Hot water tank rental is seemingly treated by the Landlord and Tenant Board as a utility (see LTB examples below). So if the tenancy agreement states that the tenant is responsible for it, it would be on the tenant. Otherwise, it would be on the landlord.
I have heard some theoretical arguments against this, including privity of contract* and an idea that this is perhaps "no different" from furnace rentals or any appliance rentals or any maintenance fees or property taxes that should be on the landlord, but LTB rulings seem to treat hot water tank rental as a standard utility.
(*The doctrine of privity of contract is a common law principle which provides that a contract cannot confer rights or impose obligations upon any person who is not a party to the contract.)
It is important to note that the doctrine of contra proferentem applies, i.e. any ambiguity in the contract would be interpreted against the interests of the draftsman (i.e. against the landlord, in this case). So if the contract is silent or truly ambiguous about hot water tank rental bill, it would be on the landlord.
If the lease states that paying for hot water tank rental is the tenant's responsibility, but the tenant stops paying it, the landlord's recourse for the breach of contract would be typically an N5 notice under RTA section 64 for substantial interference with landlord's lawful right, privilege or interest (or a shorter and non-voidable N7 notice under RTA section 65 if the landlord lives in the same building which has no more than three units) with an L2 application for eviction.
Landlord's Self-Help Centre's position:
"Is the hot water tank rental the responsibility of the landlord or is that a utility that the renter should pay when they pay a monthly rent plus utilities?
- The Residential Tenancies Act states that the landlord is responsible for “vital services” which are defined as hot or cold water, fuel, electricity, gas and heat unless the tenant expressly agrees to “obtain and maintain” the vital services. In order to have the tenant pay for the rental of the hot water tank the lease agreement should be specific and state that “the tenant expressly agrees to obtain and maintain all vital services including heat, electricity, water, hot water and rental of hot water tank”."
Let's look at some LTB examples:
(1)
"N5 – Serious Interference with Landlord’s Lawful Rights
6. The Landlord served a termination notice for the Tenant’s failure to pay for the rental cost of the hot water tank.
7. The parties disagree that this expense is the responsibility of the Tenant.
8. At the hearing on March 1, 2016 the Landlord produced his copy of the tenancy agreement which specifically includes the hot water tank rental under the Tenant’s responsibilities. The Tenant produced her copy of the agreement which is respects is identical to the Landlord’s except for the inclusion of the hot water tank in paragraph 7 of the agreement. Both the copies were photocopies.
9. At the hearing on March 8, 2016 the Landlord produced the original signed copy of the tenancy agreement which is typed and handwritten in black and blue pen. This original is identical to the Landlord’s photocopy.
10. The Tenant has no explanation of the discrepancies in the two copies and denies that the hot water tank was ever discussed by the parties. It is noted that a careful examination of the Tenant’s photocopy shows a faint line where the hot water tank is listed which could be from the words being covered.
11. While the parties disagree on the issue the best evidence is the original signed copy of the tenancy agreement, I find that the Tenant is responsible for the cost of the hot water tank.
12. The Board was advised that RHC will not transfer the rental account into the Tenant’s name. The Landlord has paid at least two billings for the hot water tank since the start of the tenancy totalling $217.13. It appears from the billings that there is a missing account for a period in 2015.
13. This conduct has substantially interfered with a lawful right, privilege or interest of the Landlord."
(2)
"THE HOT WATER TANK RENTAL ISSUE
15. Pursuant to section 82 of the Act, on an application for non-payment of rent by a landlord, a tenant is entitled to raise any issue orally at the hearing that could be the subject of an application.
16. The Tenant here alleges that the Landlord in essence collected an illegal charge or illegal rent by failing to pay for the rental of the hot water tank as agreed to in the written tenancy agreement.
17. We note that the tenancy agreement does not actually say the Landlord will pay the rental amount for the hot water tank. Rather what it says is that the Tenant is responsible for paying for all utilities. In a separate paragraph it says the Landlord is responsible for providing appliances and the list of appliances includes the hot water tank.
18. There is no dispute that the monthly utilities bill from the provider to the Tenant includes a monthly charge of $20.33 for hot water tank rental and the Tenant has been billed for ten months by the utilities company.
