When tenants want to transfer their rental unit to someone else, they enter a complex area of Ontario rental law with strict rules and severe consequences for getting it wrong. Recent analysis of Landlord and Tenant Board (LTB) decisions reveals that unauthorized occupancy cases result in some of the highest financial penalties in rental law, with awards regularly exceeding $20,000 and reaching as high as $43,000.
Understanding the rules around assignments, subletting, and unauthorized occupancy is crucial for both landlords and tenants. Tenants who improperly transfer occupancy face eviction and substantial financial liability, while landlords must navigate strict procedural requirements to protect their property rights.
The Legal Framework: Assignments vs. Subletting
Ontario's Residential Tenancies Act (RTA) provides two legal mechanisms for tenants to transfer their rental units: assignment and subletting. Understanding the difference is crucial.
Assignment
An assignment transfers the entire tenancy to a new person. The original tenant gives up all rights and obligations, and the new person becomes the tenant with a direct relationship to the landlord.
Subletting
A sublet creates a temporary arrangement where the original tenant remains responsible to the landlord but allows someone else to occupy the unit. The original tenant maintains the tenancy and can return.
Both require landlord consent under Section 95 of the RTA, and landlords cannot unreasonably withhold consent.
The Unauthorized Occupancy Problem
When tenants transfer occupancy without following proper procedures, they create "unauthorized occupants" - people living in rental units without legal tenancy rights. This situation creates significant problems for all parties involved.
What Constitutes Unauthorized Occupancy
The LTB consistently finds unauthorized occupancy when tenants:
- Transfer keys and control without landlord consent
- Vacate while allowing others to remain
- Collect rent from occupants without proper subletting procedures
- Fail to follow RTA requirements for assignments or sublets
In KG-and-TG-v-BD-20180213, the tenant "transferred keys and control of the unit to Unauthorized Occupants without Landlords' consent," creating a clear case of unauthorized occupancy.
The 60-Day Rule: Landlords' Time Limit
Landlords have only 60 days from discovering unauthorized occupancy to file applications with the LTB. This strict timeline protects tenants from delayed enforcement actions.
Successful Enforcement Within 60 Days
In Lau-v-Withers-20210927, the "Landlord became aware of unauthorized occupancy on February 22, 2020" and "filed application on February 26, 2020, within 60 days," allowing the application to proceed.
Failed Enforcement: Missing the Deadline
However, in TCHC-v-L-E-20211122, the landlord "was aware of unauthorized occupancy by Tenant's daughter as early as February 2019, but did not file the application until November 2019, which was outside the 60-day window." The application was dismissed due to this procedural failure.
Financial Consequences: The High Cost of Unauthorized Occupancy
Unauthorized occupancy cases result in some of the highest financial awards in rental law, as occupants must pay compensation for their entire period of unauthorized use.
Substantial Compensation Awards
The financial penalties are severe:
- $43,329.60 in pinedale-properties-v-hossain-20240828
- $34.68 per day ongoing in Margoma-Holdings-v-Said-20220131
- $21,315.07 in Ige-v-Kachurowski-20200804
- $20,933.77 in EQB-Ltd-v-Ramdial-20210318
- $20,391.24 in Hamilton-v-Matthews-20211007
Daily Compensation Rates
Unauthorized occupants typically pay daily compensation rates based on monthly rent divided by 30 days, plus application fees. These rates compound quickly over extended periods of unauthorized occupancy.
Common Unauthorized Occupancy Scenarios
Death of Original Tenant
When tenants die, family members or friends sometimes continue living in the unit without proper authorization. In Hamilton-v-Matthews-20211007, after "Tenant, Ruby Matthews, passed away in October 2019," the "Unauthorized Occupant, Bruce Kinnard, has been living in the unit since Tenant's passing" without paying rent.
The unauthorized occupant was ordered to pay $20,391.24 for nearly two years of unauthorized occupancy.
Tenant Departure Without Notice
Tenants sometimes leave units while allowing others to remain. In Orchard-Grove-Apartments-Inc-v-Rurarz-20220307, the "Tenant informed Landlord he was no longer living in the rental unit" but left an unauthorized occupant behind.
The result: $7,202.85 in compensation plus ongoing daily charges.
Subletting Without Consent
Some tenants attempt to sublet rooms or entire units without landlord approval. In pinedale-properties-v-hossain-20240828, the "Unauthorized Occupant sublet individual bedrooms" without consent, resulting in the highest penalty found: $43,329.60.
Employee Housing Transitions
Former employees sometimes remain in employer-provided housing after employment ends. In mathur-v-byerley-20240912, a "Tenant was a former employee who resided in the rental unit while working" but "stopped working for the Landlord in December 2022" while his girlfriend remained as an unauthorized occupant.
The unauthorized occupant was ordered to pay $16,832.97 plus ongoing daily compensation.
Social Housing: Special Rules
Social housing providers often have additional restrictions on assignments and subletting. In Ottawa-Community-Housing-v-Asian-Daniel-20211102, the "Landlord is a social housing provider and is exempt from subsection 100(2) of the Act" and "is not permitted to consent to a request to assign or sublet a tenancy."
This means social housing tenants generally cannot assign or sublet their units, making any transfer automatically unauthorized.
When Unauthorized Occupancy Claims Fail
Not all unauthorized occupancy applications succeed. Several factors can defeat these claims:
Tenant Still in Residence
If the original tenant remains in the unit, there may be no unauthorized transfer. In JG-v-TJ-2019-TSL-07965-19, the "Board found that the Tenant had not vacated the unit and therefore could not have sublet or assigned it to her brother."
Landlord Consent or Knowledge
Sometimes landlords' actions suggest consent to occupancy arrangements. However, mere knowledge of occupancy doesn't create consent - landlords must explicitly agree to transfers.
