The Issue: Does the Residential Tenancies
Act, 2006 apply to leased recreational property?
The Answer: Yes it does.
In Matthews v. Algoma Timberlakes Corporation, 2010
ONCA 468, the Ontario Court of Appeal was asked to determine
whether the protections of the Residential Tenancies Act,
2006, S.O. 2006, c. 17 (the "RTA") extend to tenants
who lease recreational property. The issue transcends recreational
property and includes any rented residential property where the
tenant has a permanent residence elsewhere.
For at least two generations, a number of persons living in the
Sault Ste. Marie area had leased "sites" from the Algoma
Central Railway. As required by their leases, the tenants had
expended considerable time and effort to improve the sites with
permanent cabins. While the tenants and their families had
permanent homes elsewhere, they used the cabins for recreation and
family events, often for extended periods of time.
In December 2005, the respondent Algoma Timberlakes Company
("ATC") acquired the property on which the sites were
located. ATC sent notices to the tenants seeking significant rent
increases. ATC also tried to replace the tenants' leases with
"licences," which would have changed the tenants'
status to that of licensees.
A large number of the tenants responded by filing an application
to the Landlord and Tenant Board (the "Board") under
section 9 of the RTA for a determination that the RTA applied to
The Board dismissed the tenants' application, believing
itself to be bound by the Divisional Court's prior decision in
Wheeler v. Ontario (Ministry of Natural Resources) (2005),
25 O.R. (3d) 113 (Div. Ct.). In that case, the Divisional Court had
opined that leases for sites within a provincial park were not
protected by the former Tenant Protection Act, 1997.
An appeal by the tenants to the Divisional Court was dismissed.
In separate concurring reasons Justice J. deP. Wright observed:
It was argued before us that the appellants used their property
for "recreation" and not as "residences." While
this sort of distinction may make sense to lawyers, it is bound to
leave lay-people such as the appellants shaking their heads in
The tenants appealed the Divisional Court's decision to the
Court of Appeal which, by a unanimous decision, overturned the
decisions of both the Board and Divisional Court and held that the
tenants' sites were "land lease sites" protected by
The Court of Appeal indicated that the RTA is remedial in nature
and must be interpreted liberally to ensure the realization of its
objectives. As the RTA provides a broad definition of "rental
unit," and the tenants' cabins were clearly being used as
"rented residential premises," the cabins and their
underlying sites fell within the RTA's protections.
The Court of Appeal held that the prior comments in
Wheeler had been obiter and had not been the
result of a proper exercise of statutory interpretation.
Consequently, the Wheeler decision was not binding on the
Board or the Court.
The Court of Appeal further held that the Divisional Court had
erred in determining that because the tenants' sites were used
for recreational purposes, they were not residential. The Court
noted that if the Divisional Court's interpretation were to
prevail, a person who rented premises while residing elsewhere
could not be protected by the RTA.
The Court of Appeal's decision is consistent with the
Divisional Court's prior decision in Putnam v. Grand River
Conservation Authority (2006), 210 O.A.C. 291. Both cases
stand for the proposition that, where cottage or cabin
establishments are at issue, the RTA only excludes those cottages
or cabins that are operated analogous to rooms in a hotel, seasonal
campsite or bed and breakfast. Where the cottage or cabin is a
permanent structure constructed on lands leased year-round by the
tenant, the cottage or cabin is a "land lease home" and
the tenant is entitled to the protections of the RTA.
ATC has sought leave to appeal the Court of Appeal's
decision to the Supreme Court of Canada.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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