Tuesday, 19 March 2013

Agreement to Terminate a Tenancy--Ending a Lease Early

This week I seem to be getting a recurring question about terminating a lease early.  A few people (tenants) have asked how they can get out of their fixed term leases.  The leases I have been asked about are all one year leases with more than six months remaining in the term.  What can a tenant do if they are no longer able to remain in the unit?

Before you get to the standard answers of subletting and assigning it is worthwhile to approach the landlord and set out the problem and the need to vacate the rental unit.  A landlord's reaction may indeed be helpful and the landlord might agree to let you out of your lease early.  Some reasons why they might agree: 1) A higher rent could be obtained from a new tenant, 2) Renovation plans, 3) Getting a new longer lease committment from a new tenant, 4) and just possibly--the landlord is kind hearted and willing to help out.

How might a landlord agree to early termination?  The terms of negotiating a termination will need to address the interests of both Landlord and Tenant.   The Landlord's interests include not losing rental income and having a quality tenant in the unit (and not some crazy subletter that upsets the whole building etc.).  The Tenant's interests include ending the lease as soon as possible, identifiying the extent of the future rent liability, and avoiding litigation with the landlord.

These interests can often be adequately addressed by working out a notice period notwithstanding the fixed term nature of the lease.  A landlord may very well agree to let a tenant out of a fixed term lease on 60 days notice with the proviso that if the unit is re-rented early then the rent obligation would cease.  A tenant may agree to 60 days--more or less--in exchange for liability being capped at that amount.   Whether the time period agreed to is 60 days, 30 days, or any period more or less, will be informed by the ease with which the rental unit can be re-rented.   If there are lots of prospective tenants looking the notice period will be shorter and if the rental market is weak then one could expect the time period to be longer.

The main point that I'm making here is that there is nothing in the Residential Tenancies Act that prevents a landlord and tenant from agreeing to terminate a fixed term lease sooner and on terms that are satisfactory to them.  Perhaps the only caveat would be that the agreement could not be more severe than the lease obligation being terminated.

If a landlord and tenant agree to terminate a fixed term tenancy sooner, or indeed if they agree to terminate any tenancy, including a month to month tenancy, on terms that are less than those required by the Residential Tenancies Act, that agreement should be done in writinng.   The Ontario Landlord and Tenant Board provides landlords and tenants with a Form to record the agreement.  That Form is Form N11.  While it is not an absolute requirement that this Form is used, it is highly recommended that parties make use of the Form as this form incorporates the necessary elements of an agreement and the form represents a clear expression of the intentions of the parties.

Michael K. E. Thiele
Lawyer
QTMG LLP
Ottawa, Ontario, Canada

Sunday, 17 March 2013

Wear & Tear in a Damaged Apartment--How much can the landlord charge?

At the beginning of every tenancy a landlord should be going through the empty rental unit with the new tenant with a checklist.  This checklist, that the tenant will be required to sign, is part of the move in inspection.  Along with the checklist, a few digital photos stored on a cheap memory stick showing the condition of the floors, walls, bathroom, kitchen, etc., are also good to have.  The checklist, along with the photos, establish a baseline of the condition of the premises that the tenant received when they moved in.

Why is this important?  It is absolutely necessary for a landlord to be able to establish the condition of an apartment when a tenant moved in because the tenant is only responsible, in law, for any damage or excess wear and tear of the rental unit caused by them.  If a landlord is unable to establish what condition the tenant received the unit in--then it becomes very difficult for the landlord to establish that the tenant caused any damage at all.  It is not uncommon for tenants to defend a landlord's claim for damage or excess wear and tear by stating that the unit was run down and that things in the unit were already damaged.  The move in inspection, the checklist, and the photographs takes this argument away from a tenant.

So, presuming that there is good and clear evidence of the condition of an apartment at the time the tenant moved in--what is the tenant's obligation as to maintaining the condition of the apartment and the things in it?  The Residential Tenancies Act requires that the tenant maintain the premises to a standard of ordinary cleanliness (as per section 33 RTA).

Is there a duty on the tenant to maintain and perform minor repairs in the apartment?  In short, the answer is not really.  The duty to maintain the apartment (repairs etc.) is imposed on the landlord in section 20 of the RTA.  It is fair to say that there is no ambiguity in the law about who is responsible for maintaining a residential rental property in Ontario---it is entirely the Landlord!  A landlord can not avoid the obligations imposed by these sections of the RTA by including contractual language in the Lease that shifts the maintenance obligation to the tenant.  I have seen a number of leases where clauses are inserted saying the tenant is responsible for minor repairs under a certain dollar amount, is responsible to change lightbulbs, leaking taps, plumbing back up (i.e. they must call and pay for a plumber).  If there ever was any question if these types of responsibility shifting clauses are legally effective the question, I think, was settled in Montgomery v. Van where the Court of Appeal makes it clear that shifting the responsibility for maintenance to the tenant--in the lease itself---is illegal and void.

