Expense vs. Problem


As per words of a friend of mine, “If the problem can be solved with money, it is not a problem, it is only an expense.” However, if the expenses and costs exceed the revenues from lease of the property you rent out, then it might be already a problem.
When you buy an investment property with the view to rent it out, you want that the income from renting the premises covers all expenses for maintenance, payment of interest on the loan, and provide you with some “pocket money”. Typically, the cost of operating a rental property is similar to that you incur when carrying for the house you live in and, sometimes, higher.
Let’s look at the Residential Tenancies Act, 2006 Act, which regulates residential tenancies in Ontario and specifically its section 20 (1), (2) which states the following: “A landlord is responsible for providing and maintaining a residential complex, including the rental units in it, in a good state of repair and fit for habitation and for complying with health, safety, housing and maintenance standards’.
The wording of this provision, at a glance, is too broad and abstract.To understand its significance, let’s take a life example. A tenant applied to the Landlord and Tenant Board (‘LTB”) for an order determining that the landlord failed to meet his maintenance obligations under the Residential Tenancies Act, 2006 or failed to comply with health, safety, housing or maintenance standards and that the landlord substantially interfered with the reasonable enjoyment of the rental unit or residential complex by the Tenants or by a my a member of their household. The tenant asked the Board to make an order against the landlord for full compensation for the whole period of his residence, as well as additional monetary compensation for general damages and medical treatment for several years in the future. The issue raised was the mold. Yes, yes, the most common mold that lives quietly in homes for decades and does not bother anyone,…. until this very mold becomes an incredibly serious problem for both the tenant and consequently the landlord too.
How to avoid such a claim? In case all venues to resolve the issue, including negotiations, have been exhausted and the claim has already been initiated and filed with the Board, how the landlord can get protected from liability or at least to reduce the extent of it?  What the tenant has to do to address the issue to get it resolved.The case law indicates that liability is not imposed on the landlords automatically.  There are specific legal tests that the tenant who usually puts the allegations forward must satisfy (on the balance of probabilities) to get full or partial compensation. For example, failure to fix the roof in a timely manner which, in its turn, became a cause of moisture and as a result the cause of mold does not impose liability on the landlord automatically. There are many other factors that are to be taken into account by the Board in a decision-making process. Among those factors are the severity and nature of the problem, how long it has been going on, whether there were previous or pre-existing problems, whether  or not the tenant advised the landlord of the problem, whether the landlord responded to the concern in a reasonable and timely manner, whether the tenant denied the landlord access to the unit to complete the repairs, whether the repair is required  as a result of damage caused by the tenant or one of the tenant’s guest, whether the landlord conducts regular inspections of the complex and/ or rental units, whether the air quality in the entire rental unit was compromised and whether the entire rental unit was rendered unfit for habitation because of the presence of mold as well as whether the tenant made any attempt to mitigate his or her damages and which steps have been taken if any and other factors the Tribunal considers relevant.In cases where the problem is not apparent and the landlord is making efforts and take measures to address the issue within reasonable time, the courts do not impose liability on the landlord without proof of the landlord’s fault and negligence. In other words, the owner of the property cannot be found liable to his or her tenant for every problem that the tenant discovers without proof that the problem resulted from the landlord’s fault or negligence.
So, if after the tenant makes the landlord aware of the problem which has not arisen due to the negligence of the landlord and the latter has taken appropriate measures and addresses complaints in a reasonable and timely manner, the landlord should be released from liability to the tenant.
This does not mean that the landlord is not responsible for the structural integrity of the rental property. Landlord and Tenant Board meticulously examines each situation individually and on merits. However, there is common approach that the Board follows. The Board would ask, whether the landlord had preventative maintenance program in the house to prevent the occurrence of this problem; whether the landlord promptly and within reasonable time addressed the complaint.  In case of compliance with these requirements, as a rule, the Board rejects the claim for reduction of the rent or compensation.
Back to mold. In order that the LTB made the decision for the tenant, the latter one will also has to prove the damage, causation, negligence of the landlord , which means that, in its turn, the tenant will also have to determine the cause and the source of the mold, not only the fact of its presence. As we know there can be infinitely many sources of mold, ranging from stagnant air of an unventilated room to leaking roofs and faulty plumbing. The responsibility for the appearance of mold may be imposed on either party, the landlord or the tenant. Further, in order to obtain compensation for the damage caused to health, the tenant will not only have to prove that this type of mold is a threat to health in general, but also  will have to establish the damage on the facts and causation  between the presence of mold and the inflicted damage to specifically his or her health.

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