As a friend of mine said, “If the problem can be solved with money, it is not a problem, it is an expense.” However, if the expenses and costs exceed the revenues from lease of the property you rent out, this may already be a problem.
When you buy an investment property for the purpose of renting it out, you want the rental income to cover all maintenance costs, interest on the loan and give you some pocket money. Typically, the cost of operating a rental property is similar to what you incur when wearing the home, you live in, and sometimes even higher.
Let’s take a look at the Residential Tenancies Act, 2006 Act, which governs residential tenancies in Ontario and in particular its Section 20 (1), (2), which states: “A landlord is responsible for providing and maintaining a residential complex, including the rental units in it, in a good state of repair and fit for habitation and for complying with health, safety, housing and maintenance standards”.
The wording of this provision, at first glance, is too broad and abstract. To understand its meaning and significance, let’s take an example. A tenant applied to the Landlord and Tenant Board (‘LTB”) for an order that the landlord has failed to meet his/her maintenance obligations under the Residential Tenancies Act, 2006 by failing to comply with health, safety, housing or maintenance standards and consequently, substantially interfered with the reasonable enjoyment of the tenants. The tenant asked the Board to make an order against the landlord for full compensation for the entire period of residence in the house, as well as additional monetary compensation for general damages and medical treatment that may be required in the future for many years. The main complaint was the presence of mold in the house. Yes, the most common mold that lives quietly in homes for decades and does not bother anyone until this very mold becomes an incredibly serious problem for both the tenant and, accordingly, for the landlord.
How the parties can avoid such a claim? If all possibilities for resolving the issue, including negotiations, have been exhausted, and the claim has already been initiated and filed with the Board, how can the landlord protect himself from liability or, at least, reduce its amount? What does the tenant need to do to have the problem fixed?
Judicial practice shows that liability is not automatically assigned to homeowners. There are certain legal criteria that a tenant must meet in order to be compensated. For example, failure to fix the roof in a timely manner which, in turn caused moisture and, as a result, mold, does not automatically impose liability on the landlord. There are many other factors that are to be considered by the Board in a decision-making process. These factors include the severity and nature of the problem, how long it has been going on, whether there were previous or pre-existing problems, whether the tenant reported the problem to the landlord, whether the landlord responded to the problem in a reasonable and timely manner, whether or not the tenant denied the landlord access to the unit to complete the repairs, whether repairs are required as a result of damage caused by the tenant or one of the tenant’s guest, whether the landlord conducts regular inspections of the complex and/ or rented unit(s), whether the air quality in the entire rental unit was compromised and whether the entire rental unit was rendered unfit for habitation due to mold and whether the tenant has made any attempts to mitigate his or her damages, and what actions have been taken by both parties, if any, and other factors the Tribunal considers important and relevant. In cases where the problem is not apparent and the landlord makes efforts and takes action to address the issue and resolve the problem within a reasonable time, the courts do not impose liability on the landlord without having his/her fault and negligence proven. In other words, the owner of the property cannot be held liable to his tenant for all problems discovered by the tenant without proof that the problem was caused by the landlord’s fault or negligence. Therefore, if, after the tenant notifies the landlord of a problem that was not caused by the landlord’s negligence, and the landlord has taken appropriate action and dealt with the complaint in a reasonable and timely manner, the landlord should be relieved of liability to the tenant.
This does not mean that the landlord is not responsible for the structural integrity of the rental property. Landlord and Tenant Board carefully examines each situation individually. However, the Board tries to be consistent in its approach to the problem and in a decision-making process. The Board would ask whether the landlord had preventative maintenance program in the house to prevent the occurrence of this problem, whether the landlord promptly addressed the complaint. In case of compliance with these requirements, as a rule, the Board rejects the claim for reduction of the rent or compensation.
For the Board to make a decision for the tenant, the latter will also have to prove the damage, causation, negligence of the landlord, which means that, in its turn, the tenant will also have to determine the cause and the source of the mold, not just the fact that it is present. As we know, there can be infinitely many sources of mold: from stagnant air in an unventilated room to a leaking roof and faulty plumbing. Mold can be blamed on either party, the landlord or tenant. In addition, in order to receive compensation for damage caused to health, the tenant must not only prove that this type of mold poses a threat to health in general, but also must establish the damage based on facts and causal relationship between the presence of mold and the specific damage caused to the health of the tenant.
