Mom! I am Suing you! Because Guess What, I am your Tenant!!

What does a landlord-tenant relationship entail? One would assume, a properly drafted lease agreement and timely payment of rent. But can your own children, living with you after a certain age, be considered as “tenants” in the eyes of the law, and for the purposes of interpreting coverage under a homeowner’s insurance policy? One may be surprised, but the answer is “yes”.

In a recent decision by the Ontario Superior Court of Justice, the landlord-tenant relationship was discussed between a mother and daughter residing with each other for ages.

In Traders General Insurance Company v. Elizabeth Gibson, 2019, the Ontario Superior Court of Justice denied the Insurer’s application, sometime during the trial, for a declaration that they are not required to defend and/ indemnify the Insured, Elizabeth Gibson, under homeowner’s policy with respect to a legal action commenced by Elizabeth’s daughter, Betty, when she fell from the porch of the house where both have resided since the 1950s.

The facts of the case are as under:


Both Elizabeth (Mother) and Betty (Daughter) had always stayed together (except for a 10 month period in 1970s) since 1951. Elizabeth owned the property and Betty had no ownership in the house. Betty, though never married, had a son who stayed in the same house in Toronto, Ontario. She paid rent of $200 per month after graduating from high school, that subsequently increased to $400 per month. She worked and paid her mother to take care of Alexander, her son. Betty and her mother shared the daily tasks and household expenses, although Elizabeth contributed more towards those expenses and assumed responsibility for utilities and property taxes.


The accident occurred on March 31, 2014 when Betty was on the porch of the property owned by Elizabeth. Betty fell from the porch when she was trying to get hold of a broom from Elizabeth. As a result, Betty sued, inter alia, her mother, Elizabeth for injuries.



Elizabeth and Betty both occupied the property and Betty was a person residing in Elizabeth’s household at the material time of this incident. Thus, the policy exclusion with respect to claims arising from “bodily injury to you or any person residing in your household” applies to the incident.


Betty was either a “residence employee” or a “tenant”, and thus the exclusion does not apply and coverage must be afforded.


The policy provided personal liability protection to Elizabeth for the house where this incident occurred, and excluded claims arising out of “Bodily injury to you or any person residing in your household other than a residence employee”.

Residence Employee was defined in the policy as:

“Residence Employee” means a person employed by you to perform duties in connection with the maintenance or use of the premises. This includes persons who perform household or domestic services or duties of a similar nature for you. This does not include contractors or sub-contractors. It also does not cover persons while performing duties in connection with your business.

The word “Tenant” was however not defined anywhere in the policy. The policy did not exclude tenants from the liability coverage either.


Is Betty to be Considered a ‘Residence Employee’?

The court rejected this argument from the respondent who asserted that “Betty was providing domestic services to Elizabeth in exchange for a low monthly rental payment given Betty’s financial and medical circumstances”.

The court stated:

There was no written contract between Elizabeth and Betty concerning work that Betty was to do. There was never a schedule propounded for doing specific work. Betty was not paid for the work she did at the house. She was not issued a T4. Elizabeth never submitted any documentation relating to Betty with respect to Employment Insurance, Canada Pension Plan benefits, or Workplace Safety and Insurance Board premiums. Betty could do as much or as little as she wished at any time, according to Elizabeth. She had discretion to perform the household tasks she wanted to. She did not report to Elizabeth as regards the work that she did, nor was she supervised by Elizabeth.

Was Betty a Tenant?

The Insurance policy did not define the word “Tenant”. Hence, the court relied on general accepted definitions, arriving at the following tests to prove Tenancy:

1) the tenant occupies the property in question, and

2) the tenant is permitted to do so by the landlord in exchange for some form of consideration. A tenancy need not be in writing or be for a fixed period of time.

The house was Betty’s primary residence and as such, the first criterion was met. Further, Betty had paid rent to her mother, and thus “Betty and Elizabeth formed a mutually beneficial agreement whereby Betty was permitted to reside, and did reside, in her mother’s home in exchange for rent”.


Thus the court, dismissing the application, stated:

As a result, I am of the view that Betty was, for the years that she lived at Elizabeth’s home, a “tenant”. Betty, as a tenant, would be covered by the Traders policy of insurance.

…………………….Traders continues to have a duty to defend and indemnify, if required, Elizabeth Gibson pursuant to the policy of insurance.


Family members residing in the same household could be considered under a landlord-tenant relationship, even though no formal lease agreement was ever signed, or for that matter, no rent receipts were ever issued. As an underwriter, it might be a good idea to get a list of all the members residing in the household and to make sure whether any such relationship(s) exist(s) and/or whether there is any potential of such relationship(s) to come into existence in future, during the policy period. Imagine the “moral hazard” associated with such scenarios and “copy cat” cases that may follow. Also, be specific in the exclusionary wordings as any ambiguity goes in favor of the insured (Contra – Proferentem). Finally, define all the relevant terms in the policy.

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