Policy, Legislation & Advocacy
Ontario's Bill 10 and Commercial Landlord Liability for Illegal Drug Activity
Bill 10 lets Ontario hold a landlord responsible for illegal drug activity on their premises unless reasonable steps were taken to prevent it. As currently in force, the regime applies to commercial landlords only — here's what that means for owners and investors.
Ontario’s Bill 10 created a new legal framework that can hold a property owner responsible for illegal drug activity happening on their premises unless they’ve taken reasonable steps to prevent it. As currently in force, this regime applies only to commercial landlords — residential landlords are explicitly excluded, though that scope could be expanded later without much notice.
What Is Bill 10 and What Does It Do?
Bill 10 — Ontario’s short-form name for a broader public-safety statute that, among other things, created a new law aimed at premises where illegal drug activity is taking place — establishes potential liability for the landlord of that premises if reasonable steps weren’t taken to prevent it.
The underlying concern the legislation targets is real: drug dealing, manufacturing, and trafficking taking place inside a rented space, with the landlord potentially exposed to consequences even if they weren’t personally involved. What makes the regime unusual is that it runs the liability through the landlord rather than (or in addition to) the individuals actually engaged in the criminal activity, on the theory that landlords are positioned to prevent or interrupt it. Whether that theory holds up in practice is a live debate among landlord advocacy groups — but the legal mechanism itself is what a landlord needs to understand and plan around.
Who Does Bill 10 Currently Apply To?
As currently in force, Bill 10’s illegal-drug-activity regime applies to commercial landlords. Residential landlords — along with supportive housing providers, retirement and long-term-care homes, and shelters — are explicitly excluded from the regime.
That exclusion matters because a lot of the public conversation around Bill 10, including landlord-advocacy commentary, was framed around residential rental housing and treated the exposure as an imminent problem for every landlord in Ontario. That framing reflects legitimate concern about where the regime could go, not where it currently stands. The legislation itself carves out residential landlords and the other excluded categories by name, and it reserves the ability to bring additional landlord classes into scope through a future order — meaning the current commercial-only scope is a snapshot, not a permanent guarantee. Any landlord, commercial or residential, who wants a definitive answer about current applicability should confirm it against the legislation itself or with a lawyer, rather than relying on a secondary source — this one included.
What Counts as “Reasonable Steps” for a Commercial Landlord?
The Act does not define “reasonable steps” or “reasonable measures” anywhere in its text, which leaves commercial landlords inferring a defensible standard rather than following a checklist the legislation provides.
In the absence of a statutory definition, the categories that tend to come up as sensible baseline practice include:
- Tenant due diligence before signing a lease — verifying the identity, business, and intended use of a prospective commercial tenant, not just their ability to pay rent.
- Clear lease covenants on lawful use, so a tenant’s obligation to avoid illegal activity on the premises is contractual as well as statutory.
- Periodic monitoring of the premises, consistent with the landlord’s rights under the lease and any applicable notice requirements.
- Prompt reporting of suspected criminal activity to police, rather than a landlord attempting to investigate or confront a tenant directly.
- A documented, repeatable process for all of the above, so a landlord can show an ongoing practice rather than a one-time gesture if their conduct is ever questioned.
None of these are guaranteed by the bill’s text to satisfy “reasonable steps” — they are the categories a commercial landlord’s counsel is likely to point to as prudent practice while the standard remains untested. Confirming current expectations with a commercial real estate lawyer is the safer approach than assuming any specific practice is sufficient on its own.
What Penalties Can Apply Under Bill 10?
The regime’s consequences can include fines, restriction or closure of the premises, and seizure or forfeiture, and individuals connected to the premises can face imprisonment in some circumstances.
This guide intentionally does not state specific fine amounts, dollar thresholds, or timelines, because those figures are the kind of detail that changes as the regime is implemented and potentially amended. A commercial landlord who wants the current penalty structure should look it up directly in the legislation or ask a commercial real estate lawyer — treating any number quoted secondhand, including in early media coverage of the bill, as potentially out of date.
How Should a Commercial Lease Address Illegal Drug Activity?
Because commercial tenancies in Ontario are governed by the Commercial Tenancies Act rather than the Residential Tenancies Act, a commercial landlord’s primary day-to-day tool against illegal activity on a leased premises is the lease itself, not a residential-style notice-and-board process.
A well-drafted commercial lease typically gives the landlord several contractual levers that operate independently of — but alongside — Bill 10’s statutory regime:
| Lease tool | What it does | Why it matters under Bill 10 |
|---|---|---|
| Lawful-use covenant | Requires the tenant to use the premises only for lawful purposes | Creates a contractual breach a landlord can act on directly, separate from the statutory regime |
| Default and re-entry rights | Lets the landlord treat illegal use as a default and re-enter the premises after proper notice under the lease | Gives the landlord a concrete remedy that doesn’t depend on how “reasonable steps” is eventually interpreted |
| Inspection and access rights | Sets out when and how the landlord can access the premises | Supports monitoring without relying on an undefined statutory standard |
| Assignment and subletting controls | Lets the landlord vet who actually occupies the space | Reduces the risk of an unscreened occupant introducing illegal activity |
None of these lease tools substitute for statutory compliance with Bill 10, but they give a commercial landlord a faster, contract-based way to respond to a problem tenant than waiting on how the statutory “reasonable steps” standard gets interpreted. A commercial real estate lawyer can confirm that a specific lease’s covenants, default provisions, and re-entry rights are drafted to hold up if they’re ever tested.
What Can a Commercial Landlord Do to Reduce Exposure?
The most defensible position for a commercial landlord is an ongoing, documented practice — not a single inspection or a one-time screening decision.
- Screen every prospective commercial tenant with a consistent process, and keep records of what was reviewed.
- Put lawful-use covenants and clear default/re-entry rights in every lease, drafted or reviewed by a commercial real estate lawyer.
- Monitor the premises periodically, consistent with the landlord’s rights under the lease.
- Report suspected illegal activity to police promptly, and keep a written record of when and what was reported.
- Document everything as it happens — screening decisions, lease terms, monitoring visits, and any reports — so there’s a paper trail if the landlord’s conduct is ever questioned.
- Confirm current requirements periodically with a commercial real estate lawyer, since the regime’s scope, definitions, and penalties can all be clarified or changed over time.
Could Bill 10 Be Extended to Residential Landlords?
Possibly — the legislation itself preserves the ability to bring additional landlord classes into scope by future order, and residential landlords are the class most frequently discussed as a candidate for that expansion.
Landlord advocacy organizations have raised concerns about exactly this possibility, given how the regime’s undefined “reasonable steps” standard would interact with residential-specific rules like entry-notice requirements. None of that has happened yet, and speculating about it isn’t a substitute for confirming the current, actual scope of the regime. A residential landlord who wants to stay ahead of a possible expansion should follow the legislation directly or through a lawyer, rather than treating early commentary about the bill — including commentary framed around residential landlords before the commercial-only scope was settled — as the current state of the law.
How to Stay Informed as Bill 10 Guidance Develops
Because the regime is still relatively new and its “reasonable steps” standard is undefined, what counts as compliant — and who the regime applies to — can be clarified or expanded as enforcement begins and as landlord advocacy groups press for guidance.
Commercial landlords who want to stay current should confirm requirements directly against the legislation, follow any guidance published by the relevant provincial ministries, and work with a commercial real estate lawyer rather than relying on a fixed snapshot of the rules. Landlord advocacy organizations are also a useful early-warning channel for proposed changes, including any move to extend the regime beyond commercial landlords.