What then does the law say the tenant is responsible for?  That answer is found in section 34 of the Residential Tenancies Act which provides that a tenant is responsible for the repair of undue damage to the rental unit and the complex whether caused wilfully or negligently by the tenant, occupant, or other person permitted by the tenant to be in the residential complex.

The phrase "undue damage" appears repeatedly in the Residential Tenancies Act in various sections.  Unfortunately, no where in the RTA is the phrase defined.  As there is no definition in the Residential Tenancies Act we can take a look at Board case law, Court case law, as well as dictionary definition of the common meaning of the words that make up the phrase.    If you go through the process of trying to find a clear and static definition of the phrase you will be disappointed.  In my experience, the meaning of "undue damage" is determined by looking at the facts of the particular situation in context.

Clearly, the phrase undue damage incorporates the notion of what we understand to be "wear and tear".    Undue damage, by definition, allows for the tenant to cause some damage to the rental unit for which s/he would not be responsible.   Where along the spectrum/range of zero damage to complete destruction does the liability for damage arise?

In my experience, a specific answer can not be provided without looking at a specific question.  The best answer you can get, on a general basis is that reasonable wear and tear does not impose liability on a tenant for the repair of the item.  On a specific basis, you need to ask the question with regard to a specific damaged item.  For example, a hardwood floor, newly installed at the time that the tenant moved in, that was onsite finished by the flooring company, has been scratched by the claws of two medium sized dogs.  The floor needs to be completely refinished notwithstanding that it was only installed one year ago.  Is the tenant liable for the cost of refinishing?

The argument for the tenant is that the dogs are permitted to be in the premises by law.  There is nothing unusual about the dogs, they didn't disturb anyone, they were groomed regularly and claws clipped as needed by a professional dog groomer.  Other than getting rid of the dogs, what else was the tenant to do?

The argument for the landlord is that the floor was brand new.  The Regulations to the Residential Tenancies Act recognize that the finish on a hardwood floor is supposed to last 20 years (see schedule to regulations setting out useful life of things here).  The flooring is so scratched that the finish has gone hazy white.  The tenant, while lawfully entitled to have pets, bears the responsibility for the damage caused by the pets.  The right to have pets does not mean that there is the right to have the pets cause damage for which the tenant is not liable.

In contrasting the two positions I hope that you can see that the issue is one of reasonableness using certain known parameters such as useful life and normal and intended use.  That same floor, if severely scratched over 15 years, would likely transfer no liability for refinishing on the tenant in the same way that a few small scratches on the floor, even after only a year, would also not attract liability.  A landlord has to expect that a rental unit and the things inside it will be used and "used up" over time.

Once you decide that there is liability for a repair (i.e. there is "undue damage") the next question is what should the tenant pay.  Should the tenant pay for 100% of the costs to refinish the hardwood floor?  A reason the tenant should not pay for 100% of the floor may be that the landlord already got a number of years of the useful life out of the floor.  If the landlord already got a number of useful years out of the floor why should the tenant be expected to pay for a new floor that gives the landlord 20 years of useful life?  Put another way, what was the value of the floor that the tenant damaged.  Doesn't fairness dictate that the tenant only needs to pay to give the landlord a floor with the same number of useful years left on it that was damaged and not a 20 year floor?

A landlord should not expect that the Landlord and Tenant Board will order a tenant to pay for 100% of a brand new anything if the landlord ends up with something better than what they started out with.  With respect to repairs to items one can expect closer to getting 100% of the cost if the work essentially puts the landlord back into the position they were in.  For example--the costs of patching, sanding, and painting over holes that have been punched in the wall are likely to be reimbursed at 100% of the expense.

In my experience, contested litigation over damage caused by a tenant is rarely cut and dried.  Items in a unit were rarely in perfect condition at the commencement of a tenancy and there is always the fact that a degree of damage is expected (and exempted under the legislation) as the items in an apartment get used up over time.  When deciding whether to pursue a claim at the Landlord and Tenant Board, Small Claims Court or for claims over $25K in the Superior Court of Justice, a landlord should look very carefully at the nature of the damages and think about current values, useful life, replacement costs, and reasonable wear and tear.  Just because it costs a bundle to fix or repair something does not mean that the Board or the Court is going to make the tenant pay.

