Enforcing Against Landlord Owners

I am sure that we have all been to meetings where the issue of unruly tenants is raised by a director or owner. The complaints are often about noise, overcrowding, damage to the property, or parking. Sometimes the complaints are about risky behaviour, or even criminal activity. The other residents may try to address the problems with the tenants, but many file complaints with the property manager or board instead. The owner is often unaware of the problems with their tenants until he receives a letter from the manager or board. Once the owner receives the demand letter he is in the difficult position of trying to get his tenants to comply. Most owners know that if their tenants don't comply with the condominium's demands a lawyer will be hired by the condominium to write a letter and the cost may be charged back to the owner. If the owner cannot get his tenants to comply with the rules he is left with the nearly impossible task of trying to get an order for eviction from the Landlord and Tenant Board. While the board of directors is in the difficult position of trying to elicit compliance from the tenants by enforcing against the owner, there are many provisions in the Act that it can rely upon. Section 119(2) requires the owner to take "all reasonable steps" to ensure that his tenants comply with the Act, the declaration, by-laws and rules. This section is similar to section 17(3) of the Act, which requires the condominium to take "all reasonable steps" to ensure that the owners comply. What is "all reasonable steps"? A recent case discussed the term. In Toronto Standard Condominium Corporation No. 2032 v. Boudair et al (2016) the condominium commenced an application against the tenants and owner of a unit after it received complaints about smoke escaping from the unit and entering the adjacent units. The tenants had moved into the unit in August of 2015. The condominium wrote to the owner in September about the complaints it had received. The owner immediately advised the tenants about the complaints and instructed them not to smoke in the unit (which the lease prohibited). More complaints were received so the condominium notified the owner. The owner sent various emails and text messages to his tenants about the smoking. In early November the condominium's lawyer sent a demand letter to the owner. The owner forwarded the letter to the tenants. The condominium received more complaints and commenced the application on November 27, 2015. Once served with the condominium's materials the owner was provided with copies of the complaints. He served his notice of termination on the tenants and made an application with the Landlord and Tenant Board to terminate the lease early. The earliest hearing date before the Landlord and Tenant Board was February 2016. On January 6th at the hearing of the condominium's application the parties agreed to a consent order that required the tenants to vacate the unit. The issue of costs remained. The condominium sought costs of $32,000.00 payable by the owner and tenants. The owner sought costs of $25,000.00 payable by the condominium and tenants. The tenants did not seek costs, but requested that they not be ordered to pay any costs. Diamond J., the judge hearing the costs arguments, reviewed the relevant portions of the Act, including sections 134 and 119, and the term "all reasonable steps":
[23] Pursuant to section 119(2) of the Act, every owner must take “all reasonable steps” to ensure that an occupier of that owner’s unit comply with the Act and the applicant’s declarations, by-laws or rules. The term “reasonable steps” is not defined. In Carleton Condominium Corporation No. 555 v. Legace 2004 CanLII 26137 (S.C.J.), Justice Aitken observed as follows: “The Condominium Act, 1998 does not establish the strict liability of unit owners for all infractions of tenants, even if they have had no notice of the infractions. The wording of s. 119(2) to the effect that an owner shall take “all reasonable steps” to ensure that an occupier of the owner’s unit complies with the Act, the declaration, the by-laws and the rules, implies that the owner has to know what is going on at the unit so that he or she can take whatever steps would be reasonable to deal with any problems. Put another way, it only stands to reason that the owner has to be notified of any unacceptable conduct on the part of the tenant if it is the owner’s responsibility to vouch for that conduct and to take reasonable steps to correct problems. In many, if not most, situations, the unit owner who is renting to a tenant does not live at the condominium complex. If the property manager of the complex does not inform the owner of tenant infractions, how can the owner live up to his or her responsibility to ensure that the tenant abides by condominium rules? It would be contrary to public policy to expect unit owners to become private investigators checking up on their tenants to see if they are breaching any rules. It makes much more sense for the condominium’s property manager to notify the unit owner of any significant or on-going breaches.
The judge also discussed the general principle that the costs of a compliance order should not be borne by the other innocent unit owners. Notwithstanding the general principle, the judge found that the condominium was not entitled to all of its costs in this case since the owner had satisfied his obligation to take all reasonable steps to ensure his tenants complied when he contacted them numerous times, made an application for early termination of the lease, and eventually obtained their agreement to terminate the lease early. Consequently, the condominium was not entitled to any costs from the owner and could not register a lien against the unit to collect those costs.  With respect to the costs sought from the tenants, the judge found that the condominium was not entitled to all of its costs from them either since it "jumped the 'smoking gun' by moving straight for a compliance order" without working with the owner to find a resolution. The tenants were ordered to pay $10,000.00 to the condominium and $10,000.00 to the owner. As a result of the condominium's decision to "jump the smoking gun", the other innocent unit owners will be forced to contribute toward the $15,000.00 in costs incurred by the condominium that are not recoverable from the owner or tenants. The lessons to be learned from this case are: 1) boards need to be reasonable when enforcing against a landlord owner; 2) reasonable will depend upon the circumstances, but it may include giving the owner time to negotiate the early termination of the lease; and 3) boards should consider assisting the owner in his efforts to enforce against the tenants, which may include disclosing the complaints made by other residents before a court proceeding is commenced so that the landlord owner can use the complaints as grounds for an application to the Landlord and Tenant Board to evict the tenants.