Frustrated Tenancies:

Question: If my rental unit is uninhabitable due to fire, flooding, or condemnation in Ontario, when does the doctrine of frustration end the tenancy, and what can I do to protect my rights?

Answer: In Ontario residential tenancies, the doctrine of frustration may apply when an unforeseeable force majeure event (like a fire, major flood, or catastrophic damage) makes the unit physically unoccupiable, or when the premises are officially condemned, causing the tenancy to end by operation of law under section 19 of the Residential Tenancies Act, 2006 (S.O. 2006, Chapter 17).  As a result, the usual landlord and tenant obligations can cease, including security-of-tenure protections such as any first right of refusal that may exist for short, quickly completed repairs, but not for lengthy restorative periods (see AS v. CJM, TSL-05808-10 (Re), 2010 CanLII 58985 and Y.Y. v. A.T. and L.W., TEL-32649-12 (Re), 2013 CanLII 51226).  If you are impacted, Mole Legal Services can help you understand whether frustration likely applies, what steps to take with documentation, notices, and timelines, and what recourse may still be available for your situation in Ontario.  Contact (647) 709-5157 to book a focused paralegal and property management consult.

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Understanding When the Doctrine of Frustration Applies to a Residential Tenancy and What Recourse Does a Tenant Have?

Certain events, such as a major fire, flood or serious water damage, tornado or windstorm, or some other unforeseen circumstances, including changes in law, may arise with the result being that occupancy of the residential premises becomes impossible.  When the tenancy becomes impossible due to an unforeseeable outside force, sometimes called a force majeure event, the contractual obligations of both the landlord and the tenant, whether during a lease period or after the tenure converts to a month-to-month, are deemed frustrated and the tenancy arrangements come to an end as per section 19 of the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17 where it is said:

Note: Please contact Mole Legal Services by phone at: (647) 709-5157 to discuss any specific questions that you may have.

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.