Michael K. E. Thiele
Lawyer
Quinn Thiele Mineault Grodzki LLP
Ottawa, Ontario, Canada
www.pqtlaw.com


Wednesday, 13 March 2013

TENANT'S STUFF LEFT BEHIND

After a tenant has left a rental unit most landlords find themselves at the door of the unit wondering what will greet them on the other side of the door.  Will the place be a disaster?  Will it look just like the day the tenant moved in?  The fact is that you never quite know how a tenant will leave a unit when they move out.  This blog, today, is about finding stuff, personal effects, property--from couches, to clothing, to picture albums, to junky things that belong to the tenant that left.  What do you--as the landlord--do with these things?

What to do with these items is a common question.  The answer is a little more complicated than you might imagine---and the ultimate answer is a whole lot less satisfying than what you would like.  To begin answering this question you need to consider how you regained possession of the rental unit from the tenant.  It makes a difference.

If you regained vacant possession of the rental unit from the tenant based on a notice of termination, an agreement to terminate, ending a super's employment, or an Order of the Board terminating the tenancy---then in accordance with section 41 of the Residential Tenancies Act the landlord may sell, retain for their use, or otherwise dispose of the property that was left behind in the rental unit.  According to this section of the RTA, there is no waiting period, there is no obligation to keep anything for the tenant.  You can simply do what you like with the stuff left behind.  Most of the time this means throwing it in the garbage.

If, however, you regained vacant possession of the rental unit as a result of enforcing an eviction Order through the Court Enforcement Office (i.e. the Sheriff), then the rules are different.  The applicable section of the Residential Tenancies Act is still section 41 but now you are under section 41(2) & (3) which states that you must make the tenant's property available to them for a period of 72 hours at the property or a location close to the rental unit.  The hours between which you must make the property available to the tenant is between 8:00 a.m. and 8:00 p.m.  If you are looking for the legal basis for these hours you will find them set out in O.Reg 516/06 section 46.

After the expiration of the 72 hours section 41 seems to suggest that a landlord may sell, retain, or otherwise dispose of the tenant's property.

If, as the landlord, you fail to make the property available to a tenant or you make it difficult or impossible for the tenant to contact you to make arrangements to retrieve the property, then you could face an application to the Landlord and Tenant Board by the tenant for the costs of replacing the property, returning the property, repairing the property, out of pocket expenses, and anything else that the Board considers fair.

Other circumstances in which a landlord may be left dealing with a tenant's property is in the case of the death of the tenant and there being no other occupants.  The Residential Tenancies Act has specific provision for such circumstances in section 92 of the Act.  In summary, the RTA allows a landlord to dispose of unsafe or unhygienic items immediately.  For the other property, the Act provides that the landlord may dipose of the property of the tenant who has died after the deemed termination of the tenancy as set out in section 91---i.e. the tenancy is deemed terminated 30 days after the tenants death.

Again, with respect to disposing of the property of tenants, the Act may be seen as providing a very clear cut set of rights and obligations.  In my experience it is best to remember that following the strict letter of the law will win you few favours and in fact a Court may still go out of its way to compensate a tenant (at the landlord's expense) if the landlord's behaviour is not reasonable---notwithstanding that it is technically legal under the RTA.  A simple example of what I mean is as follows.  Imagine a tenant, retired gentlemant, rent always paid on time.  He passes away in his unit.  He has no family in the country, close relatives have pre-deceased him.  Following his death it has taken a few weeks for next of kin to be located.  Turns out they live some where in the USA.  They can't come to Canada to deal with the estate for a couple of weeks.  By the time they get here it will be 7 weeks post death (well after the time period set out in the RTA allowing a landlord to dispose of the deceased's property).  Going through the rental unit you find a well appointed unit, valuable property and generaly nice things.  It would be very risky, under these circumstances, for a Landlord to simply dispose of the deceased's property.  No Court would condone such behaviour as it is quite likely that the estate would have voluntarily paid additional rent until the executors managed to get organized.

Please note that in the case of the death of a tenant, the RTA further considers the obligations of a landlord in disposing of property and a duty to compensate or return property that has been retained in section 92(3)&(4).

SUMMARY

In all dealings with a tenant's personal property--whether abandoned, left behind because a sheriff enforced eviction, or because of the death of the tenant, the provisions of the RTA should be considered, to be a safe but minimum guideline to be adhered to by the landlord.  Sometimes this will be difficult as the tenant was removed from the property under trying circumstances.  Nevertheless, a Landlord who disposes of valuable property--especially sentimental property like wedding albums, baby pictures, movies, heirlooms and other irreplaceable items---risks a significant damages award against them by the Court.

