Defining a Rental Unit

Oshawa (City) v Municipal Property Assessment Corporation Region 13, 2016 CanLII 65234 (ON ARB)

[21] The positions of the parties can be distilled into four issues or questions with attendant sub-issues:

1. Does the distinction between the residential and multi-residential classes rely on the legal occupancy arrangements within the building? Does the exclusive use, control and occupation of bedrooms make them “units” that are not self-contained?

2. Which is the paramount consideration in defining what is a SCU, the physical layout or the nature of the occupancy, or some combination of both?

3. The statute excludes certain other living arrangements in buildings with more than seven SCUs from being considered multi-residential. Is this justification to similarly exclude the subject student accommodation?

4. What is the ordinary meaning of the phrase “Land used for residential purposes that has seven or more self-contained units” and the word “multi-residential”, in context and having regard to the scheme and object of the provision as the legislators might have intended?

DECISION

1. The distinction between the residential and multi-residential class does not rely on legal occupancy arrangements which divide a building into “units” which are not self-contained. It is the control and occupation by the group of tenants over the whole suite that fits the phrase SCU for the purposes of differentiating between the residential and multi-residential classes.

2. The phrase “…has seven or more self-contained units…” is a physical description. The paramount consideration in defining what is a SCU is the physical layout of the building rather than the choices that owners make in arranging the occupancies within them. I affirm Board case-law that physical capability or potential to be a SCU predominates over the nature of occupancy arrangements.

3. The fact that there are defined exclusions from the multi-residential class in the statute based on certain legal occupancy structures is good reason not to exclude the subject student occupancy arrangement, on the grounds that had the legislature so intended, that arrangement would also have been excluded by the regulation.

4. The 133 suites in the subject building fall within the ordinary meanings of the phrases “self-contained units” and “multi-residential.” I conclude that the legislature could not have intended that a building like the subject contains zero SCUs, but intended for this structure housing 588 persons to be defined and assessed as multi-residential.

Kong v Hamilton Fire Department, 2016 CanLII 102466 (ON FSC)

27. The criteria for collective decision-making that have been cited in Good v. Waterloo and subsequent cases address the characteristics of a housekeeping unit, which is one of the pre-requisites cited by the Fire Code to identify a dwelling unit. These criteria have included occupants who lease premises as a group, arrange rent as a single amount, have responsibility for selecting replacement tenants in the event of the departure of an individual, determine their own room assignments, pay for utilities independent of the landlord, provide their own furnishings, take responsibility for housekeeping and cleaning, perform as a cohesive group through occupation over lengthy periods of time, store and consume food together and who enter into relationships that extend outside the sharing of accommodation and school activities. The criteria also include the absence of presence and control by the landlord or the landlord’s representative.

Good v. Waterloo (City), 2004 CanLII 23037 (ON CA)

[3] The motions judge correctly addressed the critical phrase to be interpreted, namely whether the premises in question are a "single housekeeping unit". He used as an important interpretive criterion whether there was collective decision- making sufficient to create a single unit for housekeeping purposes. We agree this is an appropriate criterion.

[4] In this case, there was ample evidence to support his decision that there was sufficient collective decision-making to meet this criterion, including:

(a) how the rent was paid;

(b) the furnishing of the apartment and rooms by the occupants;

(c) payment of the utilities by the occupants;

(d) the assignment of the rooms by the occupants; and

(e) how the housekeeping, or lack of it, was to be done.

[5] The cohesiveness of this unit is further exemplified by the fact that most of the occupants had occupied the premises for lengthy periods of time.

[6] There was also ample evidence on which the motions judge could conclude that this was not a circumstance in which there was exclusive possession of any parts of the unit.

Good v. Waterloo (City), 2003 CanLII 14229 (ON SC)

[23] In my view, the distinguishing characteristic as between a lodging house and a residential unit focuses on the control of the premises. The label currently attached, a lease, is of little importance as such may, in some cases, simply be a method to disguise the true purpose and use.