19. It is a general rule of contract interpretation that any ambiguity in a contract shall be interpreted against the person who drafted the contract; in this case that would be the Landlord. Here, however, we do not find the agreement between the parties to be ambiguous. The Landlord’s obligation under the lease was to ensure the list of appliances was physically present in the rental unit. The Tenant’s obligation was to pay for all utilities and the hot water tank rental was always a charge on and part of the utilities bill.
20. It would appear from the evidence of the parties that this interpretation of the tenancy agreement is also consistent with the behaviour of the Tenant. His assertion that the Landlord should be responsible for a portion of the utilities bill is a new one and appears to be an after the fact argument following non-payment of the rent and the disintegration of the relationship between the parties.
21. Given the above, the Tenant’s section 82 claim with respect to illegal charges or illegal rent is dismissed."
(3)
"5. There is no dispute between the parties that the Tenants are responsible under the lease for gas, electricity and the hot water heater rental charges. The bills are in the Landlord’s name and the Tenants are supposed to reimburse him. But the Tenants have not. As of the date of hearing the outstanding hydro bill was $4,570.47; the total utilities owing were $4,962.34."
(4)
"5. She met NB, acting for the Landlord, who confirmed that the rent for the unit was $750.00 per month plus hydro.
6. On about September 30, 2009, the Tenant attended at the offices of RP to sign the lease. The lease was signed on behalf of RP by SL.
7. The Tenant did not review the lease document carefully, as she had her then-2 week old infant daughter with her, and she assumed that the document conformed to the agreement she had made with NB concerning the unit.
8. According to the lease document, the rent was to be $750.00 plus “utilities”, which the Tenant assumed meant hydro, as had been advertised and agreed on with NB. Paragraph 8 of the second page of the lease lists a number of services, and beside each is a space where a check mark can indicate whether the particular service is the responsibility of the Landlord or the Tenant. The photocopy of the lease document provided by the Landlord has a check mark showing that the Tenant is responsible for Gas and the Hot water tank, as well as Electricity. There is a check mark indicating that the Landlord is responsible for Water/Sewer.
9. In accordance with her understanding of the terms of her rental agreement, the Tenant had the Hydro electric bill for the rental unit put in her name, and she has paid for that utility throughout her tenancy.
10. About 6 months after the tenancy began, the Tenant was contacted by NB, who asked her if she could contribute $10.00 per month to the cost of water for the rental unit. The Tenant agreed to do so, and her Tenant Ledger showed a $10.00 per month charge commencing March 2010.
11. The Tenant was not asked to, nor did she ever, put the gas account into her own name, nor was she asked by the Landlord to contribute to payment of the gas bill, until June 2012.
12. The Landlord alleges that a letter was sent to the Tenant on May 18, 2012, stating in part “…this is to confirm that the Gas bill is your responsibility effective June 1, 2012. It was discovered that unit #4 [the Tenant’s unit] has its own gas meter and it is not shared. No outstanding cost to the previous gas bills will be charged due to our error.” The letter was signed on behalf of RP by MB. The Tenant denies having received this letter.
13. In June 2012, the Tenant, for the first time in her tenancy, received a gas bill from Enbridge. The invoice is dated June 20, 2012, covers the billing period June 10, 2012 until June 18, 2012 and is addressed to “Owner/Occupant of Property”. The Tenant did not authorize any change to the billing for gas, and had not agreed to assume responsibility for payment of gas.
14. It is apparent from this invoice that Enbridge dealt with this account as a new account, rather than a continuation of a previous account, because the invoice contains a charge of $250.00 for a “cash deposit request”, $25.00 for a “new account charge”, and $7.35 for “New Direct Energy Home Services Charges”.
15. The Tenant did not authorize this change, and there was no explanation by the Landlord as to how this change of billing came about.
16. Upon receiving this invoice, the Tenant contacted RP, and spoke to SAB who told the Tenant that the Landlord “does not want to pay for the gas anymore”.
17. The Tenant, who is a single mother with 4 daughters, now aged 16, 10, 7 and 3 years, and whose source of income is Ontario Works, did not pay the gas bills, which include charges for the rental of a hot water heater.
