Wednesday 9 October 2013

Co-operative Housing (Co-op) at the Landlord and Tenant Board

Something quite significant has happened in the context of Co-operative Housing in Ontario.  The Ontario Legislature has passed Bill 14 the Non-Profit Housing Co-operatives Statute Law Amendment Act 2013.  It received Royal Assent on September 26, 2013, and is awaiting a proclamation by the Lieutenant Governor to be in force.


So, what is the big deal?  To understand the significance of this new law one needs to understand the cumbersome legal process that Non-Profit Housing Co-operatives have had to follow in dealing with their members for serious matters related to their continued membership and occupancy of their member housing units.   I'll take a moment or two to outline the practice at the present time, but be aware it is a high-level summary of the procedure that intentionally leaves out some of the nuance so that this article can come in at a reasonable length.

A non-profit housing co-op is a community that is run on democratic principles whereby the members of the Co-op, by vote and representation through a Board of Directors decide on the "rules" of living in the community.  The Co-op is made up of "members" and the members elect the Board of Directors.  Non-profit housing co-ops tend to have certain themes or ideologies--whether it is to provide housing to low income persons or to live "green" or whatever else strikes the fancy of the members.  The point is that co-ops are recognized, at law, to be a reflective of a manner of voluntary association in accordance with certain rules that the members decide.  In a word, it is a rather "communal" lifestyle.

When a co-op needs to terminate a member's membership and terminate occupancy rights, the co-op board of directors are required to invite a member to appear before the Board.  The member is informed of the reason for the invitation (terminate membership because of XXX (i.e. housing charges arrears, non-compliance with rules etc.) and the member is given an opportunity to explain the situation and perhaps make proposals to resolve the issues.  The Board then considers the member position and comes up with a decision.  Sometimes the decision is a performance agreement or some sort of other satisfactory resolution.  Other times, the decision is to terminate the membership and occupancy rights of the member.

Once the Board makes its decision the member has the right to appeal the decision to the membership.  At a meeting of the membership of the Co-op the member has the right to make a pitch to the membership to explain their position and to ask the membership to make a different decision.  Sometimes the members change the Board's decision, sometimes not, or sometimes the Board's decision remains as not enough members show up to the meeting to make quorum.

If the decision to terminate the membership and occupancy rights of the member are upheld, and the member does not abide by the decision (i.e. does not move out), then the Co-op has to get it's decision enforced through the law.  The framework for this enforcement is set out in the Co-operative Corporations Act  starting at section 171.1.

The framework for enforcement requires the Co-op to apply to the Superior Court of Justice, via application, to terminate the membership and occupancy rights and to obtain a writ of possession which directs the sheriff to enforce the eviction of the member.  The Judge hearing the application typically will be concerned to ensure that the procedures were fair and in accordance with the legislation and the Co-op's own by-laws and regulations.  For the most part, there is not much intervention in the actual decision to terminate and evict if the process was fair and in accordance with the law (i.e. the Judge will generally not interfere as a matter of "discretion" and "sympathy").

The issue for many Co-op's has been that the process of applying to the Superior Court of Justice has been an expensive method of proceeding.  It is especially expensive in comparison to the relative ease of the process at the Landlord and Tenant Board.  Invariably, the co-op process in relation to housing is compared to the legal process of evicting tenants in more conventional landlord and tenant relationships.   The comparison has been ongoing since the Landlord and Tenant law eviction process was taken out of the Courts (with the advent of the Tenant Protection Act in 1997/98) and put before a specialized and streamlined administrative tribunal.   The current Landlord and Tenant Board (previously the Ontario Rental Housing Tribunal), is not constrained by the same procedural requirements nor the protections afforded to parties by the Rules of Evidence.

On a direct comparison basis, it does appear that a landlord (be it a non-profit housing provider or a for profit landlord) has quicker and cheaper access to an adjudicative process than does a Non-Profit Housing Co-Operative.   In my opinion, the fundamental reason for the great difference is that the application process to the Court requires the submission of all of the evidence by affidavit whereas the Landlord and Tenant Board process relies on oral evidence of the parties.

