Court File and Parties
CITATION: Kritz v. City of Guelph, 2016 ONSC 6783
COURT FILE NO.: 16-253
DATE: 20161123
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
James Kritz
Applicant
– and –
City of Guelph
Respondent
Mark Flowers, Kyle Gossen, for the Applicant
Patrick Harrington and Scott Worsfold, for the Respondent
HEARD: August 29, 2016
Justice Lemon
The Issue
[1] Mr. Kritz seeks a declaration that each of his four properties in the City of Guelph is not being used as a “Lodging House Type 1”, as defined in City’s zoning by-law. If successful on that issue, he seeks a mandatory order requiring the City to remove any references to the properties being lodging houses from its website or elsewhere under the City’s control.
[2] Mr. Kritz says that he does not operate a lodging house at any of the four properties. He says that he simply owns “dwelling units” as defined by the City’s by-laws. He rents them to groups of tenants, much like an extended family living in one house.
[3] The City says that he operates a lodging house as defined by the by-laws because he rents to a number of tenants in each house. If so, Mr. Kritz is required to either reduce the number of occupants in the residences or seek a minor variance. Further, if he is operating a lodging house, the City says that it must be inspected, approved and certified to be recognized as a lodging house under the by-laws.
[4] The answer to the issue is one of statutory interpretation and a review of the relevant case law; the parties have agreed on the facts to be applied. Mr. Kritz does not attack the validity of the by-law.
[5] Mr. Kritz acknowledges that such a declaration can only apply to the facts found in this application; how he uses the properties hereafter is for another day on another record. Further, effectively, he is asking for four declarations, one for each property.
The By-Law
[6] The City of Guelph’s, by-law No. (1995)-14864, Comprehensive Zoning By-law defines the terms relevant to this Application as follows:
“Lodging House Type 1” means any Place, including but not limited to a Dwelling Unit, that is used to provide 5 or more Lodging Units for hire or gain directly or indirectly to persons.
“Place” includes any land, Lot, Building, Structure, place or any part thereof.
“Dwelling Unit” means a room or group of rooms occupied or designed to be occupied exclusively as an independent and separate self-contained housekeeping unit including a house.
“Lodging Unit”, for the purpose of Lodging House Type 1 and Lodging House Type 2, means a room Used to provide living accommodation which does not have the exclusive use of both a kitchen and a bathroom.
[7] Redrafting those provisions using the relevant definitions, a “Lodging House Type 1” means any building or structure that is used to provide 5 or more rooms, used to provide living accommodation, which do not have the exclusive use of both a kitchen and a bathroom. That definition is not limited to a room or group of rooms occupied or designed to be occupied exclusively as an independent and separate self-contained housekeeping unit, including a house.
The Facts
[8] Both parties filed substantial materials on the application and cross-examinations were held on the filed affidavits. However, by the time the application was argued, counsel agreed that there were no credibility issues or factual issues to be determined.
[9] The materials and argument are full of suggestions that the opposite party is playing fast and loose with the requisite laws and treating the other unfairly. Neither trusts the other based on a long history of contact over these properties. I suspect that both have been correct at different times. However, I cannot make that determination on this evidence and I am not asked to. I do not see that the conduct of the City’s representatives is relevant to this issue. I do not see that the conduct of Mr. Kritz, other than as agreed, is relevant to the issues that I am to decide.
[10] I therefore invited counsel to file an agreed upon statement of facts and they agreed to do so. What follows has been cut from that document.
[11] Mr. Kritz owns or co-owns four properties in the City of Guelph. They are 111 Maple Street – Apartment A, 111 Maple Street – Apartment B, 108 Dublin Street North and 204 College Avenue West. Each of the properties is currently rented to a group of tenants.
[12] 111 Maple consists of two residential dwelling units in a single detached dwelling with an accessory apartment. Apartment A is a four-bedroom residential dwelling unit, which includes the front portion of the ground floor and the second story of the building. Apartment B is a five-bedroom residential dwelling unit, which includes the rear portion of the ground floor and the basement of the building.
[13] 108 Dublin is a six-bedroom residential dwelling unit in one half of a semi-detached dwelling.
[14] 204 College is a seven-bedroom residential dwelling unit in a single detached dwelling.
[15] Mr. Kritz is responsible for the management of the properties, including listing the properties for rent, meeting with prospective tenants, entering into tenancy agreements, and dealing with tenants as required.
[16] The properties are each zoned R.1B under the City of Guelph Zoning By-law (1995)-14846. The permitted uses include a Single Detached Dwelling and a Lodging House Type 1.
Tenancy at 111 Maple – Apartment A
[17] Apartment A of 111 Maple is currently rented to four university students. These tenants initially approached Mr. Kritz as a group to rent the unit. Two of the tenants had been renting another apartment from Mr. Kritz and advised him that they had decided to live with two other friends and were therefore interested in looking at four bedroom houses or apartments. The four tenants entered into a tenancy agreement dated January 15, 2015, for the period from May 1, 2015 to April 30, 2016.
