Court rules that City of Toronto failed vulnerable tenants
Officials should have alerted rooming-house residents they were entitled to lower rent
The City of Toronto is financially liable for failing to alert a group of vulnerable rooming-house tenants that they were entitled to rent reductions, Ontario’s top court ruled Monday.
In its decision on the class-action suit, the Court of Appeal found the city had been negligent and breached the standard of care owed to the west-end tenants.
“The city knew intimately the situations of the class members and the nature and extent of their particular vulnerabilities,” the Appeal Court found.
“(It) knew the city’s actions would exacerbate those vulnerabilities, knew that even modest rent relief would be especially meaningful to the class members, and ought to have known that this vulnerable group would be especially hard hit by the city’s failure to perform its statutory notification duties.”
The case arose in 2003, when changes at the provincial level lowered property-tax rates for rooming houses. The legislation required landlords to lower rents and municipalities to provide notices of the rent reduction to affected landlords and tenants.
However, Toronto failed to send out the notices to tenants of certain rooming houses in Parkdale.
One tenant, Terence Williams, launched a class action for damages on the grounds that affected renters between 2003 and 2008 had overpaid.
Williams argued the city had committed itself to pursuing a lower tax rate on rooming houses as part of an effort to protect affordable housing in Parkdale and therefore was responsible for the overpayment situation.
In January, Superior Court Justice Paul Perell agreed the city had been negligent — with individual tenant damages to be determined — by failing to notify the affected tenants.
“The appellant and the class members are particularly vulnerable and would not know of their rights without the information in the notices,” Perell ruled.
The city appealed on several grounds, arguing among other things that it did let the tenants know — in 2009 — about the property tax changes.
In siding with the tenants, however, the Appeal Court found the notification provided too little information too late.
The court also noted the city knew the tenants would suffer harm by the lack of timely notice about their entitlement to a rent reduction.
The specific facts of this case and the “modest” $1 million sought in damages, the court ruled, would not expose Toronto or other municipalities in the province to potentially huge liabilities.