A Property Manager as an Agent

The greatest strain on the justice system during the pandemic is arguably on housing claims, given the cascade effects that unemployment and financial instability has had on tenancies.

Without a constitutional basis for undue delays in this area like in criminal law, some of these matters have been languishing even longer than usual.

One of the long-standing debates in this area of law has been whether a property manager can act as an agent on behalf of a landlord. This has become particularly important in Ontario since 2008, when paralegals became regulated and licensed by the law society.

The Law Society Act (LSA) states in s. 26.1 that it is an offence to provide legal services without a license, unless one of the exceptions applies. Legal services are also defined in s. 1, and includes,

Selects, drafts, completes or revises, on behalf of a person,

vii. a document for use in a proceeding before an adjudicative body.

One of the important exceptions here can be found under By-law 4, and includes under s. 28 those “who acts in the normal course of carrying on that profession or occupation” for activities that exclude representation. This is one of the grounds that property managers have historically used to justify filling out housing forms, and the Divisional Court recently upheld this practice in Rivera v. Eleveld.

The case involved a Notice of Termination (Form N4) which was objected to at the time of the hearing on the basis that it was not signed by the landlord or a person permitted to provide legal services, and was therefore void.

The tenant challenged this practice as failing to fall under the exemption under s. 30, which allows for the provision of legal services as an in-house legal services provider. They utilized the definition of a landlord under s. 2(1) of the Residential Tenancies Act (RTA), and questioned whether the property manager fell under this definition, as he was not an employee of the landlord. This created a potential conflict between s. 43(1) of the RTA and s. 26.1 of the LSA.

The requirements for this notice is stipulated in the RTA as follows,

43 (1) Where this Act permits a landlord or tenant to give a notice of termination, the notice shall be in a form approved by the Board and shall,

(a) identify the rental unit for which the notice is given;

(b) state the date on which the tenancy is to terminate; and

(c) be signed by the person giving the notice, or the person’s agent.
[emphasis added]

In The Law Society of Upper Canada v. Chiarelli, the Ontario Court of Appeal interpreted the RTA and expressed concern about a property manager representing a landlord, and stated,

[29] Although the appellant may be considered a landlord for the purposes of certain aspects of the Residential Tenancies Act, this does not change the fact that he is providing legal services to a third party. Any obligations or rights flowing from proceedings before the board, to the extent that they impact on the appellant at all (e.g., orders under ss. 204 or 205 of the Residential Tenancies Act to pay moneys or costs to a tenant), are derivative in nature. They flow from the fact that the appellant is providing services to the property owner. If the appellant were not acting for a client in any given case, he would not have any interest in the proceeding and thus no standing.

The court concluded that a property manager could not appear before the Board on behalf of their clients, unless they were also the owner of the property in question. However, this case did not deal with signing a notice of termination.

In Rivera, the member noted that the term agent is not defined in the RTA, and instead adopted the definition of “one who is authorized to act for or in the place of another.” Other aspects of the RTA, such as s. 185, explicitly specify a requirement of licensees. Absent that exclusion under the provisions for notice, a licensee should not be required.

The Divisional Court affirmed this decision stating,

[9] Ordinary principles of statutory interpretation support the interpretation confirmed in the Review Decision. Further, the LTB interpretation of “agent” does not give rise to a conflict between the Law Society Act and the RTA. Section 1(6) of the Law Society Act must be read in the context of the general definition of “providing legal services” in section 1(5), which requires that the conduct “involves the application of legal principles and legal judgment with regard to the circumstances or objectives of a person”. In conclusion, for the purposes of s. 43 of the RTA, an agent does not need to be licensed to provide legal services.

To the extent that LTB proceedings can reduce and minimize the cost and expense, it may facilitate more expeditious resolution of proceedings. If relying on property managers instead of legal representatives for some aspects of the proceedings, that may benefit everyone.

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