Leasing to a Private Career College in Ontario: Registration, Premises and the Lease

A letter of intent from an “Institute” raises two separate questions: is a school allowed in your unit, and is this school allowed to teach. The Province and the City each answer one of them.

I’m Arthur Zhao of AZ Real Estate Partners. Picture a letter of intent landing on a plaza owner’s desk. The prospective tenant is “Northline Health Careers Institute” (a made-up name), it wants a ground-floor unit, and the owner’s first thought is not about rent. It is: is a “college” even allowed here? The unit has housed a dry cleaner and an insurance office. A school sounds like a different animal.

That worry is the right place to start, and it has an answer in the zoning by-law. But it is only half the picture. Whether this particular operator is allowed to teach what it plans to teach is a provincial question with its own rules on registration, premises, moves and ownership changes. Below I take them in that order: the City first, then the Province, then what each fact means when you sit down with the lease. This is general information, not legal advice; the lease itself belongs with a commercial leasing lawyer.

First question: does the zoning allow a school in this unit?

In Toronto the answer starts in the definitions chapter of Zoning By-law 569-2013 (Chapter 800), and two definitions sit side by side:

• Education Use “means the use of premises for education or training, other than: (A) a post-secondary school; (B) a school regulated under the Education Act…; or (C) a religious education use.”
• Post-Secondary School “means premises used for educational purposes by a degree granting college or university under Province of Ontario legislation.”

Read together, a training school that does not grant degrees is not a Post-Secondary School under the by-law, whatever its name says. On the text, it falls into the broader Education Use bucket. The City’s zoning review makes the call for an actual file, but that is the reading the two definitions support.

Then check the zone. In the Commercial Residential (CR) zone, regulation 40.10.20.10(1)(A) lists Education Use among the uses permitted under the “c” portion of the zone label, alongside Office, Personal Service Shop and Post-Secondary School. Other zones have their own use tables, and individual lots can carry site-specific exceptions, so the first practical step is to look up your lot’s zone label and read its permitted-use list rather than assume.

One more detail from the same by-law: the parking table (Table 200.5.10.1) places Education Use in Tier 2, the same tier as Office (excluding medical office), while Retail Store and Personal Service Shop sit in Tier 4. A unit moving from retail to a school is moving between rows of that table. Whether that matters for your site is a question for the City, not a rule of thumb. Interior work for a new use may also need a building permit; ask the City’s Building division.

Outside Toronto, every municipality writes its own by-law with its own vocabulary, so the term to look for may not be “Education Use” at all.

What the Province calls a career college, and who has to register

The statute is the Ontario Career Colleges Act, 2005. Its legal term is now “career college”; the older phrase “private career college” is still in everyday use, and the Act itself names both terms in s.11(4).

Under s.1(1), a career college is “an educational institution or other institution, agency or entity that provides one or more vocational programs to students for a fee and pursuant to individual contracts with the students.” Public colleges of applied arts and technology, universities, schools under the Education Act and entities prescribed by regulation are carved out. A vocational program is “instruction in the skills and knowledge required in order to obtain employment in a prescribed vocation,” and O. Reg. 415/06 s.7(1) prescribes the occupations in the National Occupational Classification, 2016, minus a short list of exclusions in s.7(2).

Two prohibitions follow. Section 7(1): “No person shall operate a career college unless the person is registered.” Section 8(1): no person shall offer or provide a vocational program for a fee unless registered and the Superintendent has approved that program. So there are two layers: the operator is registered, and each program is approved. On registration the Superintendent issues a certificate of registration (s.14(4)) and can attach conditions the registrant must follow (s.15).

The name on the letter of intent proves little either way. Using “college” or “institute” in a corporate or business name is a separate approval under corporate and business-names law; the regulation asks applicants for evidence of that approval (O. Reg. 415/06, s.3(1) ¶8), which tells you the name and the registration are two different things. Meanwhile s.11(4) bars anyone who is not registered from using the term “career college” in advertising.

The five exemptions in full

Some training businesses legitimately operate outside the Act. According to O. Reg. 415/06, s.9(1), the following classes of programs are not vocational programs for the purposes of the Act and the regulation:

1. Programs that provide instruction for work in a religious vocation, whether or not the program is provided by a religious organization.
2. Programs that are less than 40 hours in duration.
3. Programs for which a fee of less than $2,000 is charged.
4. Programs that are offered exclusively to persons under the age of 18 years.
5. Programs to which another Act of the Legislature or an Act of Canada applies, if that Act contains protections similar to those in the Ontario Career Colleges Act, 2005 relating to program quality and to student interests.