18. The Landlord continued to refuse to pay the gas bills, as a consequence of which the gas service to the rental unit was cut off on October 11, 2012. The Tenant advised SAB at RP about this immediately, as the Tenant had no hot water in her unit. SAB responded that the Landlord would not restore the gas and that the “owner does not want to pay anymore”.
19. The Tenant contacted the Ministry of Municipal Affairs and Housing Investigation and Enforcement Unit on October 15, 2012 concerning the lack of gas and hot water. The Landlord provided a copy of the lease document in support of the assertion that the Tenant was responsible for the payment of gas. The Landlord did not provide the Ministry with any other information concerning the issue. On December 16, 2012, the Ministry advised the Landlord that the file was closed, due to “insufficient evidence” provided to the Investigation and Enforcement Unit.
20. The Tenant and her 4 children have been without hot water in the rental unit from October 11, 2012 to the date of the hearing.
21. The Tenant has had to go to friends and relatives in order to shower and bathe herself and her children. She has had to boil water on the electric stove in order to wash dishes or to do any housecleaning. Her family life with her daughters has been disrupted and interfered with, as they must travel significant distances, often at night, for the most basic needs of personal cleanliness and grooming. The lack of hot water has created friction between the Tenant and her daughters. The Tenant has incurred higher costs of hydro because of the need to boil water for the most basic of housekeeping tasks. The family’s enjoyment of the rental unit has been seriously interfered with by the lack of gas service and hot water.
22. The only witness produced by the Landlord at the hearing was DS, who is the viewing agent/office co-ordinator with RP. She has been an employee since July 4, 2011. Accordingly, she was not privy to any of the discussions between the Tenant and NB at the outset of the tenancy, nor did she have any personal knowledge of the conversations between the Tenant and other members of the Landlord’s staff.
23. All of the evidence provided by DS was hearsay, resulting from her “overhearing” one side of the telephone conversation of her work colleagues.
24. In an effort to demonstrate that the Tenant had paid gas charges from the outset of the tenancy, the Landlord produced a “Tenant Account History” showing that the Tenant had been charged and paid $10.00 per month for “gas”. The copy of the Tenant Account History produced by the Landlord is dated January 31, 2013. The Tenant produced a copy of the same Tenant Account History, which had been provided to her by the Landlord on September 5, 2012, in which the description for the $10.00 charges shows as “water” and not “gas”.
25. Although she claimed to know everything that was going on at RP, when asked who altered the records and why, DS had no explanation, except to speculate that it was a “correction” of a “typographical error”.
26. I do not accept this explanation. I find that the charge of $10.00 per month, which began in March 2010, was for a contribution to water, as described by the Tenant in her evidence. I find that the Landlord deliberately altered the records, changing the description of the charge from “water” to “gas” in an effort to bolster its case.
27. I find that the rental agreement between the Landlord and the Tenant was that the Tenant would pay the rent and hydro, and the Landlord would pay the gas, water and hot water tank rental. This agreement is, in fact, the one that was carried out by both parties from October 1, 2009 until June 2012, when the Landlord sought to unilaterally change the terms of the agreement to require the Tenant to pay for gas and hot water tank rental.
28. The Landlord’s only evidence in support of its assertion that the Tenant is responsible for the payment of gas and hot water heater rental is the lease agreement dated September 30, 2009. I find that this agreement, if it is in fact the same as the agreement signed by the Tenant, does not reflect the actual agreement between the parties, as demonstrated by their conduct for almost 3 years.
29. I find that, in March 2010, the Landlord illegally increased the rent by adding a $10.00 per month charge for water when that utility was agreed to be the responsibility of the Landlord. Even though the Tenant “agreed” to the subsequently imposed charge, such “agreement” is unenforceable.
30. I find that the Landlord substantially interfered with the reasonable enjoyment of the rental unit or residential complex by the Tenant or by a member of her household and withheld a reasonable supply of a vital service, care service, or food that the Landlord was obligated to supply under the tenancy agreement.
31. The Tenant is entitled to an abatement of rent of 50% for each of the 4 months that she has been without gas and hot water in the rental unit."
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