Frustrated Tenancies:

Question: When a rental unit in Ontario becomes uninhabitable due to a fire, flood, condemnation, or other unforeseen event, can a tenant ask Forseti Legal Services (a Paralegal) about whether the tenancy is frustrated and what recourse they have to challenge or address termination?

Answer:   If an unforeseeable event makes the rental unit impossible to occupy, the doctrine of frustration can end the tenancy by operation of law, including under section 19 of the Residential Tenancies Act, 2006; this may apply when premises are condemned or otherwise prohibited from being lived in, such as in AS v. CJM, 2010 CanLII 58985. If repairs will take a lengthy, uncertain time, the security of tenure, including a return or first right of refusal, may be absent, so tenants should act quickly to review what notice was given and whether the landlord’s position fits the facts. A Paralegal at Forseti Legal Services can help tenants across Ontario understand whether frustration likely applies, identify available arguments and next steps for recourse, and prepare a practical plan for communication with the landlord or the relevant process; call (705) 806-7577 to discuss your situation.

Understanding When the Doctrine of Frustration Applies to a Residential Tenancy and What Recourse Does a Tenant Have?

Incidents that cause serious damage such as a fire, a tornado, a flood, a major water leak, or another catastrophic circumstance, may occur and cause impossibility of occupancy of a residential unit.  Even a change in law may occur in such a way as to make compliance impossible. When a tenancy is made impossible due to unforeseeable outside forces, such is referred to as a force majeure event, and the legal result is that the statutory obligations as well as the contractual obligations of the landlord and the tenant come to an end as per section 19 of the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17. This ending of the tenancy relationship due to the frustrating event occurs regardless of whether the frustrating event happens within a lease period or happens afterwards when the lease is expired and the tenure is converted into a month-to-month arrangement. Specifically, the Residential Tenancies Act, 2006 says:

Condemnation

Sometimes a rental unit becomes unoccupiable due to an order issued by the local municipality that condemns the premises. This type of situation occurred and was the issue within the case of AS v. CJM, TSL-05808-10 (Re), 2010 CanLII 58985 where it was said:

Accordingly, and apparently, despite that premises may become condemned due to the neglect of the landlord, as a matter of law, frustration of the tenancy agreement, and thereby termination of the tenancy agreement with corresponding termination of the tenancy, results when the premises are officially condemned.

Ceasing of Security of Tenure

Where a tenancy agreement is deemed frustrated, such as in circumstances where a fire requires restorative work that will be extensive and take considerable time, the security of tenure, including first right of refusal to return following restorative work, is absent.  Only where the restorative work can be done in a reasonable amount of time will the tenancy agreement be without frustration and therefore with security of tenure protected as per the case of Y.Y. v. A.T. and L.W., TEL-32649-12 (Re), 2013 CanLII 51226 where it was said:

Summary Comment

When a serious force majeure event occurs, rendering the premises unoccupiable for an unforeseeable length of time, the tenancy agreement, whether within a lease period or month-to-month period, becomes frustrated and all obligations cease including the security of tenure usually enjoyed by the tenant.