Court of Appeal Confirms Exemption from Residential Tenancies Act Applies to Children’s Mental Health Provider’s Housing Program
Introduction
A recent decision of the Court of Appeal for Ontario clarifies how the exemption scheme under section 5 of the Residential Tenancies Act (the “Act”) applies to transitional housing programs. It is a welcome decision that provides several important takeaways, particularly for children’s mental health providers who operate housing programs. This blog post will provide a summary of the case history, the Court’s decision, and our takeaways for health providers who operate housing programs.
The issue before the Court was whether section 5(k) of the Act exempts a transitional housing program provided by a children’s mental health provider, YouthLink Youth Services (the “Respondent”). There are very few reported cases regarding the interpretation of section 5(k), and this is the first reported case to interpret section 5(k) following the introduction of a new regime for exemption of housing programs from the Act under section 5.1 in 2017.
History of the Case
The Respondent operated a transitional housing program (the “Program”) in which the Appellant (then 18 years old) participated in 2020. Through the Program, the Appellant resided in a residence shared with other youth and a staff mentor and was provided a range of services. The Appellant was discharged early from the Program for reasons related to her failure to follow the Program’s rules and expectations including compliance with COVID-19 directives and requirements, which posed a risk to the health and safety of other residents, as well as the Program’s staff. The Appellant applied to the Landlord and Tenant Board (“LTB”) for a determination of whether her tenancy in the Program fell within the jurisdiction of the Act. If it did, then the Appellant argued that her discharge from the Program was, in fact, an illegal eviction. The Respondent’s position was that section 5(k) exempted the Program from the Act and that the Appellant had been discharged pursuant to the rules of the Program, which the Appellant had agreed to before entering the Program.
The LTB found that the Respondent could rely on section 5(k) and that the Program met the requirements for an exemption under that provision of the Act. The Appellant’s application was therefore dismissed as being outside of the LTB’s jurisdiction. The Appellant appealed to the Divisional Court, which affirmed the LTB’s decision and dismissed the appeal.
Court of Appeal
The Appellant obtained leave to appeal and brought a further appeal to the Court of Appeal of Ontario. A right of appeal was available on questions of law only, and the standard of review was correctness. The sole issue on appeal was whether section 5(k) continued to exempt the Program from the Act following the introduction of section 5.1.
The Appellant again argued, as she had before the LTB and the Divisional Court, that the introduction of section 5.1 in 2017 created a new regulatory regime governing transitional housing programs and that the Program and other transitional housing providers must comply with section 5.1 if they were to be exempt from the Act. The Appellant asserted that both the LTB and the Divisional Court had erred in concluding that section 5(k) remained available to the Program.
After analyzing the relevant provisions of the Act and the parties’ submissions, the Court of Appeal agreed with the interpretation of the previous adjudicators in this matter and dismissed the appeal. In doing so, the Court of Appeal clarified several key points regarding how the exemptions under the Act for transitional housing providers should be interpreted. These points are discussed in detail below, with a list of takeaways provided in our conclusion.
Section 5(k) or Section 5.1?
Section 5(k) states that the Act does not apply with respect to a living accommodation if:
It is occupied by a person for the purpose of receiving rehabilitative or therapeutic services
There is an agreement between the parties that the occupancy will be for:
a specified duration, or
will end when the objectives of the services have been met or will not be met
It is intended to be provided for no more than a one-year period
Section 5.1 is a much more detailed provision which states (among other requirements) that the Act does not apply to a living accommodation if:
It is provided to a person as part of a program that is intended to support the occupant of in subsequently obtaining and maintaining a more permanent living accommodation
The accommodations are intended to be provided for no more than a four-year period
It is accompanied by one or more of:
rehabilitative services
therapeutic services
services intended to support employment, or
services intended to support life skills development
There is an agreement between the parties that includes the requirements listed in section 5.1(3)
Section 5(k) is the provision which transitional housing providers relied on historically for exemptions from the Act, and which the Program had been designed to comply with. As discussed above, the Appellant’s main argument before each adjudicator was that section 5(k) was no longer available to the Program following the introduction of the new, more detailed section 5.1. Notably, neither section provides a definition of “transitional housing” or “rehabilitative and therapeutic services”.
Section 5.1 Does Not Limit Section 5(k)
The Court of Appeal found that section 5.1(5) of the Act preserves the availability of other exemptions in section 5, including section 5(k), because it states that “[n]othing in this section limits the availability of other exemptions”. The Court also noted that the Legislature did not amend section 5(k) when section 5.1 was introduced.
The Court also agreed with the LTB and the Divisional Court that even if section 5.1 does establish a new, more comprehensive scheme for the regulation of transitional housing that overlaps to some extent with section 5(k), the operation of section 5(k) is not precluded for that reason. Section 5.1 can accommodate programs that are longer than one year, that do not include rehabilitative or therapeutic services, and which may include services not provided by the program.
The Court accordingly found that the operation of section 5(k) was not changed by the introduction of section 5.1 and that it remained available to the Program. The Court further concluded that the application of the section 5(k) requirements to the Program is a question of mixed fact and law that is not subject to appeal. The appeal was dismissed.
Transitional Housing Under Section 5(k)
In its analysis, the Court commented on the fact that the term “transitional housing” is not defined in the Act. The Court found that both section 5(k) and section 5.1 are concerned with transitional housing. The nature of transitional housing under section 5(k) is that it is not just a short-term accommodation but is provided for the purpose of receiving rehabilitative or therapeutic services, after which the person will transition to another housing option.
The Court further stated that a narrow interpretation of section 5(k) risks undermining the social programs it is intended to protect, as the protections intended to regulate traditional housing relationships might frustrate the achievement of a program’s goals (i.e., rules and restrictions, requirements to participate in services, etc.).
Rehabilitative Services Are More Than Medical
The Court also addressed the definition of “rehabilitative”, which is not provided in the Act. The Court concluded that, having regard to the text, context, and purpose of the legislation, rehabilitative and therapeutic services in section 5(k) must be interpreted as including not only medically-related services but also a broader range of support services that are designed to establish the ability for individuals to transition to independent accommodation (such as counselling and case management). This definition was provided in a previous decision of the LTB, SOL-45003-14 (Re), and was relied on by the LTB and the Divisional Court.
Conclusion
The decision of the Court in this matter has greatly clarified how exemptions from the Act apply to programs that provide transitional housing as part of their services. This decision confirms that section 5(k), which many of Ontario’s social programs have been developed to comply with, remains available as an exemption under the Act. This decision also highlights that section 5.1 provides an opportunity for programs to operate in a more flexible manner, with longer occupancy terms and a broader range of services qualifying them for an exemption.
The takeaways from this case are relevant to any transitional housing providers that also provide rehabilitative services, but especially so for health care providers such as children’s mental health organizations that provide accommodations for youth and children. Below is our list of takeaways from this case:
The Residential Tenancies Act is designed to regulate traditional landlord-and-tenant relationships and includes several exemptions for other kinds of living accommodations.
Both sections 5(k) and 5.1 of the Residential Tenancies Act may apply to exempt transitional housing programs that meet the requirements of those sections.
The term “transitional housing” is not defined in the Residential Tenancies Act and does not determine which exemption applies in each case.
The term “rehabilitative services” in section 5(k) is not only medical in nature and includes a broader range of support services (including counselling and case management).
Rosen Sunshine LLP, which acted for the Respondent in this case, represents children’s mental health providers and provides a range of services to assist them in maintaining regulatory compliance. If you or your organization would like to discuss our services, please contact us.
