June 10, 1998
To: Urban Environment and Development Committee
From: Commissioner, Urban Planning and Development Services
Subject: Vital Services in Rental Residential
Properties (City Wide)
Purpose:
Report submitted for information, to address issues of
enforcement regarding vital services where a landlord who is
responsible for the payment of utility bills in a rental
residential property defaults on that obligation.
Funding Sources, Financial Implications and Impact
Statement:
In the event that Council chooses not to adopt the
recommendation below, and instead chooses to enact a Vital
Services By-law then that action would require the reversal of
Councils previous budgetary decision in order now to commit
funds to the staffing and administration of a vital services
program in the amount of $60,000 for 1998 and $120,000 annualized
thereafter.
In addition, historically the former City of Toronto has
committed funds ranging from $500,000 to $1,000,000 annualized to
the restoration of utilities in rental residential properties.
These funds were recoverable as being collectible through the
municipal realty tax process, as the City of Toronto Act provided
for. Any future funds to be expended by the City to restore such
utilities under a Vital Services By-law would be at great risk of
being un-recoverable, given that the enabling legislation
doesnt provide for such funds to be placed on the tax
rolls. The current legislation provides for a lien to be placed
against the property and/or the City to have tenants pay rents
directly to the City.
Recommendation:
It is recommended that:
the City of Toronto NOT enact a vital services by-law under
authority of the Tenant Protection Act, given the expected high
cost of its administration and potential for financial risk to
the City.
Background/History:
Existing municipal standards regulations throughout the new
City provide for a range of options in addressing the issue of a
landlords obligation to maintain vital services in rental
residential properties.
Current regulations which exist under authority of the
Planning Act set out an owners responsibility to ensure
that vital services such as utilities are maintained for
residential tenants. A breach of that obligation is an
enforceable offence. All City of Toronto districts, with the
exception of the former City of Toronto, have municipal standards
regulations enforced under the authority of the Planning Act.
Current regulations within the former City of Toronto, under
authority of the City of Toronto Act, set out owner obligations
similar to the above but also provide authority for the City to
restore utility services where an "urgent hazard" is
considered to exist and to re-coup such monies by placing
expended amounts directly on the tax roll to be collected in a
like manner as municipal taxes. This program has been
administratively costly to run and has been targeted to be
discontinued as part of the budget process.
At the present time a staff group is working toward drafting
harmonized municipal maintenance standards that will be
applicable to the entire new City. The enabling legislation for
such new regulations will come under the authority of the
Building Code Act. On November 28th, 1997, Royal
Assent was given to the Tenant Protection Act which serves to
consolidate, replace and supercede numerous existing acts which
deal with tenant issues, including the enactment of municipal
maintenance standards and by-laws regarding vital services. The
Tenant Protection Act is proclaimed as effective and in force
June 17th, 1998.
Comments:
The Tenant Protection Act amends the Building Code Act which
becomes the new enabling legislation for municipal maintenance
standards. The Tenant Protection Act also incorporates the former
provisions of The Municipal Amendment Act (Vital Services) that
allows a municipality to choose to enact a by-law to authorize
the restoration of utilities where a landlord defaults on payment
of utility bills to rental residential properties. This authority
requires that a lien be placed on the title of the property, and
allows the municipality to have tenants direct rents to the City
until the debt is repaid. This process effectively would appear
to make the municipality a quasi-landlord in ensuring that
outstanding rents are paid. In addition, there is no reasonable
guarantee that monies expended by the Municipality to restore
utilities would, in fact ever be re-couped. This process would
likely serve to be very labour intensive and costly to run, which
may be the reason that to date only three Ontario municipalities
have previously chosen to enact a municipal vital services
by-law.
Information obtained from the City of Ottawa who currently
administer a vital services by-law indicate that such a program
is very time-consuming, administrative and costly in terms of
staff time and resources. It is uncertain whether, once the
amalgamation of Ottawa-area municipalities occurs, a vital
services program will be maintained given that the municipalities
around the existing City of Ottawa do not administer such a
program. As is the case in most Ontario cities, the
municipalities surrounding Ottawa have not chosen to pursue a
local vital services by-law.
The Tenant Protection Act sets up a Provincial Tribunal
process to address tenant concerns where a municipality has no
maintenance standards by-law, and also to enforce vital services
provisions that are directly contained in the Act requiring a
landlord to ensure that vital services such as utilities are
provided. Ministry staff have confirmed that, while a fee is
chargeable under the Tenant Protection Act to municipalities
where the Provincial tribunal enforces maintenance standards, no
fee is chargeable to a municipality where the provincial tribunal
enforces vital services. The Act includes Provincial
responsibility to directly receive tenant complaints regarding
vital services matters and enforce resulting Provincial orders
through the courts. This new Act places the onus of evidence
collection and complaint reporting directly into the hands of
affected tenants, who would then bring their vital services
issues forward to the Provincial tribunal for
prosecution/enforcement.
Conclusions:
Given that the current City of Toronto budget process is
seeking to discontinue the former City of Torontos
"urgent hazard" program due to the cost of
administering it, City Council may similarly want to consider not
undertaking an even more bureaucratic and financially risky
process in the restoration of utility services under a vital
services by-law. It is suggested that City Council seek to rely
instead on general enforcement of municipal standards regulations
through prosecution by the City as necessary, as well as
procedures which are currently being put into place under the
Tenant Protection Act for tenants to seek prosecution activity
through the Provincial Tribunal specifically regarding vital
services.
Contact Name:
Judi McBurney, Technical Advisor, Buildings Division
Toronto City Hall
Phone: 392-7963
Fax: 392-0677
VIRGINIA M. WESTHarold Bratten
Commissioner Director
Urban Planning and Development Services Municipal Standards
Division