The $15,000 "Renoviction" Mistake: A Lesson for Ontario Landlords

A recent conviction in Oshawa serves as a stark reminder: in Ontario’s highly regulated rental market, "ignorance of the law" is an expensive excuse.

The case involves an Oshawa landlord who was recently fined $15,000 (plus a $3,750 victim fine surcharge) for violating the Residential Tenancies Act. The charge? Failing to afford a tenant the Right of First Refusal.

What Happened?

The landlord issued a notice to terminate a tenancy for the purpose of extensive repairs and renovations (commonly known as an N13 notice). The tenant did what the law allows: they provided written notice before moving out, stating they intended to exercise their right to move back into the unit once the work was finished.

The landlord rented the newly renovated unit to a different person at a higher price. This move led to a guilty plea in the Durham Region court and a total financial hit of nearly $19,000.

High Critical Risks

For landlords and property managers, this case highlights three critical risks to stay clear of:

1. Provincial Fines: These are provincial offences. Corporations can face fines up to $250,000, and individuals up to $50,000. It is noteworthy that these fines are scheduled to be increased to double the current amounts, respectively.

2. Civil Liability: Beyond the fine paid to the province, the LTB can order a landlord to pay the former tenant the difference in rent for one year, moving expenses, and general compensation.

3. Reputational Damage: Convictions are public record. A history of RTA violations can damage your standing in the community.

How to Protect Your Investment

To avoid these types of "preventable" fines, landlords must follow the strict procedural requirements of the RTA:

• Understand The Right of First Refusal: If a tenant gives you written notice that they want to return after an N13 renovation and complies with all the legal requirements, you must offer them the unit at the same rent they were paying before.

• Documentation is Key: Always keep a paper trail of your communications. If a tenant waives their right to return, get it in writing.

• Consult a Professional: The cost of retaining a well-versed licensed paralegal for a matter is typically a fraction of a $15,000 fine.

Final Thought

The Ontario rental market is a business, and like any business, it requires compliance with provincial laws. This Oshawa case highlights the importance of taking proactive measures to ensure that as a landlord you fully understand your obligations under the law to prevent very costly mistakes.

Are you navigating a complex tenancy issue? Don't risk a five-figure fine.

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This article provides general legal information and does not constitute legal advice. For advice specific to your situation, consult a licensed legal professional.