The Mystery of the Parking Spot
In North American society, the car is an almost indispensable part of everyday life. Unless one lives in a downtown core, a parking spot is often a basic necessity that comes hand in hand with housing.
In most cases, a lease will clearly specify how many parking spots come with a rental unit. But when a contract is silent on the matter, and a dispute arises between the parties over the right to use a parking spot, how will the court rule?
In Lafergola v. French, 2025 ONSC 1619 (CanLII), an Ontario landlord and tenant became embroiled in a dispute over the right to use a parking spot, and the case ultimately made its way on appeal to the Divisional Court. The core issue in the case was: does a tenant's long-term use of a specific parking spot give rise to an "implied term" of the lease, and does the landlord have the right to unilaterally change that arrangement and start charging for it?
In this case, the tenant had moved into a unit in the building since August 2012, and signed a lease. Notably, the lease's provisions regarding the parking arrangement were unclear: the section in the first paragraph of the lease meant to indicate the type of parking had been crossed out, and the fourth paragraph did not list any parking fee. However, clause 14(b) of the lease stated that private vehicles were to be parked in a spot assigned by the landlord from time to time, unless otherwise authorized in writing.
Although the lease did not clearly specify a parking spot, the tenant was assigned to use Spot 69 from the very start of the tenancy — a covered parking spot. For approximately nine years thereafter, the tenant continued to use that spot, and was never asked to pay any fee for it. It was not until 2021 that the landlord asked the tenant to switch to an uncovered spot, or to pay $40 per month to continue using Spot 69. The tenant refused both options, and the landlord subsequently issued a notice of termination and applied to the Landlord and Tenant Board for an eviction order.
On September 28, 2023, the Landlord and Tenant Board ruled that the tenant's exclusive use of Spot 69 had become an implied term of the lease, which the landlord could not unilaterally change. The landlord subsequently applied for a review of that decision, but the review was dismissed on November 2 of that same year.
The landlord then appealed the case to the Divisional Court. The main issue before the court was a question of law — namely, whether the Landlord and Tenant Board had erred in law. Under the Residential Tenancies Act, 2006, appeals are limited to questions of law, and the applicable standard of review is "correctness."
In its analysis, the court emphasized that the Residential Tenancies Act is remedial legislation, intended to correct the power imbalance between landlords and tenants. As such, it takes precedence over general principles of contract law, and permits a lease to include written, oral, and implied terms. Section 2 of the Residential Tenancies Act expressly states that a "tenancy agreement" may include an implied agreement, and that "services and facilities" include parking. In addition, section 202 requires the Landlord and Tenant Board, in adjudicating a case, to focus on substance rather than form, and permits it to take past patterns of conduct into account.
The court found that the Landlord and Tenant Board had, in its decision, fully considered all relevant factors — including the terms of the lease, the fact of the tenant's long-term use of the parking spot, and the landlord's motive in seeking to reassign the spot in order to generate additional revenue. Although clause 14(b) of the lease gave the landlord the power to assign parking spots, this did not preclude the existence of a specific arrangement that had already formed between the parties, particularly one that had continued unchallenged for many years.
The court also noted that the Landlord and Tenant Board's interpretation of clause 14(b) did not render it meaningless. The landlord could still reassign parking spots under reasonable circumstances — for example, temporarily relocating a tenant's vehicle during repair work. However, this did not mean the landlord could unilaterally alter an existing arrangement purely for financial gain, particularly where that arrangement had already become part of the lease.
Furthermore, section 123 of the Residential Tenancies Act provides that, if a landlord and tenant agree to add a new parking service, the landlord may increase the rent accordingly. In this case, however, there was no new service being added — rather, the landlord was attempting to charge for an existing arrangement — so this provision did not apply. Both the Landlord and Tenant Board and the court found that the landlord's action effectively amounted to a disguised rent increase, in violation of the legislation.
In summary, the court found that the Landlord and Tenant Board had not erred in law, and that its decision was reasonable and consistent with the spirit of the legislation. The landlord had attempted to interpret the lease according to general commercial contract principles, but this approach overlooked the paramountcy of the Residential Tenancies Act and its protections for tenants. Ultimately, the court dismissed the appeal and upheld the original decision.
This case demonstrates that, even where a lease's terms are unclear, a long-standing pattern of actual use can still give rise to a legally binding implied term. For landlords who wish to retain the right to make changes, this should be clearly set out in the lease. For tenants, they may assert their rights based on actual patterns of use — particularly where that use has continued for many years without interference.