Show Notes:

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Lecture Slides:

Welcome to YouCounsel.

Can a landlord be held liable for the wrongdoing of its tenant which caused some injury or damage to a third party? This is the question that we’re going to address in this lecture and the answer to that question is: in certain circumstances, the answer is yes.  If you want to hear more about how and why I will explain that in the lecture.

We begin with our usual disclaimer that this lecture is not legal advice.  If you have any specific questions, you should contact a lawyer or a paralegal or the Law Society of Ontario for any referral.

Now this question was brought to the Ontario Court of Appeal in this case called Youssef v. Misselbrook. The decision just recently came out in early February 2020.  The case is quite relevant for landlords with respect to their liabilities or potential liabilities to third parties.

What happened in this case? The landlord own a farm property. It rented the farm property to a tenant.  The purpose was that it could use it as a farm to raise domestic animals.  The tenant had kept 5 donkeys (5 mules) on the property.  The property had a fence and a gate and the gate was unlocked. One could pry the gate open by force.  In this case, one police officer was able to push the gate open alone and so that was the circumstances of the gate. The 5 donkeys which were owned by the tenant escaped from the farm through that gate and onto the adjacent road. And the plaintiff, Youssef in this case, was riding his motorcycle in that area.  It was early in the morning around 3 am and he struck one of the donkeys and sustained very serious injuries. Youssef then ended up suing the tenant and the landlord for damages.

What did the landlord say? Prior to this case it is well-known that it is rarely that a landlord would be held liable for the wrongdoing of its tenant, especially, when the landlord is not on the property.  The landlord does not have the day-to-day control of the premises. The tenant is the only one using the property.  But in this case the landlord admitted responsibility for the maintenance of the fence—that was a fact that they admitted and they never withdrew that admission.  Having said that, they argued that keeping the gates locked and preventing the animals from escaping was solely the responsibility of the tenant because those were the tenant’s donkeys and the tenant had the use and control of the premises.

The Landlord said that they had no presence on the property and so accordingly the landlord argued that they had no duty of care. Remember, the concept of duty of care that we have explained in our lectures on tort?  It’s the same concept.  They argued that they have no duty of care and they have no statutory obligations—only the tenant ought to be held liable.  With respect to duty of care there was a subsidiary argument.  The Motion’s judge, who had made the decision earlier, held that the lease was governed by the Residential Tenancies Act.  And the Residential Tenancies Act has a provision that requires landlord to be responsible for the maintenance of fence and certain other areas of the property.  But the landlord argued that this was a matter – this was a commercial lease – that it was governed by commercial tenancy and not residential tenancy. And therefore the duty of care that was held to be on part of the landlord was incorrect.

What did the court say?  The court ruling was—the court first confirmed that Landlord admitted the responsibility for the condition of the fence. That was the primary admission. And then this responsibility required the landlord to conduct regular inspections and repairs. In fact there was evidence from the past that the landlord did in fact inspect the property and the fence on certain occasions and had carried out certain repairs as well.  Then the court held that the landlord failed to notice that the gate adjacent to a road was unlocked. And, then finally, because the landlord had admitted responsibility for the condition of the fence, the court held that it made no difference whether the lease was residential or commercial because they had that obligation.  On that basis the court held that the landlord is liable even though it was the tenant’s donkeys that caused injuries to Mr. Youssef.

Now, what is it that you want to take away from this lecture? Number one, obviously that there could be circumstances in which, if you are the landlord and you’re not on the property and you’re giving the control of property entirely to the tenant, there may be circumstances in which because of the tenants that you may be held liable or you may have direct duty of care obligations towards a third party.  You also want to notice that if you read the Residential Tenancies Act, it does impose certain obligations on the landlord for the maintenance of its property; specifically fences and some other areas of the property. That obligation cannot be passed on to the tenant.  It is the landlord’s obligation. If there is an injury to a third party because of the landlord’s failure to maintain the property or those areas of property, then the landlord will be held liable to the third parties—something to note. Also what you want to make sure is that in leases, if there are responsibilities divided between landlord and tenant within the statutory framework, then those responsibilities are clearly defined and if you require indemnification from the tenant in certain circumstances, then those clauses are there. Those kind of clauses are usually already present in commercial leases.. I also believe that it will make sense for the landlord to monitor the rental property appropriately for its usage. Because of this case, there may be circumstances where if the landlord is not monitoring the property and there is some damage to a third party, it may be held liable.  Finally, if there are ways to obtain insurance coverage for certain cases like these, then it may be a good idea to explore those.  I don’t know if insurance covers can be provided in some circumstances but something to explore and see if you have appropriate insurance coverage for your property.

Thank-you for watching.