[18] On January 14, 2016, the same four tenants in Apartment A entered into a further tenancy agreement for the period from May 1, 2016 to April 30, 2017.
[19] As there are only 4 tenants, the City agrees that Apartment A, standing alone, is not a lodging house. However, it is part of the same building as Apartment B which the City says is a lodging house.
Tenancy at 111 Maple – Apartment B
[20] Until recently, Apartment B of 111 Maple was rented to five university students who had approached Mr. Kritz as a group to rent the unit. They were referred to Mr. Kritz by a friend, who indicated that a group of five young men from his church were interested in renting a house together. The five tenants initially entered into a tenancy agreement dated January 17, 2015, for the period from May 1, 2015 to April 30, 2016.
[21] On January 16, 2016, four of the existing tenants, and one new tenant, entered into a further tenancy agreement for the period from May 1, 2016 to April 30, 2017. One of the original tenants would be doing a co-op placement, potentially in another municipality. As a result, the remaining tenants on their own initiative invited another friend from their church to live with them and jointly sign a new tenancy agreement for Apartment B.
Tenancy at 108 Dublin
[22] Until recently, 108 Dublin was rented to six university students. Five of these students initially approached Mr. Kritz in January 2014 as a group to rent the unit. The group advised Mr. Kritz that they had met in residence at university, formed friendships, and collectively decided to search for a house where they could live together. They signed a lease for the period from May 1, 2014 to April 30, 2015. One of the tenants later transferred to a different university. As a result, when it came time to renew the lease for May 2015 to April 2016, the remaining five tenants invited a friend who had previously lived with them to become a new tenant in 108 Dublin. These tenants vacated the property on April 30, 2016.
[23] A new group of six university students have been occupying 108 Dublin as of May 1, 2016. These tenants previously resided together in a house further from the university and wished to continue living together in a more central location. On January 17, 2016, the new tenants entered into a tenancy agreement for the period from May 1, 2016 to April 30, 2017.
Tenancy at 204 College
[24] 204 College was previously rented to seven university students, who initially approached Mr. Kritz as a group in January 2013. The seven friends advised Mr. Kritz that they knew each other from a combination of growing up together and attending camp together. Mr. Kritz accepted their application and they signed a lease for the period from May 1, 2013 to April 30, 2014. In the spring of 2014, when three of the tenants left, the remaining group of four tenants asked three other existing friends to live with them and become new tenants of 204 College. The tenants then signed a new tenancy agreement for May 2014 to April 2015. In the spring of 2015, two tenants graduated and the remaining group of five tenants replaced these two tenants with two existing friends. The tenants then signed a new tenancy agreement for May 2015 to April 2016. These tenants vacated the property on April 30, 2016.
[25] A new group of seven university students has been occupying the property as of May 1, 2016. These tenants became friends while living together in university residence and collectively decided to find a house where they could live together off-campus. On January 12, 2016, these tenants entered into a tenancy agreement for the period from May 1, 2016 to April 30, 2017.
The Tenancy Agreements for the Properties
[26] The tenancy agreements entered into between Mr. Kritz and the tenants at each of the respective properties are essentially identical. At each property, the tenants have collectively signed one tenancy agreement for the entire dwelling unit, with the intention that no individual tenant has exclusive possession of any portion of the unit. Each tenancy agreement includes the following terms:
(a) The landlord agrees to rent to the tenants the “single dwelling unit” for a term of one year, although in some cases the tenancies continue for multiple years;
(b) The tenants agree that they are jointly liable for the entire amount of the rent during the term; however, as a matter of convenience, each tenant typically pays a portion of the total rent by individual cheque based on a split of the total rent that the tenants have determined on their own;
(c) A Guarantor of a tenant shall only be liable to the landlord for the portion of rent related to the tenant for whom he/she is acting as Guarantor. This portion is calculated by taking the total rent and dividing by the original number of tenants;
(d) Utilities included in the rent are gas, hydro and water;
(e) The tenants are responsible for arranging and paying for internet and cable services, including any deposits, installation or repair charges;
(f) The tenants shall use the leased premises as a private residence for occupation only by the tenants. The tenants cannot rent out individual rooms except with the written permission of the landlord and at no time will the premises be rented in such a way that its use would fall under the City of Guelph Lodging House By-law;
(g) The landlord will provide one stove and one refrigerator for the use of the tenants. The tenants are otherwise responsible for furnishing the dwelling unit;
(h) The tenants are responsible for cleaning the dwelling unit;
(i) The tenants are responsible for keeping the stairways, walkways, driveway or parking space(s) shared or used by the tenants clear of ice and snow;
(j) The tenants are responsible for replacing any burned-out light bulbs in the dwelling unit;
(k) In cases of the landlord’s entry into the dwelling unit, notice to one of the tenants is “deemed” to be notice to all of the tenants;
(l) The tenants do not have the option to sublet the premises unless they obtain the landlord’s prior written consent and any prospective subtenant shall submit a rental application to the landlord;
(m) Notice by one or more tenants is asserted to be sufficient to terminate the tenancy of all tenants; and
(n) The tenants shall not place any additional locks or bolts upon any door of the premises nor shall the existing locks or doors be altered in any way. “The Premises is rented as a single dwelling unit, not by the bedroom and BEDROOM DOORS ARE NOT PERMITTED TO BE LOCKED” [Emphasis in the original].
