector property owner and the supportive housing provider was a commercial tenancy, and therefore outside jurisdiction of the LTB.

The supportive housing provider requested a review of Mosabeh’s decision and in an unprecedented move, reflecting the province‑wide importance of this issue, in an interim order dated October 17, 2014, the LTB decided to decide this in a panel of three.

On December 22, 2014, an esteemed panel of three convened.  The panel was made up of:  Executive Chair the Social Justice Tribunals of Ontario cluster, Michael Gottheil; LTB Vice Chair, Eli Fellman; and LTB Vice Chair, Kim Bugby, who also served as panel chair.

Each of the three parties – building owner, supportive housing provider, and occupant  – made submissions to the panel through their legal representatives, all LSUC licencees.  Because the three‑way relationship is not explicitly provided for in the legislation, each party sought to interpret the Residential Tenancies Act to provide the maximum certainty and protections among the parties, as the need for these relationships will surely increase.

The supportive housing provider argued for two separate tenancies – both governed by the Residential Tenancies Act (the RTA).  The tenancy relationship between the building owner and the supportive housing provider would be defined as the “upper tenancy”; and the tenancy relationship between the supportive housing provider and the occupant defined as the “lower tenancy”.  As each would be governed by the RTA, the LTB would hear applications from all parties – from the building owner as landlord to the supportive housing provider; from the supportive housing provider as landlord to the occupant; from the supportive housing provider as tenant to the building owner; and from the occupant  as tenant to the supportive housing provider.

The supportive housing provider argued that while the definitions of tenant and landlord in the RTA do not explicitly allow for this, nor do they preclude it. As a second but much less preferred option, the supportive housing provider representative suggested the panel define the relationship as a subtenancy as allowed under section 97 of the RTA or an assignment under section 95. But he strongly discouraged the panel from adopting the Mosabeh approach of the upper tenancy being a commercial one as an expensive one for the parties without affording the protections to the vulnerable tenant.

Counsel for the occupant argued for the panel to find that the relationship is one RTA tenancy with the building owner and the supportive housing provider being joint landlords, with the relationship between them a contractual one.   With this result, he sees the maximum protection for the vulnerable tenant.

Initially the paralegal representing the building owner chose to take no position, but instead merely highlighted the complexities of the relationship and stressed the need for clarity. When finally pushed, she agreed that the best result would be for her client to have an RTA relationship with the supportive housing provider, with the occupant remaining just an occupant, with, at best: the right to be given notice of RTA proceedings that would affect him/her; standing at a hearing; and the right to raise section 83 issues of fairness.

All parties agreed that the outcome of this case will have implications beyond the parties directly involved.  Indeed, we are aware of at least one other case which is in the LTB pipeline.  In this second case, the supportive housing provider took the building owner to the LTB on a T2 for its treatment of the occupants.  The building had changed ownership and unlike the original owner, the new owner was not keen on having tenants of the supportive housing provider in its building.  The treatment that followed reflected this attitude.  As a preliminary matter, the building owner raised the issue of jurisdiction at the LTB for which the parties currently await a hearing.  The hearing has not yet been scheduled and we can only assume that the delay is due to the wait of the decision from the December 22 panel.

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