To prepare an application record (to the Superior Court) requires a lawyer to put together an affidavit that covers all of the potential issues that may arise.  Technically (and it is a big Technicality) on an application before a Judge, the only "evidence" is what is contained in the affidavits.  If what you want to say or submit to the Court is not in the affidavit, then you can't say it--regardless of how true or important it is and technically the Court may not accept any facts as true unless those facts are in an affidavit.  The significance of this is that lawyers, acting on behalf of co-ops are very careful to ensure that the affidavits and the application records are very complete and contain a full explanation of everything that occurred.  Writing all of this into an affidavit, proofing it, reviewing it with the client, and ensuring that it is complete is a big job that can easily take hours and hours.  Those hours cost a significant amount of money--but they can't be avoided. 

The frustrating part of the "application" process is that all of the work that goes into the Application record and the affidavits often seems wasted as the "member" just before the court hearing either moves out or advises the Court that he/she/they are able to vacate in short order.  The great expense (time and money) seems to have been unnecessary and is a big hit to the co-op's operating budget.  While some of these costs are ordered by the Court to be recoverable against the member, such an order is often not complied with as the member does not have money.

The Landlord and Tenant Board process is compartively simple to get before the Board.  The application process involves two to three forms--which consist substatnitally of ticking off boxes.  The boxes on the forms that require actual writing are small and do not call for the same level of detail as the Superior Court application process.  This is because the Landlord and Tenant Board process is designed such that the evidence (i.e. all of the information that goes into the affidavit in the Superior Court) will be tendered at the hearing through oral evidence of witnesses and documents made as exhibits during the course of the hearing. 

The Landlord and Tenant Board process often avoids an actual hearing as the Board provides mediation services which allows the parties to make a deal without having to have a long hearing.  Also, the Board process forces the parties together (into the same space) and makes them wait for their turn at the Board.  The waiting process, and forcing people to be at a location that rather not be at, also encourages deal making (thereby avoiding the need to go through with a hearing). 

The Landlord and Tenant Board process does not require the same amount of legal work, on the part of the lawyer, to get the case before the Judge/Adjudicator.  Therefore it ends up, most of the time, being cheaper than the process that Co-op's are required to follow under the Co-operative Corporations Act.

SO WHAT IS THE NEWS?

Now that you understand the system, the big news is that the Province of Ontario has passed legislation that will allow Co-op's to proceed with termination and eviction applications to the Ontario Landlord and Tenant Board.  This means that the expensive process of going to Court (with detailed affidavit evidence etc.) is no longer necessary.  Co-op's will have access to the more efficient Board process and Co-op's will not have to prove their cases in accordance with strict evidentiary rules and the procedural fairness requirements of the Court process.  The looser rules applicable to proceedings before administrative tribunals will now apply to co-op cases as well.

To be clear, the hallmarks of being a co-op are not being washed away by this legislation.  The communal style of living, the rules being made by members, and the authority of the Board of Directors will continue to exist.  What is different is that the enforcement of the eviction may now be pursued at the Landlord and Tenant Board.

If you are interested in seeing this new legislation the best link I have found is HERE.  If the link goes dead, the "new" parts of the Residential Tenancies Act are now in section 5.1 of the RTA.  The Landlord and Tenant Board website, under its Law section has the new provisions in the Act itself.

A small caveat to this article is that I have to say that I have only been through Part 5.1 of the RTA (the new co-op provisions) once.  It will take some time getting used to how the mechanics of this part of the Act will actually work--therefore, this new law is still a learing curve for me and you should read it closely as well to see how it is intended to operate.

