Frustrated Tenancies
Involving Impossibility of Continued Occupancy
Page last modified : December 06 2023
What Happens if a Serious Fire Damages a Rental Unit?
The Law of Frustrated Contract Terminates a Lease when a Catastrophe Strikes Resulting in Necessity of Repairs Over an Indefinite Period of Time.
Understanding When the Doctrine of Frustration Applies to a Residential Tenancy and What Recourse Does a Tenant Have?
Events that result in significant harm, like a fire, tornado, flood, or major
Water leaks or other calamitous events could happen and make it impossible to occupy a space while it is being built, renovated, or maintained.Water leaks or other calamitous events could happen and make it impossible to occupy a space while it is being built, renovated, or maintained.
19Tenancy agreements are subject to the Frustrated Contracts Act and the doctrine of frustration of contract.
Condemnation
Occasionally a condemnation order from the local municipality renders a rental unit uninhabitable. This kind of thing happened and was the subject of the 2010 CanLII 58985 case AS v. CJM, TSL-05808-10 (Re), where it was stated as follows:
1. The parties to the hearing before me submitted an order from the City of Toronto dated September 27, 2010, stating that the rental unit cannot be occupied and that the residential complex is unsafe.
2. The Residential Tenancies Act, 2006 (the “Act”) states in section 19 that “the doctrine of frustration of contract and the Frustrated Contracts Act apply with respect to tenancy agreements,” as I explained during the hearing. The doctrine of frustration basically states that a contract is considered terminated when performance is no longer possible.
The doctrine, as it relates to residential tenancy agreements, states that a tenancy ends by operation of law when a residential complex is condemned and no longer physically habitable.
3. As a result, an order will be issued stating that the doctrine of frustration will cause the tenancy to terminate.
As a result, and it appears that even though the landlord’s negligence may cause the property to be condemned, the official condemnation of the property results in the tenancy agreement’s frustration and the tenancy’s subsequent termination.
Ceasing of Security of Tenure
1. From June 1 to December 1, 2012, this unit was subject to the Residential Tenancies Act, 2006. The unit was declared uninhabitable at that point, and the tenancy agreement was frustrated in accordance with the Frustrated Contracts Act and as allowed by Residential Tenancies Act, 2006 (RTA), section 19.
2. There is no anticipated date for the tenants to be allowed back into the rental unit because of the extended amount of time needed to complete the repairs to the unit. When the apartment does become habitable, the landlord is not required by the RTA to give the tenants first dibs.
3. As of December 1, 2012, I have determined that the rental contract is frustrated due to the evidence presented and the fact that the rental unit’s vacancy is not temporary.
Summary Comment
Regardless of whether the event happens during a lease period or during a month-to-month period, an unforeseeable destructive event—often referred to as a force majeure—that renders a rental unit unoccupier for an unknown length of time typically results in a frustration of the tenancy agreement. The tenancy agreement, including the security of tenure, terminates when the occurrence reaches the point of frustration for both the landlord and the tenant.
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