Law Times

Law Times • June 13, 2011 FOCUS Confusion reigns with smart meters Landlords, tenants still figuring out what the law really is BY JUDY VAN RHIJN For Law Times W ith the rollout of smart meters across the province well underway, tenants and land- lords are renegotiating who will shoulder electricity costs. Recent tribunal decisions and legislative changes, however, have left some tenants with four diff erent frameworks that could apply depending on the timing of the lease changes reassigning responsibility for electricity ex- penses. Th e smart meter is a device that records how much elec- tricity people are using and the time of day they're consuming it. While they're now manda- tory in single-family dwell- ings and new multi-residential developments, there has been signifi cant uncertainty about their introduction at apartment buildings that have bulk meters or sub-meters. Geordie Dent, executive di- rector of the Federation of Met- ro Tenants' Associations, says the introduction of smart me- ters has been "a large headache and a debacle" for his organiza- tion. "It was pretty clear that the issue was dealt with already in the Residential Tenancies Act, but that was ignored. When the boards reaffi rmed and enforced the legislation, it created these four diff erent scenarios. Before Nov. 3, 2005, there is really no law dealing with the issue. Tenants are left in the lurch, and landlords are allowed to do anything they like." Mary Todorow, a research and policy analyst at the Ad- vocacy Centre for Tenants Ontario, notes that during this period energy companies were using aggressive sales tactics to persuade landlords to remove volatile electricity costs from their bottom lines. "During 2004 and 2005, there was a Wild West culture because the rules were unclear," she says. "Even after Nov. 3, 2005, when amendments were made to the Energy Conservation Responsi- bility Act to prohibit discretion- ary suite metering, the provid- ers and landlords kept going because they thought the gov- ernment was going this way." "Th ousands were installed, and all those contracts were il- legal," Dent says. "Th is caused a lot of stress with tenants receiv- ing threats that their electricity would be cut off ." On March 24, 2009, the Ontario Energy Board issued a compliance bulletin saying it would bring enforcement actions against those who had illegally introduced suite meters. On Aug. 13, 2009, it released an interim order making it illegal to install suite meters in multi-residential buildings. "It decided that there would be no fi ne or any kind of enforcement for groups operating illegally," Dent says. "But it said the contracts that tenants were Untitled-3 1 signed up to were unenforceable and unauthorized. It then set out a new framework for what land- lords had to do to successfully introduce smart meters." Th e board stepped in dur- ing a challenge by residents of a multi-residential development on Walmer Road in Toronto to the unilateral withdrawal of electricity-inclusive rents upon the installation of smart meters. Claire Hepburn, a staff lawyer at Downtown Legal Services at the University of Toronto, was involved in the case. "Th e issue really arose when one particular landlord decided, in contravention of the Residen- tial Tenancies Act, to switch over rental units that held all- inclusive rent of $1,000 per month for a $20.16 rent reduc- tion. Th e Landlord and Tenant Board agreed with us, and the Divisional Court agreed with us that it was illegal." Benjamin Ries, tenant duty counsel at the advocacy centre who was also involved in the Walmer Road case, notes the situation added to the confu- sion prevailing among renters. "After the Ontario Energy Board issued its compliance bulletin, landlords started putting their programs in abeyance. Th ey bumped the rent back up and treated it as inclusive again. In the case of tenants who had just moved in, the landlords were jumping rents up unilaterally, which they are not really al- lowed to do." Hepburn concedes there can be environmental benefi ts from the installation of smart me- ters. "Th e problem is that ten- ants can't control their energy costs," she says. "Th ose build- ings often have older fridges, and the energy effi ciency of the units is low." Hepburn points out that the people who consume the most electricity are the ones who are home all day: families with young children, the unem- ployed, the elderly, and people with disabilities. In January, the govern- ment introduced the Energy Consumer Protection Act to replace s. 137 and 138 of the Residential Tenancies Act. "Th e new amendments don't speak to the specifi c undoing of the illegal changes from the false start made in 2008 and 2009," says Ries. Th e new provisions require landlords to obtain the consent of the sitting tenant to transfer electricity costs after installing suite metering and provide in- formation to allow an informed decision. When a new tenant is moving into an apartment with a smart meter, the landlord must provide information on electricity consumption in the rental unit for the most recent 12-month period. Todorow is disappointed that the informa- tion required doesn't include an energy audit given that the landlord is responsible for the building's energy effi ciency. She notes as well that the rules con- tain incentives for both sides. "Th ere are things a landlord must do to contribute to ten- ants' discretionary use, such as provide an energy-effi cient re- frigerator. Th ere are also things a tenant can do." According to Dent, the re- sult of this tumultuous history is a tremendous amount of con- fusion and lack of education. "I don't think we'll ever clean up the mess because in cases where there are clear violations, there are oftentimes enforcement problems. Once people have paid money to the landlord, it's hard to get it back." PAGE 9 The title insurer that puts you front row, centre Putting the legal community front and centre has made us the #1 choice with Canadian lawyers for over a decade. While other title insurers go head to head with you for your business, Stewart Title does not support programs that reduce or eliminate the lawyer's role in real estate transactions. Instead, we focus on what matters to you: • unsurpassed policy coverage • competitive pricing • underwriting expertise At Stewart Title, we keep real estate transactions where they belong – in your office! 1-888-667-5151 or www.stewart.ca ON www.lawtimesnews.com 6/3/11 11:24:18 AM

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