Readiness for Occupancy:

Question:If my landlord signed a lease before the rental unit was ready for move-in in Ontario, can I claim rent abatement or reimbursement for temporary housing under RTA 2006 section 20?

Answer:In Ontario, a landlord must provide and maintain a residential unit in good state of repair and fit for habitation on the scheduled move-in date, even if the tenant knew about construction, renovation, or other readiness issues before signing, and agreements cannot remove that duty under the Residential Tenancies Act, 2006, s. 20.   If the unit is not habitable when possession is supposed to start, remedies under Residential Tenancies Act, 2006, S.O. 2006, c. 17, s. 29 can include rent abatement (potentially up to 100%) and reimbursement for reasonably necessary expenses like hotel costs or temporary accommodation, as reflected in Swan v. Liang, 2019 ONSC 1573.   For paralegal help tailored to your situation with timelines and evidence in Ontario, Cross Legal Services can review your lease and move-in facts and discuss next steps at (289) 443-0675.

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Understanding the Duty to Provide a Habitable Rental Unit That Is Ready for Occupancy

There are times when a landlord and tenant enter into a lease agreement prior to completion of construction, or renovation, repair, or other readiness, of the rental unit.  Frustratingly for the landlord, per section 20 of the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17, the landlord is prescribed the absolute duty to provide a ready for habitat rental unit.  Specifically, the Residential Tenancies Act, 2006 states:

Note: For immediate help, please contact Cross Legal Services by phone at: (289) 443-0675 to retain services or to discuss any specific questions that you may have.

Per section 20 (2) as above, the mandate of section 20 (1) applies even if the tenant was aware of the unfit state of repair; and accordingly, even if the tenant knew that the rental unit would be unfit for habitat on move-in day, such as where a status update or other notice was provided to the tenant in advance of the move-in day, the landlord remains obligated to provide the unit in a fit state of repair and the failure to do so is a default upon the landlord.  Furthermore, the tenant and landlord are unable to waive or agree to waive, the default whereas section 4 of the the Residential Tenancies Act, 2006 voids any such agreements as may conflict with the Residential Tenancies Act, 2006.

All of the above was deemed so by the Divisional Court within the case of Swan v. Liang, 2019 ONSC 1573, as an Appeal from a Landlord Tenant Board decision and wherein it was said:

As such, when a landlord enters into a lease with a tenant, even where the tenant may come to know, or even agree, that the rental unit will lack readiness on the move-in date, the obligation upon the landlord to provide a ready and fit unit remains regardless.

Available Remedies

Upon a finding that the landlord failed to meet the obligations to provide a unit fit for habitation as required by section 20 of the Residential Tenancies Act, 2006, the statutorily available remedies are prescribed in section 29 of the Residential Tenancies Act, 2006.  The available remedies include an abatement of rent, potentially up to one hundred (100%) percent, as well as reimbursement to the tenant for reasonably necessary expenses incurred by the tenant as a consequence of the lack of readiness of the rental unit such as the cost of temporary accommodations, temporary storage, among other things.  Indeed, these were the remedies awarded by the Divisional Court within the Swan case where it was said:

Interestingly, per paragraph 30 in the Swan case, the Divisional Court declined to award compensation for the increased cost of a substitute rental unit obtained by Swan.

Summary Comment

A landlord and tenant may enter into a lease and thereby establish a tenancy relationship in advance of actual readiness of the intended rental unit; however, when doing so, the landlord must accept the absolute duty to provide a fit and habitable unit by the scheduled occupancy (move-in) date.  The absolute duty to provide a fit and habitable unit is imposed by statute law, being the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17. Furthermore, the statute contains provisions restricting agreements that may attempt to alter the statute law. Accordingly, even if the tenant were to agree to provide leeway, such an agreement would be unenforceable.  Of course, if a tenant does agree to provide leeway, and does so despite such agreement being unenforceable, if the tenant fails to raise the issue of delay by the landlord in providing a habitable unit, the issue becomes moot; however, if the tenant chooses to raise the issue, even if raising the issue goes back on the word of the agreement to provide leeway, such a leeway agreement should fail and liability upon the landlord remains. As such, if the tenant should choose to pursue remedy for the failure of the landlord to provide a habitable unit as scheduled, liability in various forms of compensation may be imposed upon the landlord. The compensation may involve abatement of rent, release of the tenant from the lease, reimbursement for expenses incurred by the tenant, among various other things.