Canada: Unlicensed Rooming Houses: What’s A Condo To Do?

Last Updated: May 2 2014
Article by Megan Mackey

Rooming houses have been in the news recently due to the three-alarm fire which broke out in a rooming house in Toronto's Kensington Market area. The illegal rooming house had 12 tenants on the second floor, four units on the third floor, and only one exit at the front door. The fire killed two occupants and sent 10 people to hospital, including two children.

Unlicensed rooming houses are operating in many condominiums in Ontario. We recently toured a 4-bedroom townhouse which had been converted into a 12-bedroom rooming house. While a 12-bedroom condominium unit may be hard to picture, unscrupulous unit owners with an imagination and a desire to collect large sums of rental income each month can create rooming houses that shock seasoned property managers.

As any board member will tell you, boards of directors are busy dealing with a laundry list of issues. Rooming houses are sometimes seen as low priority and can end up being ignored or sitting on the "to do" list for months or even years. Some corporations do not take steps to deal with possible rooming houses because they do not know what can be done or they are worried about possible legal costs.

Rooming houses create health and safety risks for all corporation residents, not just those residing in the unit. If a corporation fails to act on a known rooming house, it could expose the corporation to liability. Rooming houses should be taken seriously and addressed immediately.

Your corporation may already be aware of illegal rooming houses. Often corporations regularly inspect units for issues relating to water leaks or fire safety. In some cases, building superintendents and contractors are aware of rooming houses but this information is not passed on to management or board members. If you suspect rooming houses may be operating in your corporation, ask building staff and management if they have seen any alterations or noticed anything suspicious. In some cases a comprehensive inspection of the entire corporation may be necessary.

If your corporation suspects that some of the units have been converted to rooming houses, we recommend taking the following steps:

(1) Confirm whether rooming houses are permitted in the corporation. Check the corporation's documents to determine requirements for occupancy and leasing, and review the local municipality's occupancy standards by-laws.  In our experience we have never seen a situation where rooming houses are permitted. If they are permitted, make sure they are licensed.

(2) Determine what is going on in the unit and gather evidence of any illegal rooming house. If enforcement proceedings are necessary, you will need direct first-hand evidence that a rooming house exists. The unit should be inspected, preferably by more than one person. Corporations are entitled by law to access units and owners cannot deny entry.  Look for rooming house evidence such as locks on bedroom doors, fridges, or cabinets. Take pictures. Try to identify and interview the occupants.

(3) Have someone speak to the owner to try to eliminate the rooming house without legal action. Some owners choose to sell their units when they learn that management has discovered the rooming house and is contemplating enforcement proceedings.

(4) Send a formal demand letter asking the owner to dismantle the rooming house and give 30 days minimum as a time deadline. Letters can come from the board, management, and or legal counsel and should include a warning that after the 30 days, inspection of the unit will take place to ensure compliance.

(5)  If the rooming house continues to operate, corporations should initiate the mediation and arbitration procedures mandated by the Condominium Act.

Corporations cannot ignore rooming houses. By taking steps to eliminate illegal rooming houses, corporations will be protecting the owners and residents from health and safety risks as well as from legal liability.

Newsletter Tip #1 Management Records

The property manager's file is sometimes the corporation's only evidence at a hearing on enforcement issues or contract disputes and it can make or break a case, especially where there are conflicting stories. We urge all property managers to take the time to respond/investigate matters, and document everything in a dedicated file for each unit, which can be easily forwarded to an insurer or legal counsel should the need arise. The completeness of the file will make for a better outcome.

Newsletter Tip #2 Managing Environmental Matters 

Managing a building with environmental issues poses unique challenges for a condominium corporation, its board of directors, property managers, and even the management company.  Issues can arise because the building was built on former industrial land with remnant contamination, because there are older building materials that aren't used today, underground tanks rupture, or a host of other reasons. Management companies would be wise to seek advice from legal advisors with specific environmental expertise when dealing with these issues. A condominium corporation's general legal advisors may have no experience in these issues, and while they may provide great advice generally, most would be well out of their depth on environmental issues.   Ideally, lawyers assisting you in this should be a certified specialist in environmental law and recognized for their environmental expertise.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Megan Mackey
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