Michael K. E. Thiele
www.ottawalawyers.com
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19 comments:

  1. These blogs and articles are fully good enough for me.

    dwi in new york

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  2. I want to move out 1 month after moving in. I paid 1st and last. It has been a nightmare...I have no fridge, the noise is constant, part of the basement was flooded, a lot of things promised were no respected. We have signed no lease and I am on month to month basis. I moved in july 1st.Is it ok for me to tell them to take the last for the upcoming month of august and move out for september?

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  3. I wanted to move out as soon as I found out that the housing co-op where I live is really a dictatorship run by 'management' who seems to think that she has a job for life. All 'members' just vote the way she wants in order to keep their subsidies coming in...while the non-subsidized members are treated unfairly. How can the dictatorship be ameliorated?

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    1. Hi: One member, one vote. Run for the Board and work to change the Co-op through the organizational structures that exist. The alternatives are to just live with how the Co-op is run or move. Sorry I don't have a better answer for you.

      Michael K. E. Thiele
      www.ottawalawyers.com

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  4. How do I find out the law with regards to co-ops charging additional fees when I move in? I know any type of security deposit is illegal, but does that apply to co-ops?

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    1. Hi Melissa:

      In theory at least, a Co-op could become a landlord and you be a residential tenant of a co-op. If the is the case then you have the protections of the RTA and basically all additional fees will likely be illegal. However, it is more likely that you are becoming a member of the Co-op and as a result of becoming a member you will gain occupancy rights. Your obligations, and those of all other members, are set out in the by-laws of the Co-op, its rules and regulations. The governing legislation is the Co-oeprative Corporations Act. The Residential Tenancies Act has a very limited role in Co-ops---it was recently amended to allow Co-ops to use the RTA for eviction proceedings (and membership termination). Co-op members have no similar right of access to the RTA for their own complaints.

      You will need to consult with the Co-op to get details of what is expected of members.

      Michael K. E. Thiele
      Quinn Thiele Mineault Grodzki LLP
      www.ottawalawyers.com

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  5. So if I’m living in a co op paying full market rate for the house so I have no rights? Do I even have a landlord or just property manager?

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    1. Hi: If you are in a co-op you likely do not have a landlord. Instead, you will be a member of the Co-op and with your membership rights you have the right to occupy a housing unit. The Co-op is run by the members and the members elect directors (who often hire a property manager). Your rights and obligations are set out in the by-laws and Rules of the Co-op as well as in the Co-operative Corporations Act. All of the processes dealing with your membership and occupancy rights are unique to the Co-op you are living in. That is the entire point of Co-op living.

      Note that there is a small but unlikely exception to the above. Co-op's can rent out non-member units to tenants and in those cases they are considered landlords under the Residential Tenancies Act. However, this is exceedingly rare and it is more likely that you are a Co-op member.

      Note that if the Co-op has a problem with you and has grounds to want to terminate your membership and housing rights the Co-op now has recourse to the Landlord and Tenant Board to evict you. The scope of CO-op's being dealt with at the LTB is limited and operates under its own special section and own special forms. You should also know that Co-op members are not entitled to bring any application against their Co-op at the Landlord and Tenant Board.

      Michael K. E. Thiele
      www.ottawalawyers.com

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  6. Can I be evicted from my coop for having more pets than the pet policy states

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    1. Hi Sandra:

      The short answer is "yes". The process is lengthy, there are opportunities to correct, and residual discretion resides at the LTB with the adjudicator if eviction seems disproportionate to the breach. Circumstances matter and your explanation will matter too.

