Frustrated Tenancies:

Question: What can a tenant do in Ontario if their residential unit becomes uninhabitable due to a major fire, flood, or condemnation, and the landlord says the tenancy is “frustrated” under the Residential Tenancies Act?

Answer:   If your rental unit becomes physically unoccupiable due to an unforeseeable event like serious fire or flood, or a municipal condemnation order, the tenancy may be treated as frustrated under Residential Tenancies Act, 2006, S.O. 2006, c. 17, s. 19, meaning the parties’ obligations can end by operation of law and security-of-tenure protections like a first right of refusal may not apply, but timing matters because if repairs can be completed within a reasonable period, the tenancy may not be frustrated and some return rights may be argued, including in outcomes described in cases like AS v. CJM, 2010 CanLII 58985 and Y.Y. v. A.T. and L.W., 2013 CanLII 51226; for tailored next steps and to protect your options with evidence review, communications with the landlord, and any necessary legal filings, Woodcock Legal Services can help, call (613) 334-6721 for professional legal services in Ontario.

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 perhaps surprisingly, even when premises become condemned due to neglect, meaning a failure of maintenance, by the landlord, a frustration of the tenancy occurs resulting in a termination of the tenancy agreement, whether as a lease agreement or a statutory month-to-month agreement, when the rental unit is 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

An unforeseeable destructive event, often referred to as a force majeure, that renders a rental unit unoccupiable for an unknown length of time, generally, results in a frustration of the tenancy agreement, regardless of whether the event occurs during a lease period or during a month-to-month period. When such an event rises to the level of a frustration, the obligations of both landlord and tenant end and the tenancy arrangement, including the security of tenure, end.