[24] Control, in a lodging house, is by the owner and the occupants on an individual basis, whereas in a residential unit it is by the group. Accordingly, for a residential unit there must be evidence of collective decision-making regarding the use of the premises.

[28] The existence of locks on bedroom doors is not a factor. The evidence indicates the occupants have used locks without the applicant's permission although I am certain they were aware of their existence. To suggest the use of locks creates exclusive possession contrary to para. 2.4(d) of the by-law is not appropriate. This is not the operative part of para. 2.4(d). Further, the use of locks, in my view, merely denotes privacy and security.

[29] Payment of rent individually is now a common practice in residential leases, particularly involving students. It avoids the need of a communal bank account.

[31] If this was a lodging house, there would be significant control of the premises and the use of the premises by the applicant. There was no evidence to support this argument.

[32] In result, I am satisfied the evidence presented on this application indicates the actual use of the premises is as residential units within the meaning of para. 2.4 of By-law No. 00-140 and, accordingly, the application is granted.

Kritz v City of Guelph, 2016 ONSC 6783 (CanLII)

[53] With respect to the City’s argument that certain rights of tenants under the RTA (including security of tenure) are “conferred upon tenants individually and cannot be displaced or circumvented by a group lease” and “while a group may commence a tenancy together, they [i.e. each member of the group] retain individual rights under the RTA and the landlord must deal with each tenant as an individual”, Mr. Kritz points out a recent decision of the Ontario Landlord and Tenant Board, as reflected in D.S. v. R.T., SOT-68533-16-RV, 2016 CanLII 44359 (Ont. L.T.B.), at paras. 6-10. There, the Board upheld an earlier decision that had determined that one tenant could unilaterally terminate a joint tenancy without the consent (or even the knowledge) of his/her co-tenant.

[...]

[57] In Balmoral, at paras. 82-90, Healey J. went on to summarize the line of cases following Good v. Waterloo (City), in contrast to Windfields, as follows:

...

86 I reach the opposite conclusion from Howden J. with respect to the applicability of the criterion used in Good, Bentolila and St. Catharines to a zoning issue, particularly given the impossibility of using his analysis to determine “single household unit” due to the confused state of the definitions in the Orillia zoning by-law, as explained earlier. I find the criteria applied in the above cases to be helpful in determining the issue of whether or not a single household unit as used in the Orillia zoning by-law includes the kind of arrangement that would qualify as a boarding house. A household is a factor in determining what is a dwelling unit, but is a different thing than a dwelling unit, the former being produced by behaviour and the latter being a product of use, building form and measurement. The words “living together” within the definition of dwelling unit implies not a static state, but rather a state in which the occupant’s conduct defines the extent to which the individuals are together and living as a single unit. As such it is helpful to look at the objective indicators of behaviour in determining whether a single household unit exists.

87 In Good, the application judge made the following factual findings:

a. There was one lease signed by all of the occupants,

b. Several occupants would leave during the lease period and were responsible for arranging for a sublet of their tenancy,

c. Rent was paid by the occupants individually by post-dated cheques,

d. The utilities were equally split among the occupants,

e. The housekeeping of the interior of the unit was the responsibility of the occupants, while the landlord was responsible for the exterior upkeep,

f. Furniture was supplied by the occupants,

g. Bedroom allocation was determined by the occupants,

h. The occupants all used the living room to entertain guests, watch television and perform other activities,

i. The bedrooms had locks on their doors.

[58] Again, putting the by-law terms and definitions into one paragraph, the definition of a lodging house is: Any building or structure, including but not limited to a room or group of rooms occupied or designed to be occupied exclusively as an independent and separate self-contained housekeeping unit including a house, that is used to provide 5 or more rooms used to provide living accommodation which does not have the exclusive use of both a kitchen and a bathroom.

