Landlord Facing 305 Charges and 61 Outstanding Work Orders Fails to Convince Judge That Waterloo’s Rental Housing Licensing Program Is Unconstitutional

A residential landlord is $50,000 poorer after unsuccessfully challenging the constitutionality of the City of Waterloo’s Rental Housing Licensing Program.

In 2011 the City of Waterloo implemented By-law047 and a new comprehensive rental housing licensing program. The purpose was, among other things, to improve the health and safety of residential tenants.

The program requires most landlords of low-rise units to submit:

  1. A general inspection report from the electrical safety authority (every 5 years);
  2. An HVAC certificate (every 5 years);
  3. Proof of insurance (required annually);
  4. A criminal record check (every 5 years); and
  5. A floor plan for each unit.

Landlords are also required to submit an annual fee.

Although many landlords may not have been happy with the new requirement to be licensed, one such landlord was especially unhappy. So much so that it went to court to challenge the constitutional validity of the City’s ability to pass the by-law.

The landlord made two arguments in this respect. The first was that the licensing fee was really a form of taxation and that the City did not have the jurisdiction to impose such a tax. The second was that the by-law was discriminatory under the Human Rights Code because it applied to townhouses whilst exempting apartment buildings. Since, according to the landlord, more families live in townhouses than apartment buildings, this was unfair to the occupants of townhouses on the grounds of “family status”.

At the time of the hearing the landlord had accumulated 305 charges under the relevant by-law and was also facing 61 outstanding work orders.

Notwithstanding that the decision is lengthy and comprehensive, the court made short work of these two arguments.

The court held that they by-law was intended by the City to be revenue neutral over the long term and to address effectively numerous health and safety issues directly affecting landlords and tenants throughout the City of Waterloo. The court also accepted that the license and renewal fees were calculated by the City based on estimated costs associated with administering the program. The court ultimately held that the fees were not taxes because “their purpose is to defray expenses, not to raise revenue.”

With respect to the human rights argument, the court held that the landlord was unable to establish that the by-law discriminates based on family status (or on any other protected status). The court noted that the by-law applies to low-rise rental properties regardless of whether the property is being rented to a family or non-family, and that it applies throughout the City and does not target any particular person or group of people or whether or not the housing is affordable.

The court ordered the landlord to pay the City $50,000 in legal costs. The landlord, a numbered company, is identified in the decision as the operator of the property. I wonder whether or not the landlord is also the owner, and whether it has assets to satisfy the cost award. Alternatively, I wonder what municipal remedies the City may wield against the landlord’s rental business if the costs are not paid and the work orders not complied with.

Comments

  1. I live in one of these units. The property manager has made it explicitly clear that the owner intends to pass along every penny of that license fee to us residents. My best guess is that the units are older, only in semi-passable repair and not to code in several ways and therefore the owner does not want to be forced into compliance because it would be too expensive. I am not a legal professional, but I have read through the bylaw myself. It appears relatively helpful (focused mostly on making sure living conditions are at a certain standard).

    Most of the people who live here are not aware of the legal battle going on in the background right now. It is true that the bylaw officers have come looking for information from us, but our building manager always follows that up with explicit instructions to deny the bylaw officer our information and that their own legal representative is and will take care of it.

    It’s doubly sad that a search online gave me more information about the owner of my home than I was able to glean from our building manager.