Two qualifiers sit right after the list. Section 9(2): the 40-hour exemption does not apply to a class of programs for which the Superintendent has issued a directive under s.53 of the Act requiring those programs to be longer than 40 hours. Section 9(3): the exemptions apply even if a program would otherwise meet the definition of a vocational program.

For a landlord, the list means two things. A tenant that calls itself a college is not automatically regulated, and a tenant that says it does not need to register is making a claim that rests on a specific paragraph of s.9(1). Ask which one.

Two kinds of training tenant, side by side

What the rules say about the premises

The regulation touches the physical space in a few specific places.

Fire inspection report. An application for registration must include “a copy of any fire inspection report on the buildings used by the career college for purposes of providing instruction” (O. Reg. 415/06, s.3(1) ¶14). The landlord’s building is the building in question, so expect this to come up in the application stage, and decide in the lease who orders an inspection and who pays to fix any deficiencies.

Equipment and facilities. Each application for program approval must list “the equipment and facilities to be used in providing the program” (s.10(1) ¶4). That list is a useful window into what the tenant plans to install.

Insurance. Compliance with s.5(2) is a condition of registration (s.5(1)). The college must be insured sufficiently to compensate it for damage to its buildings or equipment and to protect it, and its officers, employees, agents and volunteers, against claims for accidents or personal injuries suffered by students while attending, including required off-campus attendance. The regulation is written around the college’s protection; the landlord’s own insurance requirements come from the lease.

The certificate on the wall. Section 38 of the regulation requires the certificate of registration to be displayed at the entrance or somewhere on the premises where students and the public can readily see it.

Inspection powers. Under s.38(3) of the Act, the Superintendent or a designate may, without a warrant, enter and inspect any premises used in connection with the registrant’s business and photograph them, among other powers. Two limits: no entry to any part used as a dwelling without a warrant or the occupant’s consent (s.38(4)), and warrantless entry only during the premises’ regular business hours, or daylight hours if there are none (s.38(5)). A landlord’s access and cooperation clauses should be written with that in mind.

When something changes: owner, address, student contracts

Ownership. Section 16 of the Act: “A registration is not transferable to another person.” Separately, O. Reg. 415/06 s.47(1) requires notice to the Superintendent of any change in ownership, whether by transfer of all or substantially all of the college’s assets, by a transfer of shares sufficient to let the buyer change the board of directors, or by a change in partners. Under s.47(2) that notice goes in at least 30 days before the change occurs, with the documents that will effect it. The Act adds shorter deadlines for other changes: new officers or directors within five days after the event (s.34(1)), and a change of address for service or legal or operating name at least 10 days before (s.34(2)).

Address. Under s.48(2) of the regulation, a college “shall give the Superintendent 30 days written notice of a proposed change in the address of its head office or a campus.” The provision is a notice requirement; the text does not say a move needs the Superintendent’s prior approval. A “campus” is any location where the college offers a vocational program (s.1).

Students’ contracts. Every student contract for a vocational program must state the location where instruction will be provided, including any practicum (s.20(1) ¶15), along with start and expected completion dates (¶3). Your unit’s address is therefore written into each enrolled student’s contract. And a college that plans to discontinue a program that has started, with students enrolled, must notify the Superintendent at least 14 days before and confirm its completion or refund arrangements (Reg s.48(3)). None of this binds the landlord, but it explains why a career college tenant’s move-out is not just a moving-truck question for the tenant.

Offences, suspensions and what gets published

Contravening the Act or regulation is an offence (s.48(1)). On conviction, an individual faces a fine of up to $50,000, up to one year in prison, or both; a corporation faces a fine of up to $250,000 (s.48(2)). Directors and officers who knowingly concur in a corporate offence face up to $25,000, up to one year, or both (s.48(3)).

On the registration side, the Superintendent may refuse to renew, suspend or revoke a registration on grounds listed in s.18(2), including breach of a condition or failure to comply with the Act. Under s.20 a registration can be suspended immediately, effective on written notice, to protect students or prevent a contravention; a hearing request does not stay it (s.20(4)).

According to s.49(1), the Superintendent shall publish particulars of every refusal to renew, suspension and revocation (once the hearing period has run or the Tribunal has ruled) and of every notice of contravention (once the review period has run or the Minister has decided). Section 49(7) also lets the Superintendent post a copy of published material in a conspicuous place at the college’s premises, and s.49(8) says no one may remove it without the Superintendent’s written direction or approval.

What to check in the lease, clause by clause

Take these to your commercial leasing lawyer as questions, not as finished wording.