While the RTA provides protection to a landlord disposing of ordinary property, junky stuff, under "normal" circumstances, the protection provided by the Act will still be judged against a standard of behaviour based on the common decency scale.

Michael K. E. Thiele
Lawyer
Quinn Thiele Mineault Grodzki LLP
Ottawa, Ontario

Saturday, 9 March 2013

Evicting the Noisy Tenant (PART 2)

Back in October 2012 I wrote a blog respecting the legal process to follow to evict a tenant who was making too much noise.  As all landlords discover, a noisy tenant creates many problems for the other tenants in the building.  Other tenants can't sleep, can't have guests over, and they simply lack the ability to reasonably enjoy their rental unit when the noisy neighbour continuously disrupts them.

In time, the noisy tenant causes "good" tenants to give their notice to leave the building or alternatively the "good" tenants start with-holding rent and demanding rent abatements until the noisy tenant is dealt with.  Regardless of how they deal with it--the fact is that the noisy tenant over time will cost a landlord rental revenue and increase expenses associated with the turn-over of rental units.

This blog continues on from the technical perspective first outlines in the October 2012 blog.  If you are reading this, it is worthwhile to go back and read the October blog as this blog is a continuation of what is described in it.  The October blog is still current and accurately reflects the law in Ontario to the present date.

As a background, let us assume that you have a tenant who simply can not turn the stereo down.  Everyday, every night, the booming base speaker vibrates through the building disturbing other tenants.  The stereo seems to never be turned off before 1:00 a.m..  Your other tenants have complained about this repeatedly and continuously.  As a consequence, you served a Form N5--Notice of Termination, on the tenant.  That form, from the Ontario Landlord and Tenant Board is located here.

The Form N5 (termination of a tenancy for substantial interference with reasonable enjoyment--i.e. through noise, behaviour etc.), is by its nature a voidable notice.  This means that a tenant, who receives a notice of termination for noise, behaviour etc., in Form N5 is given an opportunity to correct their behaviour and not be evicted.  To be clear, this is not about a Landlord being "nice" and giving the tenant another chance.  The law requires the landlord to give the tenant this chance as the Form N5 is structured this way in the legislation.  Unless you can find another Notice of Termination that fits the conduct complained of--you are stuck giving the tenant a second chance through the form N5.

The second chance takes the form of the tenant stopping the behaviour complained of.  In our example, on the service of the Form N5 the tenant has 7 days from the date of service of the Notice to stop playing the stereo so loudly as to disturb the other tenants.  In practical terms--this means that starting on the day after the service of the Notice of Termination the tenant is required to not make noise that is disturbing.

You may wonder what happens if a tenant stops playing the stereo (hence stops the conduct complained of) but instead starts singing at the top of their lungs such that it can be heard throughout the building in the seven day period following the service of the First N5--Notice of Termination.  The short answer is that the Notice of Termination is most likely NOT voided if the tenant replaces one noise making activity with another.  The point of the first N5 is to not only stop the stereo music but also to stop disturbing the neighbours with undue noise of any kind.  To this end, it is worthwhile to draft the details section of the N5 in a broad way so as to encompass more than just "stereo noise".

The October blog presumed a situation where the tenant did not comply with the first N5 notice.  As such, the landlord was able to apply to the Landlord and Tenant Board in FORM L2 based on the first N5 notice.

However, for the purposes of this blog, what happens if the tenant does indeed stop making noise?  Let us assume that by a strange coincidence that on the morning you served the FIRST form N5 that the tenant was getting on a plane to go away for a two week vacation.  The tenant's rental unit was locked and empty for two weeks--no music, no noise whatsoever.  

The effect of the tenant being away on vacation is that the First N5 Notice has voided because the tenant has corrected the behaviour (i.e. stopped making noise that is bothering other tenants).  This means that the tenant can not be evicted for the stereo noise that s/he has been making on a regular basis.

As the landlord, after service of the first N5 you will have checked with neighbouring tenants to determine whether the tenant has complied with the Notice of Termination.  Maybe, based on the lack of complaints and happy neighbouring tenants you form the opinion that the first N5 worked and the problem is solved though unbeknownst to you the problem stopped not because of the N5 but because of the vacation.

Even though the first N5 has voided (by the tenant stopping the noise), this does not mean that you should throw it out.  The voided first N5 still has value for six months as the basis to serve a Second N5 Notice.