The Positions of the Parties
[27] Since Mr. Kritz is advancing an inverse proposition, it is easier to first understand the City’s position as to why his use may be a lodging house.
The City
[28] The City submits that Mr. Kritz’s use of each of the properties prima facie meets the Zoning By-law’s definition of Lodging House Type 1. The definition is factual and focuses on the use being made of the relevant lands.
[29] The key precedent in this case is Neighbourhoods of Windfields Limited Partnership vs. Death, 2008 CanLII 42428 (ON SC), affirmed 2009 ONCA 277. The City says that Windfields holds that the zoning analysis must focus on the actual use being made of the properties – not the behaviours of the occupants or the arrangements between the tenants and their landlord. It is the use of the land that matters.
[30] The City uses its Zoning By-law to differentiate between Single Detached Dwelling uses and Lodging House Type 1 uses in terms of their permitted building types, separation distances and parking requirements.
[31] The City submits that a lodging house provides a different form of accommodation, with a significantly higher density than a single detached dwelling, resulting in different impacts on the surrounding neighborhood. The function, use, size, scale and impact of a lodging house are distinct from a single detached dwelling. Traffic, parking, waste and noise are some of the different conditions that warrant separate regulator treatment. In regulating a lodging house, it is important to ensure the proper function and fit of the use, including the ability of a site to accommodate the intensity of use, to ensure compatibility with the surrounding neighborhood and services.
[32] The Court’s task on this application is not to speculate as to whether Council could or should have chosen to define and regulate Lodging House Type 1 uses in a different manner. The task is to interpret the Zoning By-law as adopted.
[33] To decide this application, this Court must review the Zoning By-law’s definitions to determine which use (Single Detached Dwelling or Lodging House Type 1) best describes how Mr. Kritz is currently using the properties. The definition of Single Detached Dwelling is a free standing, separate, detached building consisting of 1 Dwelling Unit. And, to repeat conveniently, a dwelling unit is a room or group of rooms occupied or designed to be occupied exclusively as an independent and separate self-contained housekeeping unit, including a house.
[34] The definition of Lodging House Type 1 includes Dwelling Unit, meaning that any Dwelling Unit could be operated as a Lodging House Type 1. Accordingly, it is not sufficient to determine whether the properties are Dwelling Units. This Court must also determine whether the properties are being used as Lodging House Type 1.
[35] The City submits that in determining what “living accommodation” is intended to mean, the definitions of Lodging Unit and Lodging House Type 1 should be read together, given that the latter is comprised of five or more of the former. The definition of Lodging House Type 1 requires that the Lodging Units be used for hire or gain (i.e. rented). The intention is that Lodging House Type 1 uses are comprised of five or more rental units that share kitchen and bathroom facilities.
[36] This interpretation accords with the definition of “rental unit” under the Residential Tenancies Act, S.O. 2006, c. 17 (the “RTA”), which specifically includes a rented room in a lodging house [Emphasis added]:
“rental unit” means any living accommodation used or intended for use as rented residential premises, and “rental unit” includes,
(a) a site for a mobile home or site on which there is a land lease home used or intended for use as rented residential premises, and
(b) a room in a boarding house, rooming house or lodging house and a unit in a care home;
[37] A rational, purposeful interpretation of the definition of Lodging Unit would be consistent with the definition of “rental unit” under the RTA. There is no requirement under either Guelph’s Zoning By-law or the RTA that rented living accommodation be “separate living quarters”, as argued by Mr. Kritz. A Lodging Unit can be a bedroom, sleeping room, or any other room capable of being used as rented residential premises.
[38] The RTA also undermines Mr. Kritz’s “group theory” of his residential tenancies. Every tenant in Ontario has rights that are protected by the RTA notwithstanding any written agreement to the contrary. These rights include security of tenure and protection against evictions and rent increases not in accordance with the RTA. Tenants also have the right to terminate their tenancy or seek a sublet or assignment. These rights are conferred upon tenants individually and cannot not be displaced or circumvented by a “group lease”. While a group may commence a tenancy together, they retain individual rights under the RTA and the landlord must deal with each tenant as an individual.