[59] Looking at this definition and the facts as agreed, I cannot see the difference between a “lodging house” when rented to a single group of five or more students, as we have in this agreed fact situation, and a dwelling unit rented to a family of five or more adults. I find on these facts, that the “dwelling unit” is the house (or that part of 111 Maple) that is being rented by the group and not a “room” being rented by one person.

[60] On these particular facts, there is no “different form of accommodation with a significantly higher density than a single detached dwelling”. There are “no different impacts on the surrounding neighborhood”.

[61] On these facts as agreed, “the function, use, size, scale and impact of a [such a residence is not] distinct from a single detached dwelling”.

[66] In any event, on both analyses, I find that the use of the lands are as one dwelling unit and not five or more lodging units. The tenants here are renting a “group of rooms” and are occupying them “exclusively as an independent and separate self-contained housekeeping unit”. Each of the tenants in question in this application is not renting “a room”.

[67] Following the case law and applying these agreed upon facts:

(a) Mr. Kritz did not create the group. Each group of tenants had pre-existing friendships at the time they approached Mr. Kritz as prospective tenants. This is inconsistent with each individual dealing with Mr. Kritz with respect to one room. In case it is necessary to put an issue to rest, this agreed fact is inconsistent with any suggestion that Mr. Kritz is setting up a sham residence to hide a lodging house.

(b) Each of the properties was rented as a single unit to that group. For each property, a single lease was signed by a single group. The tenancy agreements provided that each tenant is jointly liable for the total rent payable for the entire dwelling unit. Notice by one or more tenants is sufficient to terminate the tenancy of all tenants. In a lodging house situation, it is unlikely that one person would sign such a lease with a group of strangers. Here, the collective signed as one unit.

(c) The lease for each property is one year in duration. This is not the short term rental considered in the case law.

(d) Each group of tenants has full access to and control over the entire unit and there is no “exclusive possession” by any single tenant. The bedroom doors do not have key-locks. Again, this is not consistent with the rental of a single room.

(e) The tenants determine who occupies each bedroom and how to occupy the unit generally. This is consistent with the rental of the entire unit and inconsistent with renting a room.

(f) The tenants are responsible for cleaning the dwelling unit. The tenants are also responsible for keeping the stairways, walkways, driveway and parking space(s) clear of ice and snow, and for replacing light bulbs. This could only be done with collective decision making in a residence functioning as a single dwelling unit rather than a group of separate roomers.

(g) Mr. Kritz provides a stove and refrigerator for the use of the tenants of each property. The tenants are otherwise responsible for furnishing the dwelling unit. A lodger might provide his or her own bedroom furniture; only a collective would be able to furnish the balance of the residence.

Residential Tenancies Act, 2006

12.1 (1) Every tenancy agreement that is entered into in respect of a tenancy of a prescribed class on or after the date prescribed for that class of tenancies shall comply with the following requirements:

1. The tenancy agreement shall be in the form prescribed for that class of tenancies.

2. The tenancy agreement shall comply with the requirements prescribed for that class of tenancies. 2017, c. 13, s. 5.

13 (1) The term or period of a tenancy begins on the day the tenant is entitled to occupy the rental unit under the tenancy agreement.

O. Reg. 9/18: TENANCY AGREEMENTS FOR TENANCIES OF A PRESCRIBED CLASS

Prescribed date

2. For the purposes of subsection 12.1 (1) of the Act, the prescribed date for the prescribed class of tenancies described in paragraph 1 of section 1 of this Regulation is April 30, 2018.

Prescribed form of tenancy agreement

3. For the purposes of paragraph 1 of subsection 12.1 (1) of the Act, the prescribed form of tenancy agreement for the prescribed class of tenancies described in paragraph 1 of section 1 of this Regulation is,

1. the form in English entitled “Residential Tenancy Agreement (Standard Form of Lease)”, dated 2018/01 and available on the website of the Government of Ontario Central Forms Repository, or

2. the form in French entitled “Convention de location à usage d’habitation (Bail standard)”, dated 2018/01 and available on the website of the Government of Ontario Central Forms Repository.