Tenant Dry Cleaner Wins At Court: Landlords Must Give Tenants Reasonable Period Of Time To Comply With Regulatory Requirements In Their Leases

In Jay-Pee Drycleaners Inc v 2321324 Ontario Inc1 the Ontario Court of Appeal confirmed that when commercial landlords require tenant dry cleaners to comply with training requirements in the Ontario Dry Cleaners regulation as a condition of their lease, landlords must:

Give tenants a reasonable period of time to achieve compliance, and Properly notify tenants when terminating leases on grounds of non-compliance. This decision serves to remind tenant dry cleaners to know their rights and obligations under their commercial lease. The consequences of not complying with dry cleaning regulations may include eviction, where provided for in a lease.

Dry Cleaner Training Requirement

The Dry Cleaners regulation under the Environmental Protection Act,2 states that "[n]o person shall operate dry cleaning equipment3 at a commercial establishment unless a trained person works full time at the establishment."4 A "trained person" is someone who has, within the preceding five years:

Successfully completed a course approved by the Director of the Ministry of the Environment and Climate Change ("MOECC"), such as the Ontario Dry Cleaners Training Course Otherwise satisfied the Director that he or she is qualified to manage contaminants and wastes in connection with the operation of dry cleaning equipment, or Satisfied the Director that he or she holds a valid authorizing certificate that is in good standing issued by an out-of-province regulatory authority.5 The Dry Cleaners regulation defines dry cleaning equipment as "any device used to clean material with dry cleaning solvent or to remove residual dry cleaning solvent from previously cleaned material."6 Dry cleaning solvent is defined to include perchloroethylene, methyl chloroform, and petroleum solvents.

The Dry Cleaners regulation does not apply to wet cleaners or to dry cleaners who use alternative solvents that do not contain perchloroethylene, methyl chloroform, or petroleum.

Background

Byeongheon Lee leased a commercial space in which he operated a dry cleaning business.7 Mr. Lee's lease required him to "comply with all applicable statutes and regulations affecting the premises".8 This included the Dry Cleaners regulation.

On April 5, 2012, Mr. Lee's lease was assigned to a new landlord, 2321324 Ontario Inc.9 On April 20, 2012, the new landlord instructed Mr. Lee to "successfully complete a course approved by the Director in the Management of Contaminants and Wastes in connection with the operation...