[39] Mr. Kritz argues that applying the definition of Lodging Unit to individual bedrooms would lead to absurd results wherein every rented bedroom within Guelph could be a Lodging Unit – even in rented dwellings occupied by families. Mr. Kritz suggests that the City may enforce its Zoning By-law against a traditional family of five or more that rents a residential dwelling – a hypothetical that the City denies.
[40] In Mr. Kritz’s example of a family with children, the most likely scenario is a landlord renting a dwelling to a mother and/or father who live with their children. However, the landlord in this hypothetical scenario would not have what Justice Howden in Windfields describes as an “economic or commercial” relationship (i.e. one of landlord/tenant) with each member of the family in respect of each of their rooms.
[41] The foregoing hypothetical is very different from Mr. Kritz’s use of the properties. Each property has five or more rooms being occupied by student tenants, each of whom has individual rights and obligations with the landlord under the RTA.
[42] Mr. Kritz admits that each tenant typically pays his or her rent with individual cheques. Though each property is subject to one “group lease”, the City submits that there are five or more “rental units” giving rise to five or more landlord/tenant relationships under the RTA within each property.
[43] In summary, to determine if a Lodging House Type 1 use is occurring, the required assessment under Guelph’s Zoning By-law does not focus on the type of lease or the behaviours of the tenants. The definitions ask (a) how many “living accommodation” rooms are being used as “rental units” in the building (five or more is the threshold chosen by Guelph) and (b) whether the tenants share kitchen and bathroom facilities. Consistent with Windfields, the assessment is predominately factual.
[44] The case law on lodging houses shows that zoning by-law definitions of “dwelling unit” and “lodging house” can vary depending on what a particular municipal authority has chosen to emphasize, in the interests of its particular community. Consequently, the case law can only provide this Court with the analytical approach. The answer to this application must arise from Zoning By-law itself.
[45] Whether contextual factors are used in identifying a “dwelling unit” or “lodging house” depends on the definitions used in the relevant zoning by-law. Where the definitions call for the assessment of the users and their conduct towards each other, the contextual factors may be used to inform the Court’s analysis. Where the definitions do not require an assessment of the users, the contextual factors should not be read into Council’s adopted Zoning By-law.
[46] The definitions found within the Guelph Zoning By-law require the approach of analyzing the actual use and not the individual users.
Mr. Kritz
[47] Mr. Kritz submits that the City interprets the term “Lodging Unit” to be synonymous with the word “bedroom”.
[48] If the City’s interpretation of “Lodging Unit” were correct, every bedroom in a rented dwelling in the City of Guelph would meet the definition of “Lodging Unit”, so long as it shares the use of a kitchen and/or a bathroom. The only distinction between a Lodging House Type 1 and any other “Dwelling Unit” (in which rooms are being rented) would be that a Lodging House Type 1 contains five or more bedrooms.
[49] To determine whether separate rooms independently provide “living accommodation” or whether a group of rooms is a “housekeeping unit”, one must apply the factors identified in the lodging house case law. That case law focuses on the use of, and control over, the dwelling. Applying the factors identified in the case law is a much more nuanced and effective way to control the impact of a dwelling, and it avoids absurd situations.
[50] Based on the City’s interpretation of a “Lodging Unit” as a “bedroom”, a greater number of tenants could occupy the same building as a “Dwelling Unit” that was not as a “Lodging House Type 1”: five people occupying five bedrooms in a rented dwelling would constitute a Lodging House Type 1, whereas eight people occupying four bedrooms would only constitute a Dwelling Unit according to the City’s interpretation. Thus, the City’s interpretation would mean that a Lodging House Type 1 would not necessarily have “significantly higher density” than a Dwelling Unit, and that the reverse could in fact be true.
[51] In addition, if the City’s interpretation of “Lodging House Type 1” were accepted, the result would be that the Zoning By-law would be treating related and unrelated persons differently for zoning purposes. Under subsection 35(2) of the Planning Act, R.S.O. 1990, c. P.13, the City is not permitted to:
pass a by-law that has the effect of distinguishing between persons who are related and persons who are unrelated in respect of the occupancy or use of a building … including the occupancy or use as a single housekeeping unit.
[52] The City’s interpretation of the Zoning By-law would do precisely that: it would distinguish between related and unrelated persons in respect of the occupancy of a single housekeeping unit, by labelling rented dwellings with five or more bedrooms as lodging houses, except when the occupants are related (e.g. a married couple with young children).
