November 30, 2010

Bill 131 - An Act to amend the Act respecting the Régie du logement and various Acts concerning municipal affairs

Corps

Madam Chairperson,

Minister,

Ladies, Gentlemen, Members of the Committee on Planning and the Public Domain,

My comment this morning will not be limited to the provisions of Bill 131, which are intended to amend the Act respecting the Régie du logement in order to give the Régie jurisdiction over any matter relating to setting rent, changing other conditions of a lease or revising rent. This jurisdiction would be exercised in the first instance and during the review process, and would be accompanied by powers to curb procedural abuse.

First of all, let me say that these amendments to the Act are necessary in order to give the administrative tribunal commissioners the jurisdiction they need to render justice in full. They are particularly necessary since the Superior Court’s ruling in the Ngo case, on September 3, 2009, to the effect that the Régie du logement cannot dismiss a proceeding because there is no provision in its constituting Act that explicitly gives it this power.  Bill 131 formally grants this power and, once sanctioned, will allow the Régie to dismiss a proceeding in certain cases, thereby avoiding abuse of the system by citizens seeking to delay the application of a decision against them by taking advantage of a legal vacuum.

I would like to give you an idea of the impacts that procedural abuse can have for the citizens who are victims of it. These consequences are aggravated by the fact that the delays for hearings before the Régie du logement are very long. 

Case 1: Evidence of procedural abuse

The owner of a single apartment complained to the Québec Ombudsman that he was unable to enforce a decision by the Régie ordering the eviction of his tenant for having failed to pay the rent. At the time of the hearing, the tenant owned more than $13,000 in rent arrears. When the owner contacted the Québec Ombudsman, the tenant had just filed his third application for revocation to the Régie du logement, without ever appearing before a commissioner to be heard.

The tenant eventually left the apartment six months later, but the owner had little hope of being able to recover the $23,000 owing to him.

 therefore feel this amendment to the Act respecting the Régie du logement is relevant and will have positive impacts for citizens.

Section 16

However, section 16 of the Bill grants an unusual retroactive scope to this new power. While this constitutes an exceptional response on the part of the legislator to a specific problem, I nevertheless feel it is important that this type of response should remain rare.

Given that the goal is to avoid the continuation of procedural abuse and its attendant impacts, such as the example I have just given, I feel such a provision is justified in this particular case.  Indeed, it seems reasonable that decisions made by the Régie to terminate procedures before the Bill came into force should not be invalidated.

Nevertheless, before concluding that this provision is in fact required, I considered the consequences of not providing for retroactivity.  In fact, and based on information from the Régie du logement, roughly 40 decisions made by commissioners since the Ngo ruling would potentially be affected by section 16. Those decisions that have not yet been executed may technically be at risk for repeat procedures by the party against whom they were made.  If section 16 were not to be included in the Bill, these people could go before the Court of Québec to have the Régie’s decision invalidated, thereby forcing the Régie to hear them again. However, once the Bill is assented to, it will give the Régie the power to prohibit a party from presenting a new application under the new section 63.2, and this time the commissioner would be legitimate in making such a decision.

I do not feel it would be appropriate to aggravate current waiting times for a hearing before the Régie du logement by failing to take action to prevent situations such as these.

A legal framework that needs to be strengthened

Having said this, I submit to the Committee members that this Bill is, in some respects, insufficient in that it does not amend the legal framework of the Régie du logement in such a way that it can release commissioners and reduce the impacts of delays in civil cases.  I believe there is an opportunity for the Committee to give Québec’s specialist housing tribunal the power to administer justice both effectively and economically, within a more reasonable timeframe.

Year after year, the waiting time for hearings has been the main reason for citizens’ complaints to the Régie itself and to the Québec Ombudsman.  In 2009¬2010, waiting times were the cause of 48.5% of the complaints received at the Régie’s own complaints office, and 22.9% of those received by the Québec Ombudsman in respect of the Régie du logement.

In my 2007-2008 annual report, I recommended:

  • That the legal framework under which the Régie du logement addresses cases involving the non-payment of rent be modified so as to incorporate a new procedure for improving the availability of decision-makers in this area while jointly hearing all cases within a reasonable timeframe.
  • That measures are taken to ensure that these changes are designed so as to respect the fundamental rights of all the parties, particularly with regard to procedures involving lease cancellation and the eviction of a tenant.

Basically, the aim of this recommendation was to ensure that applications for cancellation of a lease for failure to pay rent (51.4% of all applications to the Régie in 2009-2010), which are easy to process, may be dealt with by special clerks. Given the difference in salary scales (Special clerk (115 lawyer): $44,384 to $101,263 on April 1, 2010. Commisioner (DMO 3): $87,930 to $118,704 on Aprl 1, 2010), if special clerks were used instead of commissioners, it would cost approximately 33% less to process an equivalent number of lease cancellation applications.  Such applications account for between 15% and 20% of the commissioners’ time, and the use of special clerks would have the effect, at zero cost, of releasing approximately 5% to 7% of that time (or the equivalent of two or three commissioners), leaving more commissioners free to hear more complex cases.

