Licensing Requirements for Care Homes in Ontario

Introduction

One of the most common sources of confusion for people new to the Residential Care Home sector is the regulatory framework. Ontario has several different types of care homes — each governed by different legislation, overseen by different ministries, and subject to different licensing requirements. Getting this wrong has real consequences: for buyers, it can mean inheriting undisclosed compliance issues; for sellers, it can mean delays or complications that affect a sale; for operators, it can mean penalties, orders, or licence revocation.

This article provides a practical overview of the licensing landscape for each major care home type in Ontario.

Community Homes for Opportunity (CHO)

CHO homes operate under the authority of the Ministry of Children, Community and Social Services (MCCSS). The program was modernised in 2020 from the earlier Homes for Special Care framework. Licensing is not issued directly to the homeowner as a standalone document — rather, homeowners enter into a service agreement with the designated CHO service provider for their region (typically a branch of the Canadian Mental Health Association).

Key compliance requirements for CHO operators include:

• Vulnerable Sector Police Check (CPIC) for the owner and all staff
• Basic First Aid and CPR/AED certification for all staff on site
• Compliance with Fire Department and Public Health regulations
• Adherence to the service agreement terms set by the CHO service provider
• Maintenance of a furnished home meeting habitability and safety standards

When a CHO home is sold, the service agreement must be transferred. The incoming owner must be vetted and approved by the service provider. This process should be initiated early in the transaction — it is not automatic and can take time.

Housing with Support (HWS)

HWS homes are administered locally by municipalities, counties, and cities under the Community Homelessness Prevention Initiative (CHPI), funded through the Ministry of Municipal Affairs and Housing. Requirements vary by municipality, but the baseline operator qualifications are consistent:

• Vulnerable Sector Police Check for the owner and all staff
• Basic First Aid and CPR certification
• Compliance with local municipal standards and the terms of the municipal agreement

HWS homes are notably exempt from the Residential Tenancies Act (2006) and the Retirement Homes Act (2007). When an HWS home changes hands, the municipal agreement must be transferred to the new operator — again, a process that requires advance planning and municipal approval.

Retirement Homes

Retirement homes are regulated under the Retirement Homes Act, RSO 2007, and are licensed and overseen by the Retirement Homes Regulatory Authority (RHRA). A retirement home requires RHRA licensing if it houses five or more seniors aged 65+ who receive two or more care services as defined under the Act.

Licensing requirements for retirement homes are more extensive than for CHO and HWS homes:

• RHRA licence application — including background checks, financial disclosure, and an inspection of the premises
• Director of Care — each home must have a designated Director of Care responsible for overseeing care services
• Annual reporting and compliance inspections by the RHRA
• Resident rights obligations under the Act — including care plans, complaint processes, and transfer rights
• Compliance with the Residential Tenancies Act for rent increases

When a retirement home is sold, the RHRA licence does not transfer automatically. The incoming owner must apply for a new licence and be approved before operating. This process can take several months and must be factored into the transaction timeline.

Long Term Care Homes

Long Term Care homes are the most heavily regulated category in Ontario. They operate under the Long-Term Care Homes Act, 2007, and are overseen by the Ministry of Long-Term Care. Bed licences are issued by the Ministry and are strictly controlled — the total number of licensed LTC beds in Ontario is capped, and new licences are rare.

Key characteristics of the LTC regulatory framework:

• Licences are issued per bed, not per facility — they are highly controlled and valuable
• Annual compliance inspections by the Ministry
• Strict staffing and care standards including registered nursing requirements
• Ministry-set resident rates — homes cannot charge above the regulated rate
• Significant capital requirements to meet Ministry standards for facility design

LTC transactions are highly complex and are typically handled by specialised legal and financial teams. They are not Lino's primary area of practice — this overview is provided for informational context.

What This Means When Buying or Selling

Licence and agreement transfers are one of the most time-sensitive and process-dependent aspects of any care home transaction. They must be initiated early, managed carefully, and completed before a new owner can legally operate. Failing to plan for them adequately is one of the most common sources of delay — and sometimes deal failure — in care home transactions.

Every transaction I handle includes a clear plan for the licence or agreement transfer process, with timelines aligned to the overall closing schedule. If you have questions about the licensing requirements for a specific type of home you are considering, I am happy to walk through them with you directly.