[53] With respect to the City’s argument that certain rights of tenants under the RTA (including security of tenure) are “conferred upon tenants individually and cannot be displaced or circumvented by a group lease” and “while a group may commence a tenancy together, they [i.e. each member of the group] retain individual rights under the RTA and the landlord must deal with each tenant as an individual”, Mr. Kritz points out a recent decision of the Ontario Landlord and Tenant Board, as reflected in D.S. v. R.T., SOT-68533-16-RV, 2016 CanLII 44359 (Ont. L.T.B.), at paras. 6-10. There, the Board upheld an earlier decision that had determined that one tenant could unilaterally terminate a joint tenancy without the consent (or even the knowledge) of his/her co-tenant.
The Authorities
[54] The City relies on the Windfields case. Mr. Kritz relies on Good v. Waterloo (City), (2003), 2003 CanLII 14229 (ON SC), 67 O.R. (3d) 89 (S.C.), affirmed 2004 CanLII 23037 (ON CA), 72 O.R. (3d) 719 (C.A.) and a number of cases that followed it.
[55] In Balmoral Developments Hilda Inc. v. Orillia (City) 2012 ONSC 6040, 4 M.P.L.R. (5th) 118, reversed 2013 ONCA 212, 9 M.P.L.R. (5th) 177, Healey J. summarized the two lines of cases as follows.
[56] Healey J. reviewed the Windfields analysis at paras. 55 and 63:
55 Both counsel referred extensively to the Windfields decision in their facta and argument. In Windfields, the issue before the court was whether the zoning by-law in the City of Oshawa was being contravened by thirty homeowners who had converted their homes to accommodate multiple living quarters for students attending a nearby college. The City of Oshawa sought a declaration that such use was prohibited by the zoning by-law. The court found that, in all but six cases, the buildings had been converted into short-term rental/lodging accommodation, which was an illegal non-conforming use, and granted injunctive relief prohibiting such use.
63 Ultimately Howden J. concluded that buildings whose use comes within the following criteria for a "lodging house" are not being used for the purpose of a "single housekeeping establishment", and therefore not permitted in the R1 zone (para 76):
(i) There must be between three and ten lodging units or bedrooms used by individual lodgers;
(ii) The lodging units are occupied by lodgers paying rent, fees or other consideration;
(iii) The lodging units are rooms used or designed to be used for sleeping accommodation, with cooking or washing facilities, not both;
(iv) Cooking and/or washroom facilities are shared by the lodgers in the building;
(v) The building does not function as a dwelling unit.
[57] In Balmoral, at paras. 82-90, Healey J. went on to summarize the line of cases following Good v. Waterloo (City), in contrast to Windfields, as follows:
82 Several cases exist that have examined the issue of whether college or university students living together can be classified as a single household unit, although the wording of that term varied between the decisions and none were cases involving by-law interpretation: Good v. Waterloo (City) (2004), 2004 CanLII 23037 (ON CA), 72 O.R. (3d) 719 (Ont. C.A.) ["Good"], affirmed (2003), 2003 CanLII 14229 (ON SC), 67 O.R. (3d) 89 (Ont. S.C.J.); Ottawa (City) v. Bentolila, 2006 ONCJ 541, [2006] O.J. No. 5444 (Ont. C.J.) ["Bentolila"]; and 2161907 Ontario Inc. v. St. Catharines (City), 2010 ONSC 4548 (Ont. S.C.J.) ["St. Catharines"]. Generally, these cases have used the following criterion to assess whether the occupants should be characterized as a household: collective decision making, and control over who occupies the premises and the activities carried out on the premises, all in relation to the landlord’s level of involvement in those issues.
83 In reaching his decision as to what comprised a lodging house operation in Windfields, Howden J. rejected the analysis used in the case of Good. In determining that residential units within a house were exempt from the licensing requirements of a lodging house within the City of Waterloo, the application judge in Good used the occupants' behaviour as the determining factor for distinguishing between a lodging house and a residential unit. He found that the three occupants engaged in collective decision-making in renting together, assigning bedrooms, rent and utility payments and sharing housekeeping, furniture, entertaining and respect for the other's privacy, despite the fact that there was occasional turn-over within the group of three individuals who were occupying the residential unit. In Windfields, Howden J. reasoned that the activities of the occupants of the house internally and running their lives on a daily basis did not relate to the purpose and rationale for a zoning by-law, and that the term "single housekeeping unit" must be interpreted contextually within the provision itself and in the light of the scheme and purpose of the zoning by-law as a whole. Additionally, Howden J. did not find Good helpful as it involved the interpretation of a licensing by-law, with differently worded definitions from those involved in Windfields, and with a different purpose from the zoning by-law. He noted that a licensing by-law does not address restrictions on the use of land, and generally does not prohibit certain uses in certain areas. By contrast, a zoning by-law restricts the use of land in the areas to which it applies, with a view to reducing impacts on neighbouring properties and implementing the official plan. Howden J. concluded therefore that the tests used in a licensing case like Good involving standards interior to the business or operation, rather than the use, design and the function of the building and their exterior impacts, were not relevant to the case before him.