WHAT IS A SECOND N5 Notice?

It is the exact same form as the first N5 Notice.  However, on the second page of the Notice you will see a different box to tick off indicating that the Notice is a second and not first Notice.  There are a few  important differences between a first and second N5 even though they are served using the same form.  A second N5 contains a shorter termination date--it only needs to be 14 days whereas the first N5 required a 20 day notice.  Also, the second N5 is NOT voidable.  This means that a tenant can not correct the by complying (i.e. stopping the behaviour complained of).

So, using our fact scenario, let us assume that the tenant returned from vacation after two weeks.  While s/he noticed the N5 under the door of the unit, s/he didn't seem to be too concerned.  That night, the stereo was cranked up again until 3 in the morning disturbing all of the neighbouring tenants.  All of the tenants who has been enjoying the tranquility caused by the noisy tenant's vacation call you the next morning to complain.

What you need to do is to collect evidence and statements from neighbouring tenants about how they are disturbed.  You need the Who, Where, Why, What, When and How of the nature of the disturbance.  Presuming that the incident is substantial and not just a trifling matter, you would then fill out a second N5 form, inserting all of the required information in the blank spots along with the precise details of the problem.

Because the second N5 is not voidable, you should only fill it out if you intend to seek termination and eviction of the tenant.  Otherwise there is no point or benefit in filling out the form.  At the same time, you should fill out the Application Form--which for an application based on N5's is Form L2.

THE HEARING PROCESS

Once the second N5 is served on the tenant, you will be taking a copy of the first N5, along with a certificate of service proving how the first N5 was served, along with a copy of the second N5 and the certificate of service proving how it was served, along with a complete form L2 to the local office of the Ontario Landlord and Tenant Board.  If you live in a region that does not have a Board office you may wish to contact a Service Ontario office to file the application through them.

At the Landlord and Tenant Board you would provide the clerk with a copy of all of the above noted documents.  The clerk takes the documents and scans them all.  Upon payment of the $170 fee, the clerk will issue a Notice of Hearing and return a stamped an issued L2 application to you.  At the present time the clerk will still be giving you two copies of the documents--one for your records and one for you to serve on the tenant. Please make sure to retain copies of the N5's as the clerk will not be returning any N5's to you--the ones you file will be retained in the Board file.  You will need copies of the N5's for the hearing.

THE ACTUAL HEARING

On the scheduled date of the hearing you will attend the Board to present your case.  It is important to realize that this is a serious matter requiring you to meet a burden of proof on a balance of probabilities. Notwithstanding the informal nature of the proceedings, the consequences of your application are serious.  Hence the Board will expect you to present evidence that is clear, cogent, and compelling.  This means that you should be prepared to call witness to testify about the incidents you described in the first N5 as well as the second N5.  Letters from tenants, affidavits, or voicemail messages are generally insufficient to meet the burden of proof.  You need to have live witnesses who can explain what they experienced and who are available to be cross examined.  

If you attend a hearing without proper witnesses and the tenant attends and takes issue with your application you can reasonably expect to lose.  If the tenant testifies that she keeps the stereo at a reasonable level--that she has spoken with all of the neighbours and they have all told her there is no problem---then your case dissolves into nothing if you don't have a witness from the building present to explain that there is indeed a serious problem with noise from the noisy tenant.

DO YOU WIN?

Even if you prove all of the elements of the N5's and establish that the neighbours were indeed bothered by the noisy tenant you need to be ready for the possibility that the adjudicator will give the tenant another chance.  This is known as relief from forfeiture under section 83 of the Act.  You should read, another blog in this series entitled BEATING THE SLAM DUNK EVICTION to see how your noisy tenant might seek to defend against your application.  Once you understand how section 83 relief works--you might wish to be ready to lead evidence beyond the scope of the incidents set out in the N5's.  You may wish to lead evidence of the hardship caused by the tenant, the number of tenants you've lost, the rent abatements you've paid to not lose other tenants, the number of attempts to get the tenant to behave, and all of the efforts you have gone through to deal with the problem.  What you will try to do is show why it would indeed be unfair to refuse the eviction.

IS THIS CONFUSING?

The N5 process, the various notices, and the hearing and application process is indeed very complicated.  The technical nature of the Notices result in many mistakes and many dismissals of applications.  Landlord's are frequently frustrated by the N5 process and if you find that the process is a little murky I can tell you that you're not alone!  Given that noisy tenants can have such a severe impact on your bottom line rental income it is worthwhile to retain professional help to take you through this process.

