Introduction

In February 2023, the City of Windsor introduced a residential rental licensing (RRL) program through By-law 14-2023 (the “By-Law”). According to the City of Windsor, this initiative, intended to be a pilot study before potential city-wide implementation, was designed to “enhance the safety and quality of residential housing.” This By-Law is part of a pilot program that seeks to regulate the rental of residential housing in Ward 1 and Ward 2, near the University of Windsor and St. Clair College.

Windsor Housing Providers Inc. (WHP), a not-for-profit organization representing landlords, challenged the By-Law’s validity, alleging it was enacted in bad faith and violated the Human Rights Code (the “Code”) and Canadian Charter of Rights and Freedoms (the “Charter”).

In this blog post, we provide a legal analysis of the recent decision in Windsor Housing Providers Inc. v. The City of Windsor (2024 ONSC 1781). We will provide a detailed and informative analysis of the legal basis for the court’s decision, based on our review as real estate lawyers.

Issue 1: Do the rights of entry to property in the By-Law conflict with the Canadian Charter of Rights and Freedoms?

WHP challenged the right of entry provisions in Section 9 of the By-Law, arguing that they breached tenants’ rights under the Charter. WHP claimed the By-Law allowed for unauthorized entries into rental units, potentially violating Section 8 of the Charter, which provides protections against unreasonable search and seizure.

The Court found no violation of tenants’ rights under the Charter. Sections 9.8 and 9.9 of the By-Law specify that officers may enter properties for inspection purposes at reasonable times but cannot enter dwelling units without the occupant’s authorization or a judicially issued warrant.

Justice Gorman clarified that the By-Law facilitates inspections, not searches or seizures. The Court’s finding was consistent with the precedent set in the decision of Belgoma Transportation Ltd. v. Ontario, where the Court differentiated between inspections and searches, finding no Charter violation when the intent is to inspect for compliance rather than to search for evidence of an offence.

Issue 2: Does the By-Law restrict tenants’ rights to sublet and contradict the Ontario Residential Tenancies Act?

WHP argued that the By-Law required tenants to obtain a license if they wished to sublet their rental units. They claimed this requirement conflicted with Section 97 of the the Ontario Residential Tenancies Act (the “RTA”). Section 97(1) of the RTA states that a tenant may sublet their rental unit with the consent of the landlord, and Section 97(2) specifies that a landlord shall not unreasonably withhold consent to the sublet. WHP contended that by imposing a licensing requirement, the RRL effectively added an unreasonable barrier to subleasing, which could deter tenants from exercising their rights under the RTA.

Justice Gorman clarified that there was a misunderstanding in WHP’s interpretation of the By-Law’s provisions. She found that the By-Law does not require tenants themselves to obtain a license to sublease. Instead, the licensing obligations apply to property “Owners” and “Operators,” not to tenants.

As a result, the Court found that there was no direct conflict between the By-Law and the RTA. The By-Law applies to landlords and property managers, requiring them to obtain licenses that ensure their properties meet specific standards. In contrast, the RTA governs the rights and responsibilities between landlords and tenants, including subleasing arrangements.

Issue 3: Is the residency requirement in the By-Law arbitrary and a violation of the Charter?

WHP argued that the “residency” requirements potentially discriminated against non-local property owners by mandating the designation of a local contact within Windsor-Essex. WHP suggested that such a condition might infringe upon Section 6 of the Charter, which encompasses mobility rights. Section 6(2) of the Charter states that every citizen of Canada and permanent resident has the right to move to and take up residence in any province, and to pursue the gaining of a livelihood in any province.

Justice Gorman addressed these concerns by clarifying the intent and application of the so-called residency requirements. She noted that the By-Law does not actually require property owners to reside within Windsor-Essex to obtain a license; instead, it mandates that they provide the name and contact information of a local individual who can act as a contact in case of emergencies. This requirement is designed to ensure that there is always someone readily available to handle urgent matters, which is consistent with the RRL program’s primary goal of protecting the health and safety of tenants.

Issue 4: Is the age restriction in the By-Law discriminatory and a violation of the Code and the Charter?

WHP challenged the age restrictions by arguing:

1) The By-Law’s requirement that individuals must be at least eighteen (18) years old to obtain or renew a license violates Section 4(1) of the Code, which protects sixteen- and seventeen-year-olds who have withdrawn from parental control from discrimination in contracting for accommodation; and

2) The age requirement contravenes Section 15 of the Charter, which protects against discrimination based on age.

The Court noted that there is no evidence that the majority of renters in Wards 1 and 2 are under 18 years old, and that “student” status is not a protected ground under the Code or the Charter. The Court also observed that the By-Law does not prevent young persons from obtaining accommodation, but only regulates the licensing of landlords who provide such accommodation. Therefore, the Court concluded that the By-Law does not infringe Section 4(1) of the Code or Section 15 of the Charter with respect to age.

Issue 5: Does the RRL violate privacy legislation by requiring the disclosure of personal information?

WHP argued that the requirement for landlords to submit extensive personal information violated Ontario’s Municipal Freedom of Information and Protection of Privacy Act (“MFIPPA”). WHP contended that the By-Law’s requirements for landlords to provide extensive details — such as names, titles, and contact information of directors, officers, and major shareholders — were not demonstrably necessary for the proper administration of the By-Law and thus constituted an overreach by the City of Windsor.

Justice Gorman responded by referencing Section 2.1 of MFIPPA, which clarifies that personal information does not include business identity information like names, titles, and contact details when associated with a business capacity. The Court referenced the precedent set in  London Property Management Association v. City of London (2011 ONSC 4710), which found that all landlords, whether individuals or corporations, are conducting business. Therefore, the information required by the By-Law pertains to business operations, not personal identities.

Issue 6: Does the Licensing Denial Based on Criminal Records Violate the Charter?

WHP contested Section 5.4 of the RRL, which prohibits issuing or renewing licenses to applicants with certain criminal convictions within the past five years. They argued it went beyond municipal authority and encroached on federal criminal law jurisdiction. They contended it constituted punishment, breaching Section 11 of the Charter protections against unlawfully punishing individuals for past crimes.

Justice Gorman addressed WHP’s claims by emphasizing that the RRL’s licensing criteria based on criminal records serve as a preventative measure, not a punitive action. She noted that the purpose of the By-Law is to enhance the safety of residential tenants. The inclusion of specific criminal offences for which a license can be denied — such as offences related to violence or property management — is designed to ensure that those responsible for managing rental properties can provide a safe environment.

What are the implications of this decision?

The RRL has been and continues to be in effect since February 13, 2023. This decision confirms the validity of the RRL program and the City of Windsor’s ability to regulate the rental housing market in Wards 1 and 2.

If you are dealing with clients searching for properties in Ward 1 and Ward 2, you should inform them of the RRL program requirements. For more information, please visit the City of Windsor’s website.

Want to learn more about the Pilot Program? Check out our previous blog that provides an in-depth analysis on the licensing requirements.