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Readiness for Occupancy: Requirement That a Rental Unit Be Fit and Habitable
Question: What are a landlord's obligations regarding the habitability of a rental unit?
Answer: Under the Residential Tenancies Act, 2006 (S.O. 2006, Chapter 17), landlords must provide and maintain a rental unit fit for habitation on the move-in date, regardless of any tenant awareness of existing deficiencies. This legal obligation ensures that tenants receive a safe and livable space upon occupancy. If a landlord fails to meet this requirement, they may be liable for remedies such as rent abatement or reimbursement for additional costs incurred by the tenant. For guidance through these legal complexities, consider consulting with Olson Craig Legal Offices, where knowledgeable professionals can assist you in ensuring your rights are protected.
Understanding the Duty to Provide a Habitable Rental Unit That Is Ready for Occupancy
When a landlord and tenant enter into a tenancy agreement while the intended rental unit is the course of construction, renovation, repair, or other readiness preparations, a great risk arises for the landlord. Legally, a landlord and tenant are permitted to negotiate and enter into lease terms in advance of the intended unit being ready; however, complications or delays may result in troublesome difficulties for the landlord whereas section 20 of the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17, prescribes an absolute duty to provide a habitable rental unit on the scheduled occupancy (move-in) date. The Residential Tenancies Act, 2006 specifically states:
Landlord’s Responsibility to Repair
20 (1) A landlord is responsible for providing and maintaining a residential complex, including the rental units in it, in a good state of repair and fit for habitation and for complying with health, safety, housing and maintenance standards.
Same
(2) Subsection (1) applies even if the tenant was aware of a state of non-repair or a contravention of a standard before entering into the tenancy agreement.
Per section 20 (2) as above, the mandate of section 20 (1) applies even if the tenant was aware of the unfit state of repair; and accordingly, even if the tenant knew that the rental unit would be unfit for habitat on move-in day, such as where a status update or other notice was provided to the tenant in advance of the move-in day, the landlord remains obligated to provide the unit in a fit state of repair and the failure to do so is a default upon the landlord. Furthermore, the tenant and landlord are unable to waive or agree to waive, the default whereas section 4 of the the Residential Tenancies Act, 2006 voids any such agreements as may conflict with the Residential Tenancies Act, 2006.
All of the above was deemed so by the Divisional Court within the case of Swan v. Liang, 2019 ONSC 1573, as an Appeal from a Landlord Tenant Board decision and wherein it was said:
[17] The Board made a number of errors of law. First, in its disposal of the application, the Board improperly fixated on the notion that the tenant knew of the deficiencies from his visit on April 4 and failed to consult his wife before entering into the lease. The Board improperly considered the tenant’s knowledge of the state of the unit prior to taking possession. Subsections 20(1) and (2) of the Residential Tenancies Act clearly indicate that the landlord is responsible to ensure that a residence is fit for habitation and in good state of repair from the outset of the tenancy. Subsection 20(2) makes it clear that the landlord is not relieved of this obligation, even if the tenant knows that a state of non-repair exists when the lease is first entered into.
As such, when a landlord enters into a lease with a tenant, even where the tenant may come to know, or even agree, that the rental unit will lack readiness on the move-in date, the obligation upon the landlord to provide a ready and fit unit remains regardless.
Available Remedies
Upon a finding that the landlord failed to meet the obligations to provide a unit fit for habitation as required by section 20 of the Residential Tenancies Act, 2006, the statutorily available remedies are prescribed in section 29 of the Residential Tenancies Act, 2006. The available remedies include an abatement of rent, potentially up to one hundred (100%) percent, as well as reimbursement to the tenant for reasonably necessary expenses incurred by the tenant as a consequence of the lack of readiness of the rental unit such as the cost of temporary accommodations, temporary storage, among other things. Indeed, these were the remedies awarded by the Divisional Court within the Swan case where it was said:
[28] Given the finding that the house was not fit for habitation and the parties’ agreement that the tenancy would be terminated, we are satisfied that the tenant is entitled to the return of his deposit and prepaid rent of $2,175. The landlord agreed that the last month’s rent should be returned. The tenant was unable to use the premises safely pending the repairs (other than storage in the garage, for which he offered to pay $100). The tenant should receive an abatement of the rent for April, given the finding and the clear evidence that the premises were not fit for habitation by the tenant and his family.
[29] In addition, we are satisfied that the tenant is entitled to reimbursement for his hotel cost of $134.47 and utilities of $155.64 paid for this rental unit that he could not occupy, for a total of $290.11 for out-of-pocket expenses. We acknowledge that the tenant was able to store some of his property on the premises for several weeks at a cost of $100, and we take this into consideration in determining the tenant’s entitlement to compensation.
[30] We would not award any amount for the higher rent at the new premises.
Interestingly, per paragraph 30 in the Swan case, the Divisional Court declined to award compensation for the increased cost of a substitute rental unit obtained by Swan.
Summary Comment
When a landlord and tenant enter into a lease agreement in advance of the rental unit being ready for occupancy, the landlord takes on an absolute duty to provide a fit and habitable unit by the agreed upon occupancy (move-in) date. The absolute duty is statutorily imposed upon the landlord and is without any leeway, even if the tenant were to agree to leeway. Of course, a tenant that agrees to provide leeway may indeed forgo the right to pursue the landlord for failure to provide a ready unit; however, such a leeway agreement fails, in law, to negate the duty of the landlord. If the tenant does pursue rights for remedy for the failure of the landlord to provide a ready unit, compensation in various forms may be available including the full abatement of rent paid or due, release from further obligations per the lease, the compensation for reasonably consequential expenses incurred by the tenant, among other things.
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