Michael K. E. Thiele
Lawyer
QTMG LLP
Ottawa, Ontario

Friday, 8 March 2013

BEATING THE SLAM DUNK EVICTION!

For the purpose of this blog let me give you a couple of fact scenarios.  The first is a situation of a tenant who is four months in arrears of rent, lost his job, and is unable to pay the rent in full for another month.  The tenant states that he is a bricklayer, is in a slow time at work, but with the spring thaw he will be able to get back to full time work.  The tenant wants to make payments towards the arrears but also needs to be late with the upcoming month's rent--meaning he needs to go further into arrears before digging himself out--that is if his plans work out.

The second scenario is that of a young woman living in a subsidized rental unit.  She has a boyfriend who deals drugs.  Police raid the apartment, find debt lists, scales, baggies, cash, and quantities of drugs about the unit.  They state that the presence of this paraphernalia should be obvious to any occupant of the unit.  The tenant and the boyfriend are arrested for possession with the intent to traffic.

The third scenario is that of a family of 5, mother, dad, and three kids 15, 13, 10 years old.  The 13 year old gets into a fight in the park with the child of another tenant.  That child tells his father.  The father goes to the apartment of the tenant with the 13 year old to speak with the parents.  Only the 13 year is home when the parent knocks.  The 13 year old answers the door, points a gun at the tenant and tells him to go away in less than polite terms.  The parent calls police and a swat team responds.  The SWAT team seizes a replica handgun after searching the unit.

The fourth and final scenario is that of a parent who allows her child to wander around the apartment building.  The child, along with another child from the building, figure out how to open the door to the roof of the 14 story apartment building.  For an unknown reason they think it is fun to throw smallish pebbles from the roof onto cars parked in the parking lot below.  In doing so, they cause significant damage to the vehicles as well as a minor injury to a person who was in the parking lot who was struck by one of the pebbles/rocks skipping off of a vehicle.  The boys are caught by the superintendent red handed and police are called.  No charges are laid because of their age.

The foregoing scenarios are examples of fact situations that play out at the Ontario Landlord and Tenant Board every day.  Each of these scenarios are sufficient on the facts to cause the Board to order a termination of the tenancy and eviction of the tenant.  If a landlord applies to the Landlord and Tenant Board, having filed the requisite Notice of Termination for each of the above scenarios they would normally expect to win their case before the Board.  The question is whether cases such as these can be lost--or put another way, can the tenants described in the above fact scenarios beat these "slam dunk" evictions?

As you may imagine, the reason that I am writing this blog is that there is indeed a basis for maintaining a tenancy in the face of the above scenarios.  The legal authority for the Board Member to refuse to terminate a tenancy (as the ones described above), flows from section 83 of the Residential Tenancies Act.  Section 83 is a discretion section--it allows an adjudicator to consider the entirety of a situation--not just the facts making up the offending conduct--including things like job history, cooperation with police, disciplining a child, disabilities, human rights issues, and general circumstances that one could summarize as being "fairness".  It is important to look at the language of section 83 of the RTA.  There you will see that the adjudicator is forced to ask whether it would be "unfair to refuse the eviction".  In this context, consider the following statements in relation to each of the four above scenarios:

1) Is it unfair to refuse the eviction if the tenant has been forthright with the landlord about his money problems--non-payment because of work problems (i.e. he isn't hiding and forcing the landlord to chase him).  He has proposed a payment plan--that pays all of the rental arrears within 3 months--meaning the landlord gets all of his money.  He is waiting for a significant income tax refund due within 6 weeks. The tenant presents sincerely and there is little doubt that the tenant means to make the payments he details.  Further the tenant agrees to a section 78--meaning he can be evicted for missing any one of the payments set out in his payment plan.  In essence, the tenant can be fully up to date within 3 months, making incremental payments along the way.  Letting him do this means he has stable housing and isn't forced to spend money moving that he can ill afford spend and of course the landlord isn't out of pocket if the plan works.

2) Is it unfair to refuse the eviction of this young woman when you learn, see, and hear at the Hearing that she is not the highest functioning individual.  Her testimony reveals a limited understanding of what was happening and she convincingly describes being surprised by what happened in her unit.  After the arrest and at the first appearance the boyfriend pleaded guilty and the charges against the female tenant were dropped.  She realizes how she was used by her boyfriend and with the help of her mother she has broken off the relationship with the boyfriend and does not allow his friends to visit.  Neighbours confirm that since the night of the police raid everything has been quiet and that the female tenant is seen around the place behaving normally---in fact she has apologized to the neighbours for what happened.  The police officer who testifies at the hearing confirms that in reviewing all of the surveillance (undercover drug buys) that led to the raid that the young woman was never seen selling or using the drugs.

