Landlords are Vulnerable under New Legislation
The Residential Tenancies Act was amended 8 September 2016 to provide a new set of rights to Tenants.
The purpose was intended to provide relief to those who might be victims of domestic violence or abuse. That, of course, is well-intentioned. The difficulty is that the “new rights” are a management issue for Landlords, Property Managers, Mortgagees, their advisors, real estate agents and those entering into an Agreement to buy or sell real estate with a residential tenant.
Briefly, the Amendments permit a Tenant to bring a tenancy to an end upon 28 days notice. That means any tenancy of any kind, no matter what its duration.
The Tenant completes a Form N15, this document is entitled “Tenant’s Notice to End my Tenancy Because of Fear of Sexual or Domestic Violence and Abuse”.
In addition, there is a companion document called “Tenant’s Statement About Sexual or Domestic Violence and Abuse”.
If these documents are delivered to the Landlord, then the Tenant can move out, but if they don’t, then the notice is void. So, the Landlord really can only “wait and see”.
There is no restriction placed on the number of such notices, nor is there any obligation placed upon the Tenant to move out.
The Landlord cannot effectively challenge the documents. They are deemed to be true without any proof and the Landlord and Tenant Board has no right to make any inquiry whatsoever concerning the truth of the allegations. The abuser need not be named.
In addition, there are confidentiality provisions which preclude the Landlord from disclosing this information to anyone, except his advisors. The Landlord cannot enter the unit, inspect the unit, rent the unit, or show the unit. There is a restricted right to advertise the unit, but only if it cannot under any circumstances be identified. So, the Tenant continues to enjoy security of tenure, but the Landlord does not acquire any reciprocal rights. The Landlord must just “wait and see what happens”, and “if they move out, then, they move out”. Obviously, this is a terrible way to run a business.
A breach of confidentiality could result in a fine against the Landlord of $25,000, for an individual or $100,000 for a corporation.
You will also appreciate that under the circumstances it will be difficult to ensure whether the unit is tenanted or not should the property be sold. Again, the “wait and see” rule is the safest course. Nevertheless, it might be wise for the prospective Vendor to have a clause in the Agreement limiting representations concerning tenanted properties.
The legislation certainly takes matters “one step further”, and places additional risks upon Landlords who may themselves find that they are subject to “abuse” by a limited number of very clever, professional tenants.
Brian Madigan LL.B., Broker