Roommates and the Residential Tenancies Act (RTA) 2006

Posted: November 14, 2017
By: Global Legal Services

The Request to Review raised the question of whether Section 61 and 234(x) of the RTA governs the relationship between a tenant and his/her roommate(s) and submits as follows:

1.         Does Section 61 and 234(x) govern the relationship between a tenant and his/her roommate with respect to the rent that can be charged by the tenant: and

2.         Can an order of the Board deemed to be ultra vires be applied under an application pursuant to Section 78 of the RTA.

 

FACTS

3.         On or about July 2017, the landlord brought an application to terminate the tenancy based upon the allegation that the tenant committed an illegal act, Form N6.

4.         In his application, the landlord raised the following issues

  1.  that there were different people coming and going at all hours with an unusual amount of AirBnB traffic with rooms for rent at $63.00 per night; and
  2. that the tenant advertised the unit on Airbnb for $169.00 per night being an illegal activity and renting the rooms as a rooming house and/or entire unit.

5.         The tenant admitted to charging her Airbnb customers amounts that exceeded the monthly rents.

6.         The Member granted the landlord’s application based upon the issue that the tenant committed an illegal act pursuant to Section 61 of the Act by charging her Airbnb customers rents greater than the rent charged by her landlord.

7.         In his Determinations, the Member stated, “Rather, the issue to be determined was whether the tenant had committed an illegal act pursuant to Section 61 of the Act and she admitted as much at the hearing.”  In effect, the Member determined that by offering a Airbnb and charging rent in an amount greater than permitted, pursuant to Section 234(x)……not Section 245(x) as stated in the order……..the tenant committed an illegal act under Section 61.

8.         On July 28, 2017, the Member ordered, “The tenant will refrain from renting all or part of the rental unit to third parties and, in particular, from committing the illegal act of charging rent in an amount greater than permitted by the Act.”

9.         On or about October 17, 2017, the landlord brought an application pursuant to Section 78 to terminate the tenancy because the tenant breached the terms of the July 28, 2017 order.

10.       At the hearing, the tenant admitted that she had roommates who were paying rent that was slightly greater than the rent charged by the landlord and it was not disputed that the tenant had refrain from offering Airbnb accommodations.  After hearing the evidence, the Member granted the landlord’s application and terminated the tenancy on the basis that the tenant had breached the July 28, 2017 order by charging her roommates rent that was greater than the rent charged by the landlord.

 

THE LAW & FACTS

11.          It is submitted that the landlord’s N6/L2 application raised the question……  are the rents charged by a tenant to third parties in an AirBnB illegal pursuant to Section 61 and 234 of the RTA if the rent is greater than the rent charged by the landlord to the tenant?  

12.       The objectives of the RTA are set out in s. 1 thereof, reads as follows:

The purposes of this Act are to provide protection for residential tenants from

unlawful rent increases and unlawful evictions, to establish a framework for the

regulation of residential rents, to balance the rights and responsibilities of residential landlords and tenants and to provide for the adjudication of disputes and for other processes to informally resolve disputes.

13.       The tenant submits that Section 61 and 234(x) of the RTA does not bar a tenant from having a roommate pay rent that is greater than the rent being charged to the tenant as the purpose of the RTA was not to regulate disputes between tenants and roommates.

14.       Notwithstanding the fact that the Member failed to raise Section 134(3) (b) and (3)(c) which states,

(b) collect or require or attempt to collect or require from any person any fee, premium, commission, bonus, penalty, key deposit or other like amount of money, for subletting a rental unit, for surrendering occupancy of a rental unit or for otherwise parting with possession of a rental unit; or

(c) require or attempt to require a person to pay any consideration for goods or services as a condition for the subletting, assignment or surrender of occupancy or possession in addition to the rent the person is lawfully required to pay to the tenant or landlord.  2006, c. 17, s. 134 (3).

The Tenant further submits that this section is not relevant to the fact situation presented to the Member especially in light of the undisputed oral evidence submitted by both parties that the tenant did not…sublet the rental unit, surrender the rental unit or part with possession of the rental unit.  Further to this, Section 135 of the RTA grants tenants, former tenants, prospective tenants and subtenants the right to bring an application for a breach of Section 134 and specifically excludes landlords from so doing.