3) Is it unfair to refuse the eviction of this family when you learn that they are a relatively recent immigrants to Canada.  The father works at a restaurant upwards of 80 hours per week, the mother works almost the same number of hours in a convenience store.  The oldest and youngest child are excellent students as demonstrated by their report cards.  The oldest also works part time after school and volunteers at the community centre helping more recent immigrants from his cultural background.  The youngest is a "normal" kid in every sense.  The 13 year old has been a difficult child for the parents.  He suffers from some developmental delays and seems to make poor choices all of the time.  His grades are terrible but the family has gotten him a tutor.  They are following a plan set up by the school psychologist and are compliant with all suggestions made by the "professionals".  The 13 year old has never been in trouble with the law in this way.  He apparently saw the replica handgun at a yard-sale ---in fact it was a lighter.  He bought it for 75 cents and never told his parents about it.  The parents confirm never having seen the gun but if they had seen it they would have confiscated it.  Since the incident they have grounded the child, taken away numerous privileges and have made it very clear to the boy how his behaviour has shamed the family.  Until he proves to them that he can be trusted he now must attend the after school program and isn't allowed to come home alone.  The parents promise that there will be no illegal activity in their unit, they offer an abject apology to the neighbours and assure them that the 13 year old won't be allowed to be home alone.  The parents confirm that if they are forced to move that they likely couldn't afford anything in this neighbourhood and that the kids would have to move schools.  Moving schools would be particularly hard on the 13 year old who is set up to receive supports there.

4)  Is it unfair to refuse the eviction of this mother and her son when it is clear that the other child is the one who convinced the boy that throwing the rocks would be fun?  The boy, when caught, told the superintendent exactly what they were doing without any sort hesitation.  In fact he seemed surprised that he was in trouble.  It turns out they didn't go to the edge of the roof to throw the rocks/pebbles ad in fact they never saw what they were hitting.  It turns out that the boy is easily led and not so bright.  The boy says that he did not know that he wasn't allowed on the roof and that it was the other boy who knew how to giggle the lock to get the door to open.  When asked about the damage to the vehicles he lacked appreciation of the situation and offered to fix the damage himself.  While only nine years old, he did appreciate that he had hurt another tenant in the building and he cried when asked about this by police.  The child's mother has apologized to the injured person and has asked for an opportunity to pay for any damage caused by her son.  She has spoken with her son and has forbidden him from associating with the boy who encouraged him to do this.  The tenant also provided the Board with a letter from the school psychologist confirming this incident as an anomaly that is highly unlikely to be repeated.

DISCUSSION

Whether the context provided in the foregoing numbered paragraphs would cause an adjudicator to "refuse" eviction or not is dependent on the judgment of the adjudicator.  Judgment includes the adjudicator's sense of fairness and what is right in the circumstances.  The adjudicator will be very aware that an order terminating the tenancy will throw each of these families into turmoil.  It will not be lost on the adjudicator that each of these tenants are financially vulnerable and that an eviction would be a profound upheaval.  The adjudicator will ask himself/herself, is there anything that I can Order--short of eviction--that will allow the landlord to have a safe building, where risk is entirely or virtually eliminated and the landlord has a quick tool to evict if it all goes to hell in a hand-basket (i.e. the same kinds of things happen again).

The fact scenarios, as provided in the first instance are "slam dunks".  The Notices of Termination read like the scenarios as at the beginning of this blog.  To counter-act the slam dung, the lawyer's job in defending the tenant is to lead evidence of the circumstances.  Then the lawyer will lead evidence, through witnesses and through the testimony of the client/tenant that will seek to provide the comfort that the adjudicator needs to not terminate the tenancy.  The lawyer will think about collecting evidence from experts and perhaps ask the client if he/she has offered apologies and payment for losses.  The tenant will be looking for guidance from the lawyer about what to do to maintain the tenancy---a lawyer, in analyzing the powers of the Adjudicator under section 83 and 78, will make suggestions to the tenant that if adopted may encourage the adjudicator to give the tenant another chance.

I can tell you that each of the above scenarios resulted, in real life hearings, in the tenants getting another chance.  None of these tenants were evicted.

The landlords--as well as their representatives--were upset at the outcome of these hearings.  On another day I will write about what the landlord's could have done to counteract the Adjudicator's exercise of discretion under section 83.  Suffice it to say though, that a landlord in pursuing evictions should never "stop" at leading evidence only about the incident.  A landlord needs to be ready to lead evidence about the impact of the adjudicator exercising discretion and not terminating a tenancy.

