New Co-op Housing Laws: Less than meets the eye

The Non-profit Housing Co-operatives Statute Law Amendment Act, 2013 (Bill 14) unanimously passed Third Reading on September 24, and received Royal Assent on September 26. The main feature of the Act is that it amends the Co-operative Corporations Act and the Residential Tenancies Act to allow co-op housing evictions to proceed at a statutory tribunal, the Landlord & Tenant Board, rather than before the courts. It is expected that the amendments will come into force within a period of 6 to 9 months, giving the Landlord & Tenant Board the opportunity to absorb the influx of new cases. The Ministry of Municipal Affairs and Housing has itself anticipated a significant increase in co-op eviction cases that will be heard by the Landlord & Tenant Board.

The Right Honourable Linda Jeffrey, the Minister of Municipal Affairs and Housing, stated on the eve of the Bill’s passage:

“One of our government's top priorities is creating a fairer Ontario. With today's passage of Bill 14, we have provided an alternative to costlier court processes for co-ops [sic] residents and improved access to an appeal board.”

This is not strictly accurate. In fact, “co-op residents” will have no “alternative to costlier court processes” under the new law. Whereas co-op housing providers are now allowed to file eviction applications using the quicker and cheaper alternative of the Landlord & Tenant Board, co-op residents are not allowed to use the same process to raise any issues that they might be facing. Therefore, any maintenance, repairs, harassment or other complaints that co-op residents may have will still need to be brought to the courts for common law remedies. It is only co-op housing providers that have gained the right to access an “alternative to costlier court processes”. On this point and others, we continue to have concerns about the new co-op eviction process that we have highlighted in our previous blogs, Co-operative Housing Reform: The Worst of Both Worlds and Co-operative Housing, Evictions and Rent-Geared-to-Income (RGI) Subsidies.

One benefit of the eviction process occurring at the Landlord & Tenant Board may be that much of the existing eviction caselaw developed by the courts may lose its relevance. Given the costs involved in the court eviction process and sparse legal resources available to most co-op residents, the caselaw in this area has primarily developed in a one sided manner, where talented and experienced co-op lawyers face mostly unrepresented co-op residents. This has led to a body of caselaw that is not sympathetic to co-op residents facing evictions. The courts have held that their job on a co-op eviction application is not to determine the facts but to simply review whether an eviction decision made by the co-op’s Board of Directors was reasonable and procedurally fair. A great amount of deference is shown to the Directors’ decision due to the “democratic” nature of co-ops, and courts will rarely intervene to overturn an eviction decision.

However, under a new section (not yet in force) of the Residential Tenancies Act, this situation may change. S. 94.9 states that “the [Landlord and Tenant] Board shall not inquire into or make any determination as to whether the member’s membership and occupancy rights were properly terminated under section 171.8 of the Co-operative Corporations Act.” This section would seem to necessitate that the Landlord & Tenant Board undertake a fresh inquiry in any application before it. It would allow the Landlord & Tenant Board to treat the co-op’s eviction application as a new or de novo hearing where the co-op has to prove its case on the evidence rather than as simply arguing that the eviction decision made by the co-op Board of Directors should be upheld.

However, only time will tell how the Landlord & Tenant Board and appellate courts will actually interpret this section. A point to note is that there is nothing inherent in the language of the Co-operative Corporations Act that restricts the courts role to reviewing the co-op Board of Directors’ decision rather than determining the facts on its own. The court has limited its own role based on the jurisprudence that developed over the years. Co-op members and their advocates should remain vigilant lest unsympathetic interpretations carry the day at the Landlord & Tenant Board as well.