15.       In New Brunswick (Board of Management) v. Dunsmuir, 2008 SCC 9, LeBel J.,

speaking for the court, was discussing instances where the applicable standard of review

is correctness, and said this, at para. 59:

Administrative bodies must also be correct in their determinations of true questions of jurisdiction or vires. We mention true questions of vires to distance ourselves from the extended definitions adopted before CUPE. It is important here to take a robust view of jurisdiction. We neither wish nor intend to return to the jurisdiction/preliminary question doctrine that plagued the jurisprudence in this area for many years. "Jurisdiction" is intended in the narrow sense of whether or not the tribunal had the authority to make the inquiry. In other words, true jurisdiction questions arise where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter. The tribunal must interpret the grant of authority correctly or its action will be found to be ultra vires or to constitute a wrongful decline of jurisdiction: D. J. M. Brown and J. M. Evans, Judicial Review of Administrative Action in Canada (loose-leaf ed.), at pp. 14-3 to 14-6.

16.       The tenant submits that the Member’s action must be found to be ultra vires as the Board cannot restrict a tenant from having a roommate and that by ordering the tenant to “….refrain from renting all or part of the rental unit to third parties” the Board is, in effect, acting outside of its jurisdiction since  the characteristic of  a roommate relationship is one where tenant rents part of the rental unit to a roommate but does not ….sublet the rental unit, surrender the rental unit or part with possession of the rental unit.

17.       In Matthews v. Algoma Timberlakes Corp., 2010 ONCA 468, Lang J.A. described the proper approach to interpreting the RTA:

The modern rule of statutory interpretation requires that "the words of an Act ... be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament": Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, at para. 26, citing Elmer A. Driedger, Construction of Statutes, 2d ed. (Toronto: Butterworths, 1983), at p. 87. Given the remedial nature of the Act, its provisions must be interpreted liberally to ensure the realization of its objectives. See Canada (Human Rights Commission) v. Canadian Airlines International Ltd., [2006] 1 S.C.R. 3, at para. 16.

19.       With respect to an error in the interpretation of law, the tenant submits that the question that must first be answered before granting the landlord’s Section 78 application is as follows:  is the rent charged by tenants to their roommates illegal pursuant to Section 61 and 234 of the RTA if the rent is greater than the rent charged by landlords to their tenants.

20.       The tenant submits that the question of “illegal act” pursuant to Section 61 and required under a Form N6 is one that relates to a serious breach of Federal, Provincial or Municipal law when the section is read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act. Notwithstanding the fact that Members are not bound by Guideline 9, it is submitted that charging rent that is slightly greater than the rent charged by the landlord cannot be deemed to be an illegal act especially in light of the fact that this act does not affect the rental unit or rental complex since different people are not coming and going at all hours with an unusual amount of traffic as alleged in the Form N6.

21.       Section 75 of the RTA grants the Board the jurisdiction to terminate a tenancy and evict a tenant whether or not the tenant has been convicted of an offence relating to an illegal act, trade, business or occupation.  In using the term “convicted” the tenant submits that the RTA infers to a serious breach of law under Section 61, since the definition of  “illegal act” refers to a serious offense under federal, provincial or municipal law.

22.       The tenant further submits that charging a roommate a rent greater than the rent paid by the tenant to a landlord is not an “illegal act” as contemplated by Section 61 of the RTA and as such, the Board cannot terminate the tenancy based upon a Form N6 under a landlord’s Section 78 application.

23.       The tenant further submits that in granting the landlord’s application under Section 78 of the RTA, the Member acted outside his jurisdiction by barring the tenant from having roommates and as a result thereof, that part of the order is ultra vires and unenforceable in a Section 78 application. 

24.       Further to the above, the tenant submits that in relying on this specific term of “part” in granting the landlord’s Section 78 application, the Member committed a serious error of law that, if not set aside by the Board, sets a precedent that would not only prejudice the tenant’s rights, but would also affect the interests and rights of the general public in future hearings before the Board.

25.       With respect to the issue of procedural fairness under Section 78, it must be noted that the Member failed to apply the law to the same fact situation in his determination that tenant breached the conditions of an order under the Section 78 application.  In granting the landlord’s Section 78 application, the Member based his decision on the allegation that the tenant was charging greater rents to a roommate rather than the original allegation raised in the N6/L2 application that alleged that the tenant sublet the rental unit to Airbnb customers and charged them greater rents than is permitted under the RTA.

Posted under Residential Tenancies Act
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