      Best of luck

      Michael K. E. Thiele

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  7. Hi my mother lives in a co-OP she has water coming in the bedroom some times also very heavy dust coming threw the vents.what is the co-OPs responsibility to rectifie the problem she is almost 90

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    1. Hi: The Co-op has a responsibility to maintain and repair the member units. However, the enforcement of that obligation can be tricky. While the law has (recently) changed to allow Co-op's to proceed to the Ontario Landlord and Tenant Board for termination and eviction Orders the law does not allow Co-op members to use the Ontario Landlord and Tenant Board processes to file applications agains the Co-op for maintenance problems etc.. The first step is still to contact the property manager, then seek a meeting with the Board of Directors, and then turn to the membership of the Co-op at a members meeting. If you have an unresponsive property manager and/or unresponsive Board of Directors then you have a big problem. Going to the members and basically becoming an activist to oust the current Board and fire the property manager is a big big job---especially if you're 90 years old and really only want a decent place to live. There is a further option of "going to court" to force the Co-op to comply with its obligations and while that stands a good chance of being successful (if the underlying problems are clear), the cost of a Court application is significant.

      The more practical alternative, if the Co-op is doing nothing, is to try to engage the Property Standards Department in your City/town. For whatever the issues are start calling every governmental authority that has any power over the issue and call them in to inspect and make Orders. You have numerous possible authorities to call in and whenever you speak to one inspector ask if he/she can recommend anyone else to call to inspect and make orders. In some instances, the City can actually do the repairs and charge it back to the owner (i.e. Co-op). This will take some co-ordination but if you're there to help your mom it should be smooth enough of a process.

      Good luck
      Michael K. E. Thiele
      www.ottawalawyers.com

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  8. I have moved in with my mother a few months back because my father passed away. The office lady said I could stay without becoming a guest. She has now changed her mind and said I need to apply to be a long term guest. I stated that I was going to be moving out but she insisted that I apply for the time being. My mother sent a letter to the board and they approved me to become a long term guest. I was told that I needed to provide income documents. I provided these documents to see how much the rent would increase. Once I received the letter of income increase I stated that I did not want to be a long term guest because I am moving and doesn't make sense to pay rent when my name would not be on the lease agreement. The lady is now stated that I owe 3 months of rent. Can she make me pay as I did not sign anything stated I would pay. I haven't signed any application, agreement or anything.

    Thank you

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    1. Hi: There is something in your facts that just isn't quite right. Reading between the lines, I think you are mistaken or have been misled by the Co-op. It might not be anything intentional but perhaps the Co-op was saying one thing and your were understanding another. If the language of "long term guest" was being used then it is likely the misunderstanding is the Co-op's.

      In Ontario, Non-Profit Housing Co-operatives operate under the Co-operative Corporations Act. If you are inclined to look at the legislation the portion dealing with non-profit housing co-op's is at the end of the statute. There are co-ops other than housing co-ops too (like Mountain Equipment Co-op). Anyway, this is significant because Co-ops have the authority to make unique rules for how the members of the co-op live. Through meetings of the members and an elected board of directors the Co-op on a majority rules basis makes by-laws and rules that co-op members must live by.

      One of the rules that is very often present in Co-op bylaws deals with who is living in a members housing unit. Co-op rules do not allow a member to invite a person or multiple people to live with them for an extended period of time. Regular guests are permitted and ordinary reasonable stays are permitted. However, longer term stays, or such frequent short term stays that the stay appears permanent are often not permitted unless the member gets permission from the Board of Directors for a long term guest. Different co-ops have varying and different rules for approving long term guests and even have different definitions for what constitutes a long term guest.

      To properly understand the long term guest rule you have to read your Co-ops bylaw. The by-law in which this information is contained is typically called the "Occupancy By-Law".

      What is confusing about your facts, as you've set them out, is that being approved as a long term guest should under no circumstance impose an obligation to pay any "rent" (Housing charge). Being approved as a long term guest does not equate to becoming a member of the Co-op. Only members have occupancy rights and only members have an obligation to pay housing charges (i.e. rent).

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    2. What I wonder is whether your application to be approved as a long term guest (which is really an application from your mother and not from you) was really an application to be accepted as a member of the co-op with occupancy rights jointly with your mother in that unit. If you indeed applied for membership and occupancy (sort of like amending a lease to add a new tenant) to live in the Co-op with your mother then you indeed have obligations to pay housing charges.

