Eviction in Ontario Housing Co-operatives: A Proposal for Change

Transcription

1 Eviction in Ontario Housing Co-operatives: A Proposal for Change A Brief to the Ministries of Finance and Municipal Affairs and Housing March 2004 Co-operative Housing Federation of Canada Ontario Region

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3 Executive Summary The Ontario Region of the Co-operative Housing Federation of Canada (CHF Canada) is calling on the Ontario government to amend the Co-operative Corporations Act to solve serious problems with the current system used by housing co-operatives to evict resident members. The Ontario Region is a division of CHF Canada, which represents nearly 90 per cent of the 550 housing co-operatives in Ontario. Directed by an elected council, the Ontario Region speaks for co-op housing at Queen s Park. In combination with co-ops by-laws, the 1992 Co-operative Corporations Act sets out the framework for eviction in Ontario housing co-operatives. This eviction system provides for two rigorous internal procedures (a hearing before the co-op board and, upon appeal, a hearing by the co-op members), and then a court process. In contrast, since the Tenant Protection Act was passed, private and non-profit landlords use the Rental Housing Tribunal, rather than the courts, for evictions. For these landlords, no internal process is mandated, and the Tribunal does not examine how the decision to evict was reached. (In private rental housing, typically a property manager makes the decision, with tenants having no right to an internal review.) The legal framework for co-op evictions, combined with case law, has made co-op eviction burdensome, costly, and, in some cases, less fair than co-ops would like. The court process is slow, with frequent deferrals, and takes place only after the extensive internal process. The result, very often, is significant delays that mean higher bad debts for co-ops. The Co-op Act is not clear about whether an evicting co-op functions as an administrative tribunal or a private corporation. The courts, also, are inconsistent in their approach. Some judges treat a co-op s internal eviction decisions with deference, declining to examine the substance of the case; other judges start over and allow eviction only when their assessment of the facts and law shows eviction to be fair. This uncertainty about how eviction decisions will be made forces lawyers, both for the co-op and for the member, to prepare their cases in two ways. A judge that gives deference to co-op decisions expects co-ops to demonstrate a high degree of procedural fairness by conducting their internal procedures to the standard expected of a quasi-judicial tribunal. In practice, this means that co-ops must not only observe the detailed written provisions in the Act and in co-op bylaws, but also any other provisions that a judge may think are appropriate for a tribunal. This emphasis on process means that volunteer boards must work long and closely with their lawyers to ensure that every procedure is impeccable. Even so, an eviction may fail on narrow technical grounds, even if eviction would be the right decision, on the merits of the case. Eviction in Ontario Housing Co-operatives 3

4 Delay, uncertainty, and excessive emphasis on procedure all result in higher costs. Usually, a co-op eviction is many times more expensive than an eviction from a non-profit or private landlord. In view of these problems, housing co-operatives have directed the Ontario Region to pursue reform that protects individual members rights more effectively helps co-ops enforce their member-approved by-laws, and makes the eviction system in co-ops more efficient and affordable. The Ontario Region is respectfully submitting this brief to the Ministry of Finance, which is responsible for the Co-operative Corporations Act. We are also sending it to the Ministry of Municipal Affairs and Housing, because that Ministry is responsible for legislation governing provincial-program housing co-ops and for the Rental Housing Tribunal, which one of our recommendations speaks about. We would like to begin exploring these ideas as soon as possible, so that we can go to Ontario housing co-ops at CHF Canada s annual meeting in June 2004, with a proposal that government can support and that achieves co-ops goals for reform. Our recommendations appear below. Recommendation 1 THAT a co-operative housing tribunal be created to consider and decide about eviction from housing co-operatives; AND THAT it use the infrastructure of the Rental Housing Tribunal. The current system of eviction through the courts is expensive for both co-ops and co-op members in terms of delay and direct costs. Co-op members who do not qualify for legal aid are significantly disadvantaged in the courts because of the legal costs they must incur if they choose to fight eviction. We propose the creation of a co-op housing tribunal that would function as the outside body granting writs of possession. For reasons of economy, we suggest that the Co-op Housing Tribunal use the infrastructure of the Rental Housing Tribunal, but that the adjudicators be qualified and trained to deal specifically with co-op evictions. The mediation services available from the Rental Housing Tribunal should also be available from the Co-op Housing Tribunal. In view of the government s anticipated review of the Tenant Protection Act and Rental Housing Tribunal, we would expect to enjoy the benefits of an improved system. Recommendation 2 4 Eviction in Ontario Housing Co-operatives

5 THAT the Co-op Housing Tribunal s determination of whether to evict be based on its own review of the merits of the case (a de novo hearing), without reference to the internal process by which a co-op decides to apply for eviction. Co-ops would follow an internal process in deciding whether to send a possible eviction forward to the Co-op Housing Tribunal. The co-op s role would be to decide whether to refer an application for eviction and to present the elements of its case at a Co-op Housing Tribunal. The Tribunal would base its eviction decision solely on its own findings of fact, rather than on a review of internal co-op processes. Amendments to the Act would need to say unmistakably that the co-op s decision process does not affect the decision of the Tribunal. Any mistakes in the co-op s internal procedures would be irrelevant. The Tribunal would come to a decision by answering the following questions: What took place? Did what took place breach a ground for eviction under a by-law of the co-op? Is the ground in the by-law unreasonable or arbitrary? Given all the circumstances, would it be fair to grant an eviction? Recommendation 3 THAT the Co-op Act be amended to include only the following minimum requirements that co-ops must follow if they wish to refer an eviction to the Co-op Housing Tribunal: The decision to go to the Tribunal must be made by resolution of the board of directors. A member whom the Tribunal may be asked to evict is entitled to receive at least ten days notice of the board meeting. The notice will include only the general grounds for eviction. A member whom the Tribunal may be asked to evict is entitled to appear personally, with or without an agent or lawyer, and make representations before the board decides to go to the Tribunal. AND THAT, provided a co-op meets these minimum standards, the details of the internal process by which it decides to ask for eviction would be left to each co-op to establish in its by-laws. The Ontario Council wants to retain an internal process that gives co-op members more rights than tenants enjoy. However, as the Co-op Housing Tribunal would start over on each eviction and decide it on its merits, the Co-op Act should prescribe only minimal internal requirements. The Council recommends three: the co-op board makes the decision to seek eviction; the member has a right to notice Eviction in Ontario Housing Co-operatives 5

6 of the board s hearing; and the member has a right to a hearing before the board decides. Otherwise, the co-op should be free to set its own rules about the internal procedure it would follow in deciding to apply to the Tribunal for eviction. Recommendation 4 THAT the Ministry of Finance put in place a process, as soon as possible, to work with CHF Canada s Ontario Region, and the Ministry of Municipal Affairs and Housing, to explore our proposals for eviction-law reform and reach agreement on legislative change acceptable both to government and to the Ontario co-operative housing sector; AND THAT the timing of this work be co-ordinated with the government review of the Tenant Protection Act, so that the legislative opportunity presented by the expected amendments to the Tenant Protection Act in autumn can be used to amend relevant sections of the Co-operative Corporations Act. The Ontario Council wishes to work with the Ontario government on reforming co-op evictions. At our June meeting, we want to ask Ontario members to endorse a model that meets their needs and is acceptable to government. Understanding that changes to the Tenant Protection Act are planned for the fall, we suggest that the Co-op Act might be amended at the same time. 6 Eviction in Ontario Housing Co-operatives