THE RESIDENTAL LANDORD AND COMMON HARDSHIPS

Politics and ideology continually influence the law regarding residential tenancies in Ontario, largely because of the nature of the subject. Whenever there is a major change in government in Ontario, we can expect that residential tenancies laws are changed, administered and adjudicated upon. Consequently, there follows statutory changes, in substance and in process. This shifting legislative landscape serves political interests well, but for landlords and tenants it could be the deadly grounds of a legal minefield

Besides the statutes which directly regulate landlord and tenant relationships, residential landlords have to keep track of changes to collateral legislations affecting residential tenancies usually driven by evolving public policies. Presently “burning” topics include statutory provisions in the Ontario Fire Code; licensing provisions in the Municipal Act; the Accessibility for Ontarians with Disabilities Act; the Ontario Human Rights Code;  and the Electricity Act.  In view of this, owners of multi-residential property are almost all the time seeking legal help, some of which are formidably challenging.

In June 2004, a policy directive was issued stating that all residences in Ontario, including apartments, be electrically “smart metered” by December of 2010. A product of a technological advancement in the past decade, a smart submeter is a component which can be affixed to the existing electrical system of most apartment buildings to measure electricity consumption within individual suites. This measurement can be carried out on an hourly and daily basis and it is possible for consumption to be billed to individual tenants.

The idea behind smart submetering in apartments is to conserve electricity. At present, electricity is included in the rent, and therefore tenants would be more likely to conserve if they are responsible for payment of their own electricity consumption. This fact is well-established as consumption levels drop by more than 30% in most instances. In the Province of Ontario, a major property management company was given its “Conservation Award” in recognition of the fantastic job the company was doing by installing smart submeters and conserving electricity in apartment buildings. Proudly issued by Ontario’s Chief Conservation Officer, an agency of the Ontario Energy Board (OEB).  In 2007, the Province enacted the Residential Tenancies Act (RTA) but never proclaimed into force sections 137 and 138 of the RTA, both of which anticipated the implementation of electricity smart submetering and government conservation policies. All that time, landlords, were anticipating conservation policies and formal legislative regulation, submetering existing buildings and relying on provisions of the RTA and provisions of their leases to support the withdrawal of en-suite electricity as a service included in the rent, with rent reductions as compensation for the withdrawal of the facility. Simply charging separately for en-suite electricity consumption from commencement of the tenancy was not a “landlord tenant” issue.

Then, tenant advocacy groups became concerned that smart submetering was prejudicial to tenants. However, landlords continued to implement smart submetering through 2008 and 2009.  The strife more or less ended when the OEB, apparently oblivious to the faux-pas stated above, determined that electricity smart metering is “unauthorized” for tenants living in apartments with fee simple tenure (where the landlords owned then entire apartment building or multi-unit complex) and only permitted for tenants living in apartment buildings subject to condominium tenure (landlord owns the individual dwelling units separately).

The upshot is one set of submetering rules for landlords and tenants of condominium tenancies and another for tenants in fee simple tenured apartments. As that did not cover all the possibilities, another set of rules apply if the apartment units were submetered prior to November 3, 2005 or if they have always been separately metered and supplied by the local electricity supplier. It would appear that the Province of Ontario is now in the process of drafting new legislation to address a further set of rules for electricity submetering in apartment buildings that are fee simple tenured. Pending formal adoption of that legislation, landlords face uncertainty, even in those cases where they obtain consent of the tenants to smart submetering under interim rules imposed by the OEB. Now and most likely in the future, the rules applicable to condo-tenured tenancies are far more preferable to those applicable to apartment tenancies, thereby discouraging the installation of smart meters in apartment tenancies and nullifying energy conservation. The real impact of the implementation of smart submetering is not all that cut and dry, as would be seen from an excerpt from the Toronto Star on March 15, 2008.

“For the most part, tenants whose buildings have switched to Smart Meters, are realizing savings, says Brad Butt, president of the Greater Toronto Apartment Association. “We actually find that 50 to 70 per cent of residents break even or do better,” says Butt. “They’re seeing a bill every two months and they know exactly what they’re using and they change their behaviour.”

Smart Meters are designed to encourage people to alter their lifestyles to reduce electricity consumption during daytime hours when businesses increase the demand on the system.

Savings can be significant for those who are able to turn air conditioners off during the day when they’re at work, or do laundry late in the evening.

However, some advocacy groups working on behalf of disadvantaged tenants say Smart Meters might not be beneficial for everyone. Mary Todorow, research and policy analyst for the Advocacy Centre for Tenants Ontario (ACTO) says low-income tenants could be at a disadvantage if required to pay their own electrical bills. While in support of the Smart Meter program, ACTO has been lobbying the government to make changes to the roll-out inorder to protect disadvantaged tenants.

In a presentation Todorow made to the Justice Policy Committee on behalf of the ACTO in February 2006, she noted that tenants have no control over the age of appliances in their units, which could include energy-gobbling refrigerators, washing machines and dryers. Nor can they control the insulation of their units or seals around their windows. Tenants who are elderly or disabled might spend most of their time at home and need to use air conditioning, heating and other utilities at higher levels, thus increasing their expenses under the Smart Meter program.

On the other hand, Butt’s experience is that “most of the residents who have their own meter and pay it directly actually wind up being far more conscientious,” says Butt. “You can look at the draw for a whole building and it goes down 20 to 25 per cent and we know why that is – it is residents in their units adjusting their behaviour.”

Don’t make a move before fully understanding your rights and obligations. For more information and assistance regarding your rights as a landlord or tenant, or Real Estate law in Ontario, contact Levy Zavet PC in Toronto, Ontario today.