      Separate from the reasons Co-ops have to control who the people are living in the Co-op, a Co-op requires members to confirm the makeup of their household as the makeup of the household changes. This is because any housing subsidies that a co-op member receives is impacted by the amount of income that a household is generating. For example, your mother's household income when she is living alone is presumably lower than when you are living with her. Your income, added to the household, is presumed to contribute to the cost of living, the housing charge, and other expenses. As such, the affordability of the apartment is greatly increased by your presence. Because of this, the Co-op (as required by law) needs to review your mothers entitlement to a subsidy. Because of your income, your mother's entitlement to a subsidy might be reduced. This is because she can now afford to pay more because of your income. This is why you would have been required to provide your financial information to the Co-op.

      Even with you disclosing your income information, this does not create an obligation on you to pay rent (housing charge). If you are NOT a member then the housing charge is not your obligation. The housing charge is your mother's obligation. Because of your presence in the household it is your mother's housing charge that like is going up and the demand for payment should be made to your mother.

      Once you leave the Co-op your mother would report the change in the composition of her household and her housing charge would be adjusted again.

      Aside from the above, I'm sorry I can't be more helpful on the facts as you've laid them out. Like I said, something isn't quite right in the facts as you describe them. I can't tell from your question where the mistake lies. To get to the bottom of it, consider going to a community legal clinic or hiring a lawyer or paralegal to look over your paperwork.

      Michael K. E. Thiele
      www.ottawalawyers.com

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  9. I am moving into a Co-Op I actually just received the key when viewing the unit prior was quick and old tenant was still living there So Therefore my question is that moving into a unit as a new tenant Once the old tenant moved out Also in my interview was told that updates we're going to be done in the near or far The add was very misleading so now going back to my question is the new tenant has to clean this filthy unit and repair what was done after Some plastering was done very poorly like really major bad and to paint this there is paint all over the carpets which i was told that this unit would be cleaned as they say they do linoleum is ripped at the entrance which neither of us seen due to the door was open and underneath this at the entrance door you can see the floor rotting,wet and breaking up The stair railing is unsafe as the screws are in the chiprock very unsafe as i was cleaning not even moved in yet i almost fell again the carpet are ripped and full of paint the taps in the kitchen very loose one cupboard is broken off the hinges the plate is off and the electric outlet for the fridge has not plate there is potential mold in the bathroom and the entrance door has mold From what i was told was they do clean up but now that the unit is mine all these repairs and the awful paint job from the previous tenant did all over counter,rugs trims not butting living room trim is not even nailed to the wall my delimma is i am to clean and to do all the repairs What to do

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    1. Hi Line:

      A very big and important question. Are you a tenant covered by the Residential Tenancies Act or a member of the Co-op with occupancy rights to a member unit? In virtually 100% of cases I come across, when you live in a Co-op you are a member of the Co-op with occupancy rights to a member unit. I presume that this is your situation.

      If you are a Co-op member (with occupancy rights) then the Residential Tenancies Act has no value to you. The Residential Tenancies Act that protects tenants and imposes repair and maintenance obligations on a landlord does NOT apply for the benefit of Co-op Members. The Residential Tenancies Act has very limited application to Co-ops and is only used for eviction proceedings by the Co-op against former members (nothing else).

      Your rights as a Co-op member are affected by the Co-operative Corporations Act. It has limited value for what you are explaining as your problems. Otherwise, your by-laws and rules apply to the Co-op's duty to you. Unfortunately, you will have a tough time enforcing the by-laws through a legal process because you would have to go to Court. That is exceptionally expensive and complicated relative to the processes of the Landlord and Tenant Board.

