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While it might be a financially friendly option, experts say you're risking your rights and your relationship
Even before the start of the pandemic, steep housing and rental costs in Toronto might have tempted those lucky enough to be able to rent a unit from a friend or family member offering a deal. But mixing business with pleasure, as always, comes with its own set of challenges.
Whether you’re renting from a friend who is living in the same space as you, or renting from a relative who acts as your landlord, your legal rights as a tenant might be compromised in different ways.
Trying to manage a personal relationship while grappling with privacy and money matters can jeopardize that relationship. If you need to assert legal rights as a tenant, you may find you have less protections than you think.
Kenneth Hale, the director of legal services at the Advocacy Centre for Tenants Ontario, notes that a shortage in regular and affordable rentals has forced many renters into choosing these kind of informal living situations.
But these living situations come with compromise.
“People are forced by economic circumstances into these relationships,” he says. “If you accept this relationship, where you don’t really have a lot of legal power, you’re getting to live in a nicer place than you would be able to afford in the private market and live with somebody who you want to live with.”
The situation gets complicated when the friend you’re renting from shares the living space with you.
“If you’re living in someone’s place, even if you’re paying rent, but you share a kitchen and bathroom with the owner, you’re not considered a tenant under the Residential Tenancies Act [RTA],” Hale explains.
He says this also extends to a situation where you’re living with your friend and your friend’s parent owns the condo or apartment you’re sharing.
“This comes from the idea that if you’re sharing a kitchen and a bathroom with someone, you’re in a much more personal relationship than the kind of the typical landlord-tenant relationship where the tenant has exclusive possession of vital parts of the home,” Hale says.
For some, cheaper rent and the comfort of renting from someone you know is worth the loss of protection under the RTA. But Hale says sacrificing your full legal rights is tricky because there isn’t much you can do to compensate for what you’re missing.
“You could write up a contract that provides for a specified amount of notice so you won’t be evicted from the place, or they won’t end the tenancy without 60 days notice, or you’ll have a 15-day grace period to pay your rent,” he says. “But there are difficulties with enforcing that.”
If you get into an argument with your friend and they change the locks and throw you out, or retaliate in some other way, Hale says your only option is to sue them in small claims court, which could take a while.
In the experience of Benjamin Ries, supervising lawyer for housing at Downtown Legal Services, it’s rarely a salvageable situation when family or friend relationships become entangled with the law.
“If it gets to the point where you want to assert your legal rights, or you’re going to try to insist on your rights, that’s something that is very hard to do while still maintaining a good, close relationship,” he says.
If you feel like you have to write up a separate contract with your landlord friend or family member prior to renting, or have to have a discussion outlining your expectations for privacy and autonomy, that’s a “red flag,” says Ries.
This is also the case, Ries says, when you’re engaging in a more traditional landlord-tenant relationship with a family member or friend. If you’re not sharing any areas with the landlord, you’re protected under the RTA like any other tenant.
But that doesn’t mean there won’t be complications.
“If you’re renting from your aunt, and you know your aunt is a particular person who is not going to approve of everything you want to do in your own space, you may try to agree on things in advance or have a clarifying conversation,” Ries says. “But I would say that’s a reason not to rent from your aunt.”
Hale notes that even while you have your full legal rights as a tenant in these situations, it might not be as easy to assert those rights.
“Your rights as a tenant may conflict with your obligations as a son or daughter,” he says.
For example, the RTA mandates a landlord must give a tenant 24-hours written notice before entering the premises, but a relative or friend might not feel obligated to follow that rule.
“It has some real perils in potentially jeopardizing those personal relationships over the long term, because the business side of it gets in the way,” Hale says. “This can be even more serious because you’re really depending on them for something that you need for survival.”
Ultimately, you’re taking a risk, either with your personal relationship or with your housing situation – or both, Ries says.
“Most people know that it’s dangerous or that it is not without risk, but maybe it’s the only good option that they have,” he explains. “It’s hard for people to find suitable and affordable places to live. And so I understand why people end up thinking they might get a better deal with a family member.”
This post has been updated.
Resident Expert is a column about renting, buying and owning in the city. Send your queries to realestate (at) nowtoronto.com. NOW writers will talk to relevant experts to get the answers. Letter writers will remain anonymous. Read previous columns here.
This column is not legal advice. You should not act or rely on the information provided. To ensure your interests are protected, retain or formally seek advice from a lawyer.