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Ontario housing co-ops are governed by a combination of provincial and municipal legislation, the co-op’s internal rules and policies, and federal regulations (if the co-op receives federal funding). Except in cases of eviction though, the Residential Tenancies Act (“RTA”) and its tenant protections do not apply to co-ops.

So, how can Ontario co-op residents enforce their legal rights? We’ll explain below.

Background

Inspired by student residence co-ops in the 30s and 40s, housing co-ops proliferated throughout Canada with government support between the late 60s through early 90s. Their intended purpose was to provide affordable housing, foster diversity in residential communities, and promote secure tenure for households unable to buy their own homes.

To this day, housing co-ops operate with funding from government subsidies and monthly fees members pay in lieu of rent. Holding equal voting rights and sharing management responsibilities, the resident members of housing co-ops collectively take on the technical role of “landlord.”

Co-operative Corporations Act

The primary law governing housing co-ops in Ontario is the Co-operative Corporations Act (the “CCA”). The CCA outlines the general framework for all co-ops in Ontario, including housing co-ops. It establishes requirements for co-op membership, members’ voting rights, rules for expelling members, and the responsibilities of the co-op’s board of directors.

Most co-ops, additionally, have contracts with the government called operating agreements. Those co-ops receiving assistance through federal programs have operating agreements with Canada Mortgage and Housing Corporation (“CMHC”) setting out certain requirements and responsibilities the co-op has in return.

Finally, most housing co-ops require members to sign occupancy agreements setting out the rights and responsibilities of  members and co-op management.

Voting

Pursuant to the CCA, co-op members each have one vote. Co-ops must hold annual members’ meetings, though the board of directors may call general members’ meetings at any time. Where five percent of the co-op’s members request it, the directors are required to call a general meeting. 

Board of Directors

Every co-op must have a board of directors, accountable to the co-op’s members and responsible for the governance of the co-op. The board must make decisions in accordance with the co-op’s internal by-laws, and is bound to act in the co-op’s best interests. 

Governing rules 

Every Ontario co-op must have articles of incorporation and by-laws compliant with the CCA. 

• The articles officially establish the co-op as such. They include the co-op’s legal name, address, and headquarters, among other technical information about the co-op.

• The co-op’s by-laws govern the co-op’s internal operations, including membership obligations, management of co-op property, and the election of the board of directors. They are passed by the co-op’s board of directors and must be confirmed by at least two-thirds of the votes cast at a general meeting of the co-op’s members. Any co-op member may request a copy of their co-op’s by-laws from the co-op’s management office. 

The co-op must allow members to examine the following documents:

• the co-op’s articles of incorporation;

• the co-op’s bylaws, resolutions and special resolutions;

• the co-op membership register;

• the register of the co-op’s directors;

• the minutes of meetings of members and committees; and

• the register of all transfers of securities.

Members are permitted to make copies of these documents. 

Inspections and audits 

A group of co-op members may request an external government inspector to investigate and report on the affairs and management of the co-op if 10% of the co-op’s members request it in writing. 

The members must point to circumstances suggesting (among others):

• fraudulent or illegal intent; or

• oppressive, or unfairly prejudicial business or board of directors’ activities.

Furthermore, an individual co-op member may apply for an inspection or audit of a co-op’s accounts and records. Per s. 146(1) of the CCA, a court may grant one if satisfied that the application is made in good faith, and that it appears to be in the interests of the co-op. 

Housing Services Act

The Housing Services Act (the “HSA”) applies where a co-op is run by a municipality and serves as a statutory framework for subsidized public housing in Ontario.

Under the HSA, funds are disbursed by the province through designated Service Managers who enter into funding agreements with provincial housing co-ops, subject to certain statutory conditions. The Service Managers are municipalities, and have the authority to make certain decisions under the HSA. 

Sections 83 and 85 of the HSA provide for circumstances (“triggering events”) in which the Service Manager may reduce, discontinue or suspend certain subsidy payments to the co-op; appoint an external advisor, manager, or receiver; or remove and/or replace the co-op’s board of directors. 

For example, last year, at Co-op Voisins in Ottawa, an interim, government-appointed board of directors was installed pursuant to ss. 83 and 85 of the HSA after disputes between two groups of members, each claiming to be the official board of directors, proliferated to the point of frozen accounts and lack of authorized signing officers. The City of Ottawa, as the co-op’s Service Manager, applied to the Ontario Superior Court of Justice to compel the co-op to deliver property and records to the City. Their request was granted. 

Internal Dispute Resolution  

If a co-op member has concerns or complaints regarding co-op management, their first course of action should be to raise the matter internally with management. If this fails, they may request to bring their matter up for discussion at a general meeting. With 5% of the co-op’s members in support, the board of directors must call a meeting. 

Depending on the co-op’s internal by-laws, internal mediation may also be an option. The member should inquire with the co-op’s management. 

Members should always document their complaints and keep a written record of the dispute resolution process from start to finish. They should always request written responses from co-op representatives, which can be used as evidence in the future, if necessary.

Registering a By-law Complaint 

Co-op members may additionally bring any by-law violation, or potential violation, to the attention of their municipality by way of a by-law complaint. Subjects of these complaints may include excessive noise levels, violated property maintenance standards, and even overcrowding, for example. 

Depending on the municipality, residents may generally submit their complaints online, by phone, or in-person at their city’s local office. 

Taking Co-opS to Court 

A co-op’s by-laws are essentially contractual provisions between the co-op and the co-op’s members. As such, a housing co-op may be sued for breach of contract if the co-op has breached its own by-laws. It may also be sued for breaching its occupancy agreement with a member or group of members. 

Moreover, if a co-op violates its duty of care toward a co-op member (or members), thereby causing the member (or members) damage as a direct result of the breach, the co-op can be sued for negligence.

Finally, in situations where co-op members are subject to discrimination or harassment by their co-op, they may file a complaint with the Human Rights Tribunal of Ontario (“HRTO”). In one instance, the HRTO granted co-op members $30,000 ($3,000 each in a joint application of 10 members) in compensation for their co-op’s failure to respond to a significant, vulgar harassment campaign propagated against them in their co-op. 

Our legal professionals help co-op residents, managers, and directors dealing with housing co-op-related legal matters. If you’re interested in learning more about our ability to assist with your matter, take a look at our housing practice page and book a 15 minute free or 60 minute paid consultation with us using the button below.