Procedural Failures
Landlords must follow strict procedures, including the 60-day filing deadline and proper service of applications.
The Assignment and Subletting Process
When tenants want to legally transfer their units, they must follow specific procedures:
Step 1: Request Landlord Consent
Tenants must formally request landlord consent in writing, providing:
- Details about the proposed assignee/subtenant
- Reasons for the transfer
- Duration (for sublets)
- Any relevant background information
Step 2: Landlord Response
Landlords have seven days to respond to assignment requests and 30 days for sublet requests. Failure to respond within these timeframes may constitute consent.
Step 3: If Consent is Refused
If landlords refuse consent, tenants can:
- Apply to the LTB to determine if refusal was unreasonable
- Terminate their tenancy if assignment consent is unreasonably refused
- Proceed with unauthorized transfer (not recommended due to severe consequences)
Landlord Rights and Obligations
Right to Refuse
Landlords can refuse assignment or sublet requests, but refusal must be reasonable. Factors courts consider include:
- Financial capacity of proposed occupants
- Suitability for the specific unit
- Landlord's legitimate interests
- Impact on other tenants
Procedural Requirements
Landlords must:
- Respond within statutory timeframes
- Provide reasons for refusal
- Act reasonably in their decision-making
- File applications within 60 days of discovering unauthorized occupancy
Compensation Rights
When unauthorized occupancy occurs, landlords are entitled to:
- Daily compensation for use of the unit
- Application filing fees
- Interest on unpaid amounts
- Eviction of unauthorized occupants
Tenant Rights and Protections
Right to Assign or Sublet
Tenants have fundamental rights to assign or sublet their units, subject to reasonable landlord consent.
Protection from Unreasonable Refusal
If landlords unreasonably refuse assignment requests, tenants can terminate their tenancy with proper notice.
Due Process Rights
Even unauthorized occupants have some procedural rights, including:
- Notice of applications against them
- Opportunity to be heard at LTB hearings
- Right to legal representation
Best Practices for Tenants
Before Transferring Occupancy
- Always seek landlord consent in writing before any transfer
- Understand the difference between assignment and subletting
- Provide complete information about proposed occupants
- Follow proper procedures under the RTA
- Keep detailed records of all communications
If You Need to Leave
- Don't abandon the unit with others remaining
- Give proper notice if terminating tenancy
- Ensure all occupants have legal status
- Transfer utilities and other obligations properly
- Return keys to landlords when appropriate
Avoiding Unauthorized Occupancy
- Never collect rent from occupants without proper subletting agreements
- Don't transfer keys without landlord consent
- Maintain your tenancy if you plan to return
- Communicate with landlords about temporary arrangements
- Seek legal advice if unsure about procedures
Best Practices for Landlords
Preventing Unauthorized Occupancy
- Monitor your properties regularly
- Maintain communication with tenants
- Respond promptly to assignment/sublet requests
- Document all interactions with tenants and occupants
- Understand the 60-day filing deadline
When Unauthorized Occupancy Occurs
- Act quickly - you have only 60 days to file applications
- Document the unauthorized occupancy with photos and evidence
- Attempt communication with unauthorized occupants
- Calculate compensation from the date occupancy began
- File proper applications with the LTB
Reasonable Consent Decisions
- Consider legitimate factors only
- Respond within statutory timeframes
- Provide clear reasons for refusal
- Don't discriminate based on prohibited grounds
- Seek legal advice for complex situations
The Broader Impact on Rental Housing
Unauthorized occupancy cases reflect broader challenges in Ontario's rental market:
Housing Affordability
Many unauthorized occupancy cases involve tenants trying to share housing costs through informal arrangements, reflecting the broader affordability crisis.
Legal Complexity
The complexity of assignment and subletting rules creates risks for both landlords and tenants, particularly those without legal knowledge.
Enforcement Challenges
The 60-day filing deadline creates enforcement challenges for landlords while protecting tenants from delayed actions.
Special Considerations
Roommates vs. Subtenants
The RTA distinguishes between roommates (who share space with the tenant) and subtenants (who have exclusive occupancy rights). In Hines-v-Rootes-20220125, the landlord's "own correspondence referred to the occupant as a 'roommate', and the Act does not prohibit roommates."
Student Housing
Student housing sees frequent unauthorized occupancy issues due to changing academic schedules and financial pressures.
Family Situations
Family members often assume they can remain in units after tenants leave, not understanding the legal requirements for proper transfers.
Key Takeaways
- Landlord consent is mandatory for all assignments and sublets
- Unauthorized occupancy penalties are severe, often exceeding $20,000
- Landlords have only 60 days to file applications after discovering unauthorized occupancy
- Proper procedures protect both parties from legal complications
- Social housing has additional restrictions on transfers
- Daily compensation rates compound quickly over time
- Documentation is crucial for both landlords and tenants
Understanding unauthorized occupancy, assignment, and subletting rules is essential for navigating Ontario's rental market. For tenants, following proper procedures prevents devastating financial consequences and protects tenancy rights. For landlords, understanding these rules ensures effective property management while respecting tenant rights.
The cases analyzed here demonstrate that the LTB takes unauthorized occupancy seriously, imposing substantial financial penalties while maintaining procedural protections for all parties. Whether you're a tenant considering transferring your unit or a landlord dealing with unauthorized occupants, understanding these complex rules is essential for protecting your rights and interests in Ontario's rental housing system.
The message from these decisions is clear: when it comes to tenancy transfers, there are no shortcuts. Following proper legal procedures is not just recommended - it's essential for avoiding the severe financial and legal consequences that follow unauthorized occupancy arrangements.