I emphasize that this would be beneficial to both tenants and landlords.  It may be argued that what would be improved in reality would be the waiting time for cases involving non-payment of rent.  That, however, is not the aim of this measure. I remind you that the waiting time for this type of case is currently 1.3 months, making it one of the most reasonable.

In fact, the most positive impact of my recommendation is, once again, that it would allow the commissioners to process more civil cases, for which waiting times are longer.

Here are two examples of cases in which quicker hearings by the commissioners would have been required.

Case 2: Waiting time prejudicial to an elderly landlord who was being harassed by her tenant

A woman who owned a duplex was being harassed by her only tenant.  The woman, who lived alone, was 75 years old, and her tenant’s behaviour was frightening her and subjecting her to stress.  She filed a lease cancellation application with the Régie on July 11, 2005, so that she could evict the tenant. Her application was initially treated as urgent, and the preliminary hearing took place on July 25, 2005.

Unfortunately, the tenant was familiar with the system and was able to have the hearing postponed. The second hearing in the case did not take place until June 27, 2007, nearly two years later, and once again the tenant was able to obtain a postponement. The case was a complex one and needed several hearings. During all that time, the tenant continued to harass his landlord.  The landlord’s children even had to hire a security guard, so that their mother could leave the house. She finally obtained a ruling from the Régie, ordering eviction of the tenant, on September 25, 2009, more than four years after making her initial request. However, even then, the tenant made two further applications for revocation, both of which were rejected by the Régie, and he then tried to appeal the case. The Court of Québec rejected his motion, and he was finally evicted on May 7, 2010.

The time elapsed between the woman’s initial request and the eviction of her tenant was 1,761 days (or 4 years and 10 months).

Case 3: Waiting time prejudicial to tenants

To control rent increases during changes of tenant, article 1950 of the Civil Code of Québec allows a new tenant to ask the Régie du logement to set the rent when the landlord takes advantage of the situation to raise the rent abusively. 

A man and his co-tenants rented an apartment.  The landlord charged them a rent of $1,485 per month. A few weeks later, the new tenants learned that their predecessor had been paying $860 per month.  On October 30, 2007, the tenants approached the Régie, asking it to set the rent. However, while awaiting the hearing, they had to continue to pay $1,485 per month.  The Régie finally made its decision on June 25, 2008, nearly eight months later, ruling in favour of the tenants because the increase was clearly abusive. As a result, the landlord was required to reimburse $6,250 to the tenants. 

On July 3, 2008, the landlord asked for the decision to be reviewed, thereby suspending its enforcement.  One of the tenants contacted the Québec Ombudsman in January 2010, because they had still not been called by the Régie. We intervened, and asked for a hearing to be arranged.  The request for review was eventually heard on May 4, 2010, and on May 20, 2010, the tenants were informed of the decision, which confirmed the initial ruling.  They had therefore waited nearly two years for the matter to be settled, and had unfortunately been obliged to leave the apartment in the meantime, since they could no longer afford the high rent.

The total time elapsed between the initial application and the Régie’s final decision was 933 days (or more than two and a half years).  Waiting times such as these, which are by no means exceptional, make rent-setting ineffective as a control measure.

Under the current wording of section 30.2 of the Act respecting the Régie du logement, a special clerk may hear every application the sole object of which is the recovery of the rent or the cancellation of the lease, but only if one of the parties is absent. In practice, one of the parties is absent in more than 70% of cases, but because they do not notify the tribunal of their absence, the cases must still be heard by commissioners.  Even if the parties are both present, these cases are relatively easy to process, and could be heard by special clerks.

For this to be possible, all that is needed is an amendment to section 30.2, striking out the words “if, at the time fixed for the hearing, one of the parties is absent even though he has been duly notified” from the end of subparagraph (1) of the first paragraph. I am therefore recommending that such an amendment be made to Bill 131.

I remind you that there would be zero cost associated with this recommendation.

Conclusion

I conclude, Madam Chair, by pointing out that the provisions of Bill 131 concerning the Régie du logement are intended to correct an unfair situation by giving the Régie the power to dismiss certain proceedings.  This new power is necessary to prevent abuse of the rules of law and to allow the administrative tribunal to exercise its full jurisdiction. 

The long waiting times for both tenants and citizens who wish to obtain justice from the administrative tribunal provide ample justification for the Bill to be improved. One such improvement would be to give special clerks the power to hear all cases involving the non-payment of rent.  However, the Bill will not, once it becomes law, solve the problem of waiting times for hearings before the Régie du logement, which has persisted for many years.

I do not believe the simple fact of amending the Régie’s legal framework will solve this problem either, but given the extent of the challenge, I feel it is important that the legislator should give the Régie a legislative framework that will allow it to be as effective as possible, while continuing to respect the integrity of its mission.