Frustrated Tenancies:

Question: If my rental unit is uninhabitable after a fire or condemnation in Ontario, does the doctrine of frustration end my tenancy and what can I do next?

Answer: In Ontario, a sudden, unforeseeable event like a major fire, flood, serious water damage, or a municipal condemnation that makes the rental unit impossible to occupy can trigger the doctrine of frustration, which ends the tenancy by operation of law under Residential Tenancies Act, 2006, S.O. 2006, Chapter 17, s. 19 and the relevant frustrated contracts principles.   In practice, this may stop “security of tenure” rights such as any first right of refusal to return when repairs are extensive or there is no reasonable return date, which is why outcomes can differ from cases like Y.Y. v. A.T. and L.W., 2013 CanLII 51226, where lengthy repairs meant no foreseeable date to return.   If you are locked out, served with an order saying occupancy is prohibited, or the landlord is treating your tenancy as ended, Vagans Legal can help you assess the timeline, request the proper documentation (municipal orders, repair estimates, and notices), and determine whether you have next-step recourse at the Landlord and Tenant Board or related proceedings; call (416) 473-8472 to get started.

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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

In some circumstances, premises may become unoccupiable when ordered condemned by the local municipality such as occurred in the case of AS v. CJM, TSL-05808-10 (Re), 2010 CanLII 58985 wherein it was stated:

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.