Can a Landlord Be Held Liable For Failure to Provide a Habitable Unit By the Scheduled Occupancy Date?
The Residential Tenancies Act, 2006 Prescribes a Duty Upon a Landlord to Provide a Fit For Occupancy Rental Unit By the Scheduled Move-In Day Failing Which the Landlord May Be Liable. This Mandate Remains Even If the Tenant Knew and Agreed That Readiness Would Be Delayed.
Similar Questions About Delayed Occupancy Issues Include:
- If a Rental Unit Is Not Ready On Move-In Day, Can the Landlord Be Held Responsible?
- Can a Landlord Reschedule a Move-In Day If Renovations Need More Time?
- Is a Landlord Required to Ensure An Rental Unit Is Ready By the Move-In Date?
- Is a Landlord Allowed to Delay the Move-In Day If Renovations Are Delayed?
- If the Landlord Fails to Have a Rental Unit Ready For Move In Day What Happens?
Understanding the Duty to Provide a Habitable Rental Unit
There are times when a landlord and tenant enter into a lease agreement prior to completion of construction, or renovation, repair, or other readiness, of the rental unit. Frustratingly for the landlord, per section 20 of the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17, the landlord is prescribed the absolute duty to provide a ready for habitat rental unit. Specifically, the Residential Tenancies Act, 2006 states:
Landlord’s Responsibility to Repair
20 (1) 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.
As per section 20 (2) shown above, the mandate within section 20 (1) remains applicable even in in circumstances where the tenant was informed and aware of the uninhabitable state of repair and expected inability for the landlord to provide a habitable unit by the scheduled occupancy date. Accordingly, the duty to do so as prescribed upon the landlord remains along with the potential for liabilities upon a failure to deliver a habitable unit in accordance to the agreement. Additionally, a landlord and tenant are unable to circumvent, via a waiver or other secondary agreement, the prescribed mandate within the Residential Tenancies Act, 2006 whereas section 4 of the the Residential Tenancies Act, 2006 voids any agreements conflicting with the Residential Tenancies Act, 2006 mandates.
The above concerns were reviewed and decided upon by the Divisional Court in Swan v. Liang, 2019 ONSC 1573, as an Appeal decision subsequent to a Landlord Tenant Board determination. Specifically, the Divisional Court said:
 The Board made a number of errors of law. First, in its disposal of the application, the Board improperly fixated on the notion that the tenant knew of the deficiencies from his visit on April 4 and failed to consult his wife before entering into the lease. The Board improperly considered the tenant’s knowledge of the state of the unit prior to taking possession. Subsections 20(1) and (2) of the Residential Tenancies Act clearly indicate that the landlord is responsible to ensure that a residence is fit for habitation and in good state of repair from the outset of the tenancy. Subsection 20(2) makes it clear that the landlord is not relieved of this obligation, even if the tenant knows that a state of non-repair exists when the lease is first entered into.
As such, when a landlord enters into a lease with a tenant, even where the tenant may come to know, or even agree, that the rental unit will lack readiness on the move-in date, the obligation upon the landlord to provide a ready and fit unit remains regardless.
Upon a finding that the landlord failed to meet the obligations to provide a unit fit for habitation as required by section 20 of the Residential Tenancies Act, 2006, the statutorily available remedies are prescribed in section 29 of the Residential Tenancies Act, 2006. The available remedies include an abatement of rent, potentially up to one hundred (100%) percent, as well as reimbursement to the tenant for reasonably necessary expenses incurred by the tenant as a consequence of the lack of readiness of the rental unit such as the cost of temporary accommodations, temporary storage, among other things. Indeed, these were the remedies awarded by the Divisional Court within the Swan case where it was said:
 Given the finding that the house was not fit for habitation and the parties’ agreement that the tenancy would be terminated, we are satisfied that the tenant is entitled to the return of his deposit and prepaid rent of $2,175. The landlord agreed that the last month’s rent should be returned. The tenant was unable to use the premises safely pending the repairs (other than storage in the garage, for which he offered to pay $100). The tenant should receive an abatement of the rent for April, given the finding and the clear evidence that the premises were not fit for habitation by the tenant and his family.
 In addition, we are satisfied that the tenant is entitled to reimbursement for his hotel cost of $134.47 and utilities of $155.64 paid for this rental unit that he could not occupy, for a total of $290.11 for out-of-pocket expenses. We acknowledge that the tenant was able to store some of his property on the premises for several weeks at a cost of $100, and we take this into consideration in determining the tenant’s entitlement to compensation.
 We would not award any amount for the higher rent at the new premises.
Interestingly, per paragraph 30 in the Swan case, the Divisional Court declined to award compensation for the increased cost of a substitute rental unit obtained by Swan.
A landlord and tenant may enter into a lease and thereby establish a tenancy relationship in advance of actual readiness of the intended rental unit; however, when doing so, the landlord must accept the absolute duty to provide a fit and habitable unit by the scheduled occupancy (move-in) date. The absolute duty to provide a fit and habitable unit is imposed by statute law, being the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17. Furthermore, the statute contains provisions restricting agreements that may attempt to alter the statute law. Accordingly, even if the tenant were to agree to provide leeway, such an agreement would be unenforceable. Of course, if a tenant does agree to provide leeway, and does so despite such agreement being unenforceable, if the tenant fails to raise the issue of delay by the landlord in providing a habitable unit, the issue becomes moot; however, if the tenant chooses to raise the issue, even if raising the issue goes back on the word of the agreement to provide leeway, such a leeway agreement should fail and liability upon the landlord remains. As such, if the tenant should choose to pursue remedy for the failure of the landlord to provide a habitable unit as scheduled, liability in various forms of compensation may be imposed upon the landlord. The compensation may involve abatement of rent, release of the tenant from the lease, reimbursement for expenses incurred by the tenant, among various other things.