Frustrated Tenancies:

Question:If my Ontario rental unit becomes uninhabitable due to fire, flood, or condemnation, does the tenancy end under frustration of contract and what should I do next?

Answer:If your Ontario residential unit becomes impossible to occupy due to an unforeseeable outside event, such as a major fire, flood or serious water damage, or if the municipality condemns the building, the tenancy can be treated as frustrated and end by operation of law under section 19 of the Residential Tenancies Act, 2006.   In practice, this can mean your usual security of tenure protections may stop, especially where repairs and restoration will take a long time, as reflected in decisions like AS v. CJM, 2010 CanLII 58985 and Y.Y. v. A.T. and L.W., 2013 CanLII 51226.   To protect your rights, document the condition and orders, confirm the legal basis for termination, ask about any limited ability to return if repairs are completed within a reasonable time, and get guidance on available remedies; Olson Craig Legal offers lawyer & paralegal support across Ontario, call (226) 886-2001 for next steps.

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Understanding When the Doctrine of Frustration Applies to a Residential Tenancy and What Recourse Does a Tenant Have?

Certain events, such as a major fire, flood or serious water damage, tornado or windstorm, or some other unforeseen circumstances, including changes in law, may arise with the result being that occupancy of the residential premises becomes impossible.  When the tenancy becomes impossible due to an unforeseeable outside force, sometimes called a force majeure event, the contractual obligations of both the landlord and the tenant, whether during a lease period or after the tenure converts to a month-to-month, are deemed frustrated and the tenancy arrangements come to an end as per section 19 of the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17 where it is said:

Note: Please contact Olson Craig Legal by phone at: (226) 886-2001 to discuss any specific questions that you may have.

Condemnation

Sometimes a rental unit becomes unoccupiable due to an order issued by the local municipality that condemns the premises. This type of situation occurred and was the issue within the case of AS v. CJM, TSL-05808-10 (Re), 2010 CanLII 58985 where it was said:

Accordingly, and apparently, despite that premises may become condemned due to the neglect of the landlord, as a matter of law, frustration of the tenancy agreement, and thereby termination of the tenancy agreement with corresponding termination of the tenancy, results when the premises are officially condemned.

Ceasing of Security of Tenure

Where a tenancy agreement is deemed frustrated, such as in circumstances where a fire requires restorative work that will be extensive and take considerable time, the security of tenure, including first right of refusal to return following restorative work, is absent.  Only where the restorative work can be done in a reasonable amount of time will the tenancy agreement be without frustration and therefore with security of tenure protected as per the case of Y.Y. v. A.T. and L.W., TEL-32649-12 (Re), 2013 CanLII 51226 where it was said:

Summary Comment

An unforeseeable destructive event, often referred to as a force majeure, that renders a rental unit unoccupiable for an unknown length of time, generally, results in a frustration of the tenancy agreement, regardless of whether the event occurs during a lease period or during a month-to-month period. When such an event rises to the level of a frustration, the obligations of both landlord and tenant end and the tenancy arrangement, including the security of tenure, end.