Landlords in Ontario are about to face one of the most significant regulatory shifts in recent memory. With the Royal Assent[1] of Bill 10, Protect Ontario Through Safer Streets and Stronger Community Act, 2025 (the “Bill”), on June 5, 2025, the province has signaled its intent to crack down on illegal drug activity by placing new enforcement responsibilities on property owners. 

Schedule 8 of the Bill, the Measures Respecting Premises with Illegal Drug Activity Act, 2025 (the “Act”), introduces unprecedented obligations for landlords to take active steps to prevent illegal drug-related activity from occurring on their property. 

However, the Act offers little clarity on what landlords are actually required to do. How can landlords avoid liability when tenants act independently? What constitutes a “reasonable measure” of prevention? This article breaks down what we know so far and how landlords can start preparing now to nip compliance issues in the bud.

Legal consequences for non-compliance: What landlords need to know

As we await the Act coming into effect, landlords should act now to understand the possible consequences of non-compliance. The potential financial and legal penalties are steep and wide-reaching:

  • Fines: Up to $1,000,000 for corporate landlords (first offence), and up to $250,000 for individuals (first offence). Daily fines may apply for subsequent violations.
  • Imprisonment: Offenders may face up to two years in jail.
  • Personal liability for directors and officers: Corporate landlords are not shielded – individual decision-makers can be held personally accountable.
  • Immediate closure of commercial premises: If a tenant is charged with a prescribed offence, and police have reasonable grounds to believe the property was used in the alleged crime, officers may order:
    • immediate closure of the premises; and
    • removal of any occupants.

    These consequences underscore the importance of early preparation, internal policy updates, and legal consultation before the Act takes effect.[2]

    Navigating compliance without a map: What does “reasonable” really mean?

    How, then, may a landlord ensure it avoids the application of such steep consequences?  Under the Act, even where a prescribed offence is committed on a landowner’s property, a landlord may avoid potential fines and penalties by demonstrating that they took “reasonable measures” to prevent the commission of the offence.[3]  

    Unfortunately, the term “reasonable measures” is not defined in the Act, and accompanying regulations clarifying this definition have not yet been released. This leaves landlords with more questions than answers:

    • Is it enough to include lease provisions prohibiting prescribed offences?
    • Does a landlord have a positive obligation to inspect a tenanted property regularly to ensure compliance with such provisions?
    • Is it sufficient for a landlord to outsource these responsibilities to a competent property management firm, or is closer oversight required?
    • Is reporting suspected activity to law enforcement a necessary step, or is simply terminating a tenancy in such circumstances sufficient?

    While not definitive, some insight into the concept of “reasonable measures” can be gleaned from case law interpreting the same term in the context of analogous legislative regimes.  For example, in Toronto (City) v. 2694605 Ontario Inc., 2024 ONCJ 725, the Ontario Court of Justice (the “Court”) clarified the meaning of “reasonable measures” under section 13(2) of the Cannabis Control Act, 2017:

    • In that case, a landlord was charged with permitting a tenant to sell cannabis illegally on its property.
    • On appeal, the Court confirmed that “reasonable measures” does not require a landlord to exhaust all possible preventative steps. Instead, “reasonable measures” obliges a landlord to take meaningful and proportionate action once aware of potential illegal activity.
    • The Court upheld the finding that the landlord had taken reasonable steps after becoming aware of the illegal cannabis activity on the property. Such measures included confirming the nature of the activity, seeking legal advice, issuing eviction notices, and changing the locks multiple times. The Court accepted that the landlord was not a willing nor passive participant in the illegal activity and rejected the argument that more aggressive legal action, such as a court application, was required.

    Compliance starts now: Key steps landlords should take

    So, what should landlords be doing now to best protect themselves against exposure to the severe consequences of non-compliance under the Act?

    1. Prioritize careful tenant screening. Now more than ever, landlords should prioritize careful screening of potential tenants.  Once a residential lease is signed, tenants benefit from significant protections under the Residential Tenancies Act, 2006 (the “RTA”), and a landlord’s ability to alter lease terms or initiate eviction proceedings is extremely limited. A robust application process is therefore vital.
    2. Adopt strong vetting practices. Enacting practices such as conducting income and credit checks, reviewing rental history, and making reasonable lifestyle inquiries (without violating the RTA or the Code, defined below) may help landlords minimize the risk of prescribed offences occurring at a tenanted property.
    3. Draft leases with clear expectations. In terms of lease drafting, it is important for a landlord to set clear expectations in respect of what activities will not be permitted on site (i.e., prescribed offences) and the consequences for failure to comply with the same (e.g., termination and eviction rights, etc.).  It is also important that a lease provide a landlord with broad unilateral inspection rights so that the landlord (either directly or through a property manager) can monitor activities at the tenanted property. While this is a straightforward drafting exercise for commercial tenancies, residential landlords have less freedom to tailor leases under the RTA and must instead rely on the inspection and access rights it provides (for example, by providing for regularly scheduled housekeeping appointments, allowing the landlord to enter and view the premises).

    Between risk and rights: Landlord duties under the Human Rights Code

    Before adopting any of the above strategies, landlords must remain mindful of their obligations under Ontario’s Human Rights Code (the “Code”), which takes precedence over both the RTA and the Act. The Code prohibits discrimination in housing based on protected grounds, including disability. It is important to recognize that substance abuse and addiction may qualify as a disability under the Code. Landlords must ensure that tenancies are not denied solely on the basis of a protected human right.  In other words, a mere suspicision that an individual may be an illegal drug user does not, in and of itself, justify refusing to rent to them.

    Landlords must also to be aware of the risk of overstepping in pursuit of “reasonable measures,” and opening themselves up to potential legal claims from tenants – for example, allegations of violating the RTA, the Code, the lease, or otherwise. A tenant may allege that the landlord interfered with their right to quiet enjoyment of the premises, or that the landlord’s conduct was influenced by bias or stereotypes related to a protected human right under the Code.

    Another scenario might involve a well-meaning landlord reporting a suspected offence to law enforcement, resulting in claims of mental distress being suffered by the tenant.  As such, landlords must tread carefully to ensure that efforts to comply with the Act do not inadvertently infringe on tenants’ legal rights or conflict with competing obligations under other legislation.

    Conclusion

    The introduction of the Act marks a significant development in Ontario’s regulatory landscape, imposing unprecedented obligations on landlords to monitor and prevent drug-related activity on their properties. With the risk of substantial fines, liability for corporations and their directors and officers, and potential criminal penalties, landlords must take proactive steps to assess and manage their exposure.

    Now is the time for landlords to act. Landlords are encouraged to start preparing by evaluating their potential exposure and undertaking protective measures, such as reviewing standard lease agreements and tenant screening protocols with legal counsel, and educating their board, employees, and property managers on this evolving regime. Our Real Estate Group can assist you in ensuring you are adequately prepared to meet you new obligations under the Act.

    The authors would like to thank Ronnie McQuade for his contributions on this article.

    [1] https://www.ola.org/en/legislative-business/bills/parliament-44/session-1/bill-10#BK10

    [2] https://www.ola.org/en/legislative-business/bills/parliament-44/session-1/bill-10#BK10 schedule 8 at section 7(1)

    [3] https://www.ola.org/en/legislative-business/bills/parliament-44/session-1/bill-10#BK10 schedule 8, section 2(2)