84 Having rejected the approach in Good that looked to interior standards of the operation, Howden J. discussed these buildings in terms of land use - whether these buildings were designed and functioned as single family dwellings or as commercial businesses not permitted in the R1 zone: they were advertised as boarding houses, the owner exerted ultimate control of the property in accepting rental payments, the insurance policies for most of the buildings referred to their use as student housing, and the homeowners misrepresented their purpose in changing the design of the buildings. Presumably these factors are antithetical to the creation and existence of a "single housekeeping establishment".
85 In Windfields, the home-owners knowingly used misrepresentations in their building permit amendment applications to cover up design changes, which allowed the homes to function as commercial rental or lodging house businesses with the City’s apparent approval, clearly exhibiting the owner’s knowledge of the R1 restrictions and flouting them. Windfields was a by-law enforcement proceeding under the Municipal Act, not a prior interpretation application under Rule 14 as this one is. Both require interpretation of a zoning by-law, the land use elements of which I have had regard to from Windfields, but they occur within very different legal contexts.
86 I reach the opposite conclusion from Howden J. with respect to the applicability of the criterion used in Good, Bentolila and St. Catharines to a zoning issue, particularly given the impossibility of using his analysis to determine “single household unit” due to the confused state of the definitions in the Orillia zoning by-law, as explained earlier. I find the criteria applied in the above cases to be helpful in determining the issue of whether or not a single household unit as used in the Orillia zoning by-law includes the kind of arrangement that would qualify as a boarding house. A household is a factor in determining what is a dwelling unit, but is a different thing than a dwelling unit, the former being produced by behaviour and the latter being a product of use, building form and measurement. The words “living together” within the definition of dwelling unit implies not a static state, but rather a state in which the occupant’s conduct defines the extent to which the individuals are together and living as a single unit. As such it is helpful to look at the objective indicators of behaviour in determining whether a single household unit exists.
87 In Good, the application judge made the following factual findings:
a. There was one lease signed by all of the occupants,
b. Several occupants would leave during the lease period and were responsible for arranging for a sublet of their tenancy,
c. Rent was paid by the occupants individually by post-dated cheques,
d. The utilities were equally split among the occupants,
e. The housekeeping of the interior of the unit was the responsibility of the occupants, while the landlord was responsible for the exterior upkeep,
f. Furniture was supplied by the occupants,
g. Bedroom allocation was determined by the occupants,
h. The occupants all used the living room to entertain guests, watch television and perform other activities,
i. The bedrooms had locks on their doors.
88 In determining that residential units within a house were exempt from the licensing requirements of a lodging house within the City of Waterloo, Gordon J. in Good used the occupants' behaviour as the determining factor for distinguishing between a lodging house and a residential unit. Gordon, J. stated that control in a lodging house is by the owner and the occupants on an individual basis, whereas in a residential unit is by the group. Accordingly, for a residential unit there must be evidence of collective decision-making regarding the use of the premises. He determined that factors such as locks on bedroom doors, not eating meals together, replacement of individual occupants during the lease term and individual rental payments, were not factors relevant to determining whether the unit was a boarding, lodging and rooming house. Gordon J. found that the three occupants engaged in collective decision-making in renting together, assigning bedrooms, rent and utility payments and sharing housekeeping, furniture, entertaining and respect for the other's privacy, despite the fact that there was occasional turn-over within the group of three individuals who were occupying the residential unit. On the basis of those facts, Gordon J. reached the decision that the actual use of the premises was as residential units, and not as a lodging house.
89 This issue of whether a building was a dwelling unit or a boarding house was before MacPherson J. in St. Catharines, although it too is distinguishable as a case involving Building Code compliance as opposed to by-law interpretation. Citing Good as authority for the proposition that the court must examine criteria that reflects whether there is collective decision-making sufficient to create a housekeeping unit, MacPherson J. reviewed the applicable factors to reach her conclusion that the occupants were living as a cohesive unit with some familiarity with each other, and therefore were living in a dwelling unit.
90 In St. Catharines, McPherson J. referenced Bentolila as another decision involving a determination as to whether a property was a “dwelling unit under a single tenancy” or a "boarding, rooming and lodging house. At para 26 she wrote:
… Although the decision was rendered in the context of an appeal from various Fire Code infractions, it was noted that the Building Code and Fire Code are companion regulations as the category of occupation determines the building and fire safety requirements. In the Bentolila case, the property was found to be a "boarding, lodging and rooming house" based on such factors as:
a. There had been substantial renovations done to the property (converted from a single-story two-bedroom home to a three-story fourteen bedroom home);
b. The landlord's son lived in the third-floor unit which was not accessible to the other occupants;
c. Each tenant entered into his or her own lease with the landlord and agreed to pay fixed rent by way of post-dated cheques;
d. The tenants were selected by the owner's son or the superintendent student; and
e. There was no sharing of utilities or other expenses associated with the operation of the house.
