Renovating and/or Alternating Residential Leased Properties by Tenants

By Mirjana (Mira) Markovic

If you are leasing a property, you are most likely familiar with the delicate balance of trying to make the space feel like your own by exercising “rental-friendly hacks” without violating the terms and/or conditions of your Lease Agreement. On the other hand, as a landlord, you may be frustrated to discover that your tenants have been alternating and/or renovating your rental property without your prior consent therefore, placing you in a very difficult position (i.e., evict the tenants and/or seek damages as a result of unauthorized renovations and/or alterations).

Whether the Courts will grant an eviction order to landlords for unauthorized renovations and/or alternations by a tenant, will depend on a case-by-case basis. Recently, a landlord reached out to me as he wanted to evict his tenant for substantially altering a rental property that he owned without his prior consent.

Section 62(1) of the Residential Tenancies Act[1] (“Act’) indicates the following:

62 (1) A landlord may give a tenant notice of termination of the tenancy if the tenant, another occupant of the rental unit, or a person whom the tenant permits in the residential complex wilfully or negligently causes undue damage to the rental unit or the residential complex. 2006, c. 17, s. 62 (1).

In order for a landlord to successfully evict a tenant for unauthorized renovations and/or alternations to a rental property, such must constitute undue damage. No universal definition of undue damage is available, however, in Metroview Developments (Winlock) Inc. v Dai[2], the Court opined the following: “while there is no definition of “undue damage” in the Act, it can be reasonably concluded that the relevant damage must be beyond ordinary wear and tear.” In this particular case, the tenants had performed interior renovations without the consent of the landlord, by erecting walls and doors to create additional rooms to sublet. The Court found that this constituted undue damage.

In Samcon Development v. Banchik[3], the Court found that alterations that make a property less valuable or useful, or even less desirable to a landlord, constitute undue damage. In this particular case, the tenants erected a large chain link fence on the property without the landlord’s knowledge or consent.

In cases such as Edalat v Yoo, 2021[4] , Toronto Community Housing Corp. v. Borys[5], and TNL-08119-18 (Re)[6], the Court found the tenants had caused undue damage by adding doors and walls to their rental units.

In my landlord’s particular case, he consented to the tenant changing only the floors in the kitchen of the rental unit, however, the tenant proceeded to also change the floors in the hallway, living room, dining room, and bedroom, for which no consent was provided. The landlord requested that the tenants rectify these issues by changing back the unauthorized alterations to their original state (hardwood and carpet). As a result of the tenant’s silence, the landlord wished to commence eviction proceedings.

According to case law, adding walls, and doors, and removing tiling among other changes constitute undue damage, however, such changes must not constitute an improvement. Even though my landlord’s Lease Agreement stipulated that the tenant would pay the full cost of those repairs of damage caused by the tenant’s negligence or wilful damage, the application to evict the tenant and seek a claim for damages may be successful if my landlord is able to prove that the unpermitted renovations and/or alternations to the rental unit constituted undue damage and that same was not an improvement. Again, it is important to note that the Court will look at individual circumstances on a case-by-case basis.

With this said, landlords in a similar situation should ensure that they take the following steps:

• Provide the tenant with an N5 Notice first (https://tribunalsontario.ca/ltb/forms/).
  • The notice gives the tenant seven (7) days of being given the said notice, the opportunity to rectify the issue(s) indicated in the said notice. If the tenant does not rectify the issue(s) by the deadline, then starting on the 8^th day, the landlord may apply to the Landlord and Tenant Board under the L2 application and commence the eviction process.

Landlords should always ensure that they allow the tenant to rectify any issues between the parties before they commence an L2 application. This will give the Court the opportunity to observe a landlord’s efforts in choosing alternative avenues before resorting to evict the tenant. On the other hand, tenants should always speak to the landlord and obtain consent before they renovate and/or alternate a rental property in any way to avoid future eviction and/or Court proceedings

The above-noted case law suggests that Courts are willing to grant landlords eviction orders while ordering tenants to pay the landlord the costs of removing the unauthorized renovations and/or alterations of a rental property. However, we should be mindful that the renovations and/or alternations must not be an improvement, must not be neutral in effect, but must be substantial and unauthorized. Furthermore, while Lease Agreements with a clause prohibiting unauthorized renovations may be helpful to landlords seeking remedies against their tenants, claims of this nature may also succeed without such clauses.

This article was written by Mira Markovic and Brooklyn Lester. They can be contacted at mira@sorbaralaw.com; blester@sorbaralaw.com for further inquiries.