      You need to complain to the Co-op. You need to repeatedly ask for the unit to be renovated, repaired, fixed up, etc.. They may, or may not cooperate. Your options after that are to contact your Property Standards Department (from the City you live in). Get an inspection and get the City to Order the Co-op to fix the place. If they do not, then it is possible that the City will send in contractors to do the work at the Co-op's expense. How effective this is (i.e. calling property standards) depends on where in the province you live, the nature of the property standards by-law in the City you live in, the calibre of the property standards officer who visits and their willingness to help you.

      Beyond that, I do not have much for you. As for cleaning etc., should you have to do this? Not from the level you describe. You should have received a unit in decent acceptably clean shape and then you would clean it to get it to your personal level of clean. Unfortunately, if you don't clean this place it is quite unlikely that anyone else will.

      Good luck
      Michael K. E. Thiele
      www.ottawalawyers.com

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  10. I share ownership of a home where both my brother and I are landlords. My brother, an alcoholic, lives in the house with a woman he met online and her daughter- who do not pay rent or utilities. During a domestic dispute this woman charged my brother with assault and he is now evicted from the home until January when his court case is heard. She is claiming tenant abuse by her landlord. The house since she has moved in has declined terribly as she has brought four dogs into the home and has constant garbage around the premises- needless to say the house is in need of repairs. She occupies the top part of the house with my brother -so this qualifies her as a co-op with occupancy rights correct? The bottom of the house has tenants that pay rent. My question is can I send her an eviction notice at this time and enter the home to inspect the level of damages as a landlord? Can I evict her for the following reasons: Non-payment of rent / damage to property / N12 allowing my brother to re-enter his home for occupancy - even though he was considered the landlord at the time of the dispute?

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    1. Hi: Co-ownership and Co-op's are not the same thing at all. The situation you describe is, from a legal perspective, exceptionally complicated. Coming into play is criminal law, family law, residential tenancies law, and common law property law. Your brother needs to go and see a lawyer to determine a plan of action and to explore what rights the woman (and daughter) have. It is not at all clear that they are tenants under the Residential Tenancies Act. I would be very cautious about giving them tenant rights under the RTA when that isn't the original basis of their occupation of the premises. When I've dealt with matters like this (and Family Law Act issues were not engaged), the process I've pursued for my client has been an application for a Writ of Possession coordinated with the client's criminal lawyer communicating with the Crown to deal with any criminal law restrictions (and required variations). If "family law" is applicable (perhaps the woman is a "spouse", "common law spouse" and perhaps your brother has an obligation to the child?), then he will need to closely coordinate with a family law lawyer as well. An application for a Writ of Possession will not go over well if family law issues are indeed engaged. All of this is very messy.

      As for just wanting to make the occupant a tenant and evict for non-payment of rent----that is so very unlikely to happen. Firstly, establishing that the RTA applies will be difficult. Your brother as a landlord sharing a kitchen and bath with the occupant ensures that the RTA does not apply (section 5(i). Beyond that you have no enforceable lease terms, no set rent amounts, etc.. I don't see the LTB finding the existence of an RTA covered lease.

      Given the complexity of this, you really need to start with an experienced lawyer--and likely need more than one--to solve this problem.

      Good luck
      Michael K. E. Thiele
      www.ottawalawyers.com

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Any answers provided are intended to reflect the Law of Ontario, Canada. The answers are not legal advice and no one should rely on the answers provided as legal advice. The answers are intended to be general information about Ontario Law and are the personal view of the author based on the limited facts provided to the author. The answers may not be legally accurate and may indeed be contrary to the law of Ontario. Answers and conclusions drawn may have been different if facts had been shared that have not been disclosed in the comment/question. This blog is intended to assist people in learning about Ontario Landlord and Tenant Law. However, if you have actual legal problems this blog should under no circumstances replace proper legal advice obtained by retaining a lawyer or licensed paralegal to advise you. Nothing in this blog, comments submitted or answers provided, gives rise to a solicitor and client relationship. Comments are published as submitted and commenters should be aware that if they identify themselves in a comment that their identity will become public upon the comment being published. Comments that have been published may be deleted upon request to the author.

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