The Analysis
[58] Again, putting the by-law terms and definitions into one paragraph, the definition of a lodging house is:
Any building or structure, including but not limited to a room or group of rooms occupied or designed to be occupied exclusively as an independent and separate self-contained housekeeping unit including a house, that is used to provide 5 or more rooms used to provide living accommodation which does not have the exclusive use of both a kitchen and a bathroom.
[59] Looking at this definition and the facts as agreed, I cannot see the difference between a “lodging house” when rented to a single group of five or more students, as we have in this agreed fact situation, and a dwelling unit rented to a family of five or more adults. I find on these facts, that the “dwelling unit” is the house (or that part of 111 Maple) that is being rented by the group and not a “room” being rented by one person.
[60] On these particular facts, there is no “different form of accommodation with a significantly higher density than a single detached dwelling”. There are “no different impacts on the surrounding neighborhood”.
[61] On these facts as agreed, “the function, use, size, scale and impact of a [such a residence is not] distinct from a single detached dwelling”.
[62] If Mr. Kritz were renting to separate tenants or was found to have set up some sort of sham to avoid the by-law, the result would be different. But on these agreed facts, I find that he is renting one unit to several people not several units to several people.
[63] Each of the cases relied upon by the parties depends on the wording of the by-law in issue, the particular Act in issue and the facts that are applied. Unlike here, some have facts in dispute. Those cases are helpful but I agree with the City that they can only give me an analytical approach to apply the facts to this by-law. The City asks that I should analyze the actual use and not the individual users as per Windfields. Mr. Kritz says that I should apply the factors in the case law.
[64] I find the analysis in Balmoral to be persuasive. Windfields was a vastly different fact situation. There, the landowners were found to have lied about the use of the land. That use was grossly different than these facts and grossly different than what the by-law allowed. There, Howden J. found that the “building does not function as a dwelling unit”. However, on these admitted facts, each of the properties does function as one dwelling unit.
[65] Balmoral was successfully appealed but I take some comfort that the Court of Appeal did not fault the reasoning of Healey J. Rather, the Court appears to have used her reasoning, but found fault with her factual analysis.
[66] In any event, on both analyses, I find that the use of the lands are as one dwelling unit and not five or more lodging units. The tenants here are renting a “group of rooms” and are occupying them “exclusively as an independent and separate self-contained housekeeping unit”. Each of the tenants in question in this application is not renting “a room”.
[67] Following the case law and applying these agreed upon facts:
(a) Mr. Kritz did not create the group. Each group of tenants had pre-existing friendships at the time they approached Mr. Kritz as prospective tenants. This is inconsistent with each individual dealing with Mr. Kritz with respect to one room. In case it is necessary to put an issue to rest, this agreed fact is inconsistent with any suggestion that Mr. Kritz is setting up a sham residence to hide a lodging house.
(b) Each of the properties was rented as a single unit to that group. For each property, a single lease was signed by a single group. The tenancy agreements provided that each tenant is jointly liable for the total rent payable for the entire dwelling unit. Notice by one or more tenants is sufficient to terminate the tenancy of all tenants. In a lodging house situation, it is unlikely that one person would sign such a lease with a group of strangers. Here, the collective signed as one unit.
(c) The lease for each property is one year in duration. This is not the short term rental considered in the case law.
(d) Each group of tenants has full access to and control over the entire unit and there is no “exclusive possession” by any single tenant. The bedroom doors do not have key-locks. Again, this is not consistent with the rental of a single room.
(e) The tenants determine who occupies each bedroom and how to occupy the unit generally. This is consistent with the rental of the entire unit and inconsistent with renting a room.
(f) The tenants are responsible for cleaning the dwelling unit. The tenants are also responsible for keeping the stairways, walkways, driveway and parking space(s) clear of ice and snow, and for replacing light bulbs. This could only be done with collective decision making in a residence functioning as a single dwelling unit rather than a group of separate roomers.
(g) Mr. Kritz provides a stove and refrigerator for the use of the tenants of each property. The tenants are otherwise responsible for furnishing the dwelling unit. A lodger might provide his or her own bedroom furniture; only a collective would be able to furnish the balance of the residence.
[68] While it may be that the tenants issue separate cheques as a matter of convenience, I do not see that as a factor that overrides those set out above.
[69] This is a fact driven decision. All of the above factors play into the interpretation of the by-law. Any change of factors might change the decision.
[70] The authority that Mr. Kritz relies upon with respect to the RTA argument is slight. Be that as it may, that is between the tenants and Mr. Kritz. For the City’s purposes, the actual use is as set out in the rental agreements.