Michael K. E. Thiele
Lawyer
QTMG LLP
Ottawa, Ontario, Canada


Friday, 1 March 2013

Marijuana: How it destroys a landlord's investment

Grow-ops are evil and there are far too many landlords who are victims of criminals who prey on their naiveté.   What are grow ops?  In effect, they are rental units that are turned into green houses to grow marijuana.  In order to grow marijuana, tenants need lots of water, light, and heat---just like in a green house.  The heat and light is normally electric.  Because the amount of power needed is huge, tenants will often rig a bypass of the hydro meter and steal the hydro.  This causes an immense amount of damage as the tenants will cut through walls and even basement floors to access the power to go around the meter.  

Water is needed all around the house for the plants.  Water tubing is needed for all of the plants so holes are cut through floors and walls to pass the piping from room to room along with the electricity cables to power lamps and heaters.  The damage to the rental unit is utterly indiscriminate.  Support beams are cut, walls and floors are ruined, water and moisture is allowed to flow on floors, in walls, and anywhere it can run to.  In time, the moisture laden air will turn the walls, ceilings, flooring, and everything within the rental unit into a soggy and moldy mess.  It will be possible to push a finger through the floors and walls because the wood and composites are so badly decomposed.  How long will this take?  Less than a year.

I'm not familiar with the economics of marijuana growing but I have seen, often enough, the devastating impact that a grow-op has on a landlord.   A landlord, usually after a police raid, discovers that the lovely young couple with X number of children, were actually a front for an organized drug growing operation.  How do these tenants look?  They look normal, they are polite and humble.  They are extremely thankful that you would rent to them.  They bring you cookies.  And best of all, they give you post dated rent cheques, or offer to bring the cheques to you every month.  They never complain about anything.  They are the perfect tenants and never even ask you to change a lightbulb.  In fact, they will do and say anything to help you avoid the hassle of entering the rental unit.

A disturbing reality for landlords who have been victimized by these criminals is that the rental unit becomes a complete write off---it has to be completely demolished.  Worse yet, landlords will discover that most insurance policies now exclude coverage for damage arising from use of the property as a grow op.  The outcome is a destroyed house, an unpaid mortgage, no insurance coverage, and bills for hydro and demolition. For many small landlords it means bankruptcy.

If you are wondering what communities this happens in I can tell you that in Ottawa, Ontario, it happens in any and every community.  From the sleepy suburbs to downtown.  Where-ever there is a landlord who is not particularly watchful there lurks a "tenant" who wants to use the property as a marijuana grow op.

This blog today is to offer some advice on how to prevent or lessen the chance of your property being used as a grow op.  The most effective advice I can give is vigilance over the rental property.  In all of the cases I have been involved in a common theme in each case has been an absentee landlord.  A grow-op will only thrive and take root in your building if you don't go and inspect the unit.  Tenant's need you not to attend the unit.  The crops need time to grow.

As such, if you do only one thing as a landlord, you should make explicit provision in your lease for a monthly inspection (on 24 hours notice) of the rental unit for illegal activity.  The Residential Tenancies Act allows a landlord to include reasons to enter a rental unit in the lease.  Checking to see if a property is being used as a grow op is a legitimate reason to enter a rental unit.  This does not mean that you have to check every month---it just means that you may check every month.  It will take you less than 5 minutes to confirm whether there is a grow op in your unit.  It is worth the time.

I recommend that in negotiating a lease with a tenant that you highlight the fact that you will be entering the unit to inspect it monthly for the presence of illegal activity.  This in itself should motivate the wrong tenants to move on.  Once you get to know the tenants, and are satisfied that they are not the type to destroy your property you can go less frequently.  However, even with the nicest tenants it is imperative that you conduct at least annual maintenance inspections to catch whatever problems may be developing.

There are lots of signs of a property being used as a grow op and I provide a link here to a website from the Alberta government that provides clues visible from the street that a property is being used as a grow op.  Of course, while it is great to know the signs, as a landlord you should be trying to avoid having to look for the signs altogether.

Michael K. E. Thiele
QTMG LLP
Ottawa, Ontario
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About Michael Thiele

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Ottawa lawyer and partner at Quinn Thiele Mineault Grodzki LLP.  Graduate of Queen's University in Kingston, Ontario.  Called to the bar in Ontario in 1997.  Undergraduate degree at Colby College, Waterville Maine, U.S.A.