[71] The facts and arguments for each property are the same. Accordingly, the declaration is granted as asked for each property.
Website References
[72] With respect to this issue, the parties agreed that:
[73] Prior to 2005, if a municipal inspector was not able to gain access to inspect a residential dwelling after a few attempts, the procedure was to maintain the file but not attempt further inspections. Should the property be sold, potential violations were disclosed to prospective purchasers upon request.
[74] In 2005, the City changed its internal policies to increase proactive enforcement. The changes were due, in part, to concerns of rental housing over-concentrations and tenant safety. The change to proactive enforcement included a direction to enforcement staff to review advertisements for rental housing to determine if there is a reason to follow up on potential violations.
[75] After 2005, if the City determined through its searches of rental advertisements (as part of its “proactive enforcement” program) that five or more bedrooms exist or are being used in a rented dwelling, it may attempt to investigate whether the dwelling is being operated as a lodging house.
[76] Under the City’s proactive enforcement practices, where on-site inspections are refused, the City will schedule follow-up attendances for re-inspection. The City’s practice is also to inform the property owner that the City has received a “complaint” regarding the use of the property, without providing details of the complaint. With respect to Mr. Kritz, the City did not provide such details when requested, thereby placing the onus on Mr. Kritz to seek further details regarding the complaint.
[77] The City then asks the property owner to arrange for an inspection to determine compliance with municipal and provincial standards. Even where consent for an inspection is refused, the City’s general practice is to continue attending at the property on an annual basis to request an inspection.
[78] The City has an Accountability and Transparency Policy. However, in relation to certain letters Mr. Kritz sent to the City, Mr. Aubrey testified that the City’s policy “when we received a letter with no phone number or email contact, was not to respond – not to respond via letter”.
[79] The City also maintains a web portal informing the public of active municipal enforcement investigations. In the case of the subject properties, the City has identified each property as a “Lodging House” or “Possible Lodging House”, but did not notify Mr. Kritz of these postings. The City has refused Mr. Kritz’s requests to remove these postings while the corresponding investigation file remains “open” and has advised Mr. Kritz that the only way in which the investigations can be completed is to permit the City to conduct an internal inspection.
[80] The City has not attempted to obtain a warrant to enter any of the properties at any time, though the City has discussed this option internally. At the relevant times, the City did not believe that it had sufficient information to successfully obtain a search warrant.
Analysis of the Website Issue
[81] The affidavit material sets out a lengthy history of the City’s efforts to enter the properties and Mr. Kritz’s rightful refusal to allow that (except on one occasion to 108 Dublin).
[82] The City filed an affidavit from its Program Manager – Zoning. He says:
The file on this property was not active between 2004 and 2014, mostly because the owner Kritz was uncooperative and not allowing access. Due to lack of resources and excessive workload, without the cooperation of the owner, the property remained flagged for review at a later date.
[83] It appears that the City takes the view that relying on one’s rights is a show of being uncooperative.
[84] In argument, counsel for the City said that he knew of no authority requiring the City to place unsubstantiated concerns on its website. Nor do I.
[85] The effect of the City’s conduct here, and their apparent policy, is that when the City has concerns that it cannot substantiate, and does not have time or desire to take the appropriate steps to substantiate, it simply puts those concerns on their website to force the City’s resident to be more “co-operative”. That, of course, is indefensible. If the City has concerns, it has the responsibility to investigate. It has the right to ask to enter. The landowner or occupant has the right to refuse. If the City wishes to do more, it has the legal tools to do more. It cannot use the web to do its work or to pressure landowners into complying with the City’s wishes.
[86] The entries with respect to Mr. Kritz will be removed forthwith. While I cannot order the City to do so, that general practice should come to an end just as quickly.
The Result
[87] For the reasons set out above, the Applicant is granted a declaration that each of the properties in issue is not being used as a “Lodging House Type 1”, as that term is defined in the Zoning By-law.
[88] A mandatory Order shall issue that the City shall remove any references on its website or elsewhere under the City’s control to the properties in issue being a “Lodging House” or a “Possible Lodging House”, or otherwise suggesting that the Properties meet the definition of a “Lodging House Type 1” under the Zoning By-law.
Costs
[89] If the parties cannot agree on costs, written submissions may be made to me. Mr. Kritz shall provide his submissions within 15 days and the City shall respond within 15 day thereafter. There shall be no reply unless it is asked for. Each submission will be no more than three pages, not including any offers to settle or bills of costs.
“Justice Lemon”
Justice Lemon
Released: November 23, 2016
CITATION: Kritz v. City of Guelph, 2016 ONSC 6783
COURT FILE NO.: 16-253
DATE: 20161123
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
James Kritz
Applicant
– and –
City of Guelph
Respondent
endorsement
Justice Lemon
Released: November 23, 2016