Policy Tracker – RESIDENTIAL TENANCY ACT REFORM

RESIDENTIAL TENANCY ACT REFORM

This policy resolution was renewed in 2023 at the BC Chamber of Commerce AGM and Convention

Issue

Many of our members own and/or operate residential property and this policy is responding to an abundance of complaints regarding the Residential Tenancy Act (“RTA”)and its enforcement by the Residential Tenancy Branch (“RTB”)

There is a significant imbalance in favour of the tenant which is impacting the already challenging housing market in both the non-profit and for-profit sectors.  For instance, the unreasonable restrictions on a landlord’s ability to evict destructive and non-paying tenants are not only reducing the pool of available housing units, but is causing financial hardship and impacting staff morale for non-profit organizations that operate in this environment.

We propose that the Residential Tenancy Act be revised to include increased protections for landlords which will encourage landlords to maintain long-term tenants and ensure the protection and maintenance of residential property throughout BC.

The intent of this policy is to strike a greater balance between protecting the rights of a landlord and protecting those of th tenant.

Background

The Residential Tenancy Act governs all residential tenancies in British Columbia.  This piece of legislation sets out the rights and responsibilities of landlords and tenants including what constitutes a residential tenancy, what steps need to be taken at the beginning of a residential tenancy, how to act during a residential tenancy and how to end a residential tenancy.

Prior to May 17, 2018, the Residential Tenancy Act was already weighted heavily towards the tenant, often causing serious negative impact on the landlord.  For instance, even when a tenant regularly paid rent late (or did not pay rent at all) or, more seriously, vandalized or destroyed the landlord’s property, it was a very challenging and lengthy process to have the tenant evicted.  Such delay often resulted in the landlord losing significant money including lost rental income and costs associated with repairing the property.  Even if a decision was made for the tenant to vacate the property and/or pay the landlord a sum of money for damages or unpaid rent, collecting on such a debt was often unlikely.  It was also a further step to have the tenant evicted even when an Order for Possession was granted.

Since May 17, 2018, these issues remain, but the provincial government has revised the Residential Tenancy Act [1]to include further protections for tenants.

Effective December 11, 2017:

1. Fixed term tenancy agreements can no longer include a vacate clause requiring a tenant to move out at the end of the term unless:
   • The tenancy agreement is a sublease agreement; or
   • The tenancy is a fixed term tenancy in circumstances prescribed in section 13.1 of the Residential Tenancy Regulation.  This Regulation specifies situations where a landlord or landlord’s close family member plans in good faith to occupy the rental unit 
2. A rent increase for a tenant remaining in a rental unit is limited to the maximum annual allowable amount and can only be increased once every 12 months.  Rent can no longer be increased above that amount between tenancy agreements with the same tenant. 
3. Landlords are no longer able to apply for an additional rent increase on the basis that the rent is significantly lower than other similar rental units in the same geographic area.

Effective May 17, 2018:

1. Landlords must give four months’ notice to end tenancy for demolition, renovation or repair, or conversion, and tenants have 30 days to dispute the notice,
2. A landlord or purchaser if applicable must compensate a tenant 12 months’ rent (unless excused by an arbitrator in extenuating circumstances) if a landlord or purchaser ends a tenancy under section 49 (landlord use) and they don’t:
   1. take steps to accomplish the stated purpose for ending the tenancy under section 49 within a reasonable period after the effective date of the notice, or
   1. use the rental unit for that stated purpose for at least 6 months beginning within a reasonable period after the effective date of the notice.
3. A tenant has a right of first refusal to enter into a new tenancy agreement at a rent determined by the landlord if the landlord ends their tenancy to renovate or repair the rental unit. This right of first refusal applies only to a rental unit in a residential property containing 5 or more units.
4. A landlord must compensate a tenant 12 months’ rent (unless excused by an arbitrator in extenuating circumstances) if the tenant exercises a right of first refusal and the landlord does not give the tenant:
   1. a 45 day notice of availability 
   1. a tenancy agreement to sign.
5. If a landlord is ending a tenancy on behalf of a purchaser, the notice must contain the purchaser’s name and address.

Recently, the Residential Tenancy Branch (the “RTB”) established a Compliance and Enforcement Unit to conduct investigations of repeated or serious non-compliance with tenancy laws or orders of the Residential Tenancy Branch, issue warnings to ensure compliance and, if necessary, administer monetary penalties.

Unfortunately, the unit is not an alternative to the RTB’s information and dispute resolution services nor as an alternative way to enforce orders through the courts.

Complaints may be submitted for consideration of an investigation only when all attempts to resolve the matter have been made through the Residential Tenancy Branch dispute resolution service and have not resulted in compliance.

The Compliance and Enforcement Unit adds teeth to the RTB, but due to the fact that a landlord must first attempt to resolve the matter through dispute resolution, this merely increases the amount of time for the landlord to alleviate the problem.

Dispute Resolution

Where a landlord gives notice under sections 46, 47, 48, 49 and 49.1, and a tenant files a dispute notice within the allotted time, the matter goes to a hearing in front of the Residential Tenancy Branch.  Unfortunately, this process can take months all while a tenant is not paying rent or, worse, destroying property.

Even when the matter goes to a hearing, there are several decisions whereby the tenant is successful even where conditions set out in the RTA or the Residential Tenancy Agreement are breached.  This does not ensure any certainty or protections for the landlord.

Rent

For 2023, the rental increase is capped at 2%. This limitation greatly affects the general maintenance and upkeep of residential buildings, many of which are much older and in dire need of repair. A landlord cannot afford these significant capital costs if they cannot bring in the funds to support them.  This leaves residential buildings falling into disrepair, which can be devastating for the tenant as well as the landlord.

For instance, this cap is not adequate to cover even the known increase such as inflation.

The Chamber recommends

That the Provincial Government:

1. We recommend changes to the Act in order to strike the right balance between protecting the landlord and protecting the tenant, as follows:
   • Make it a requirement for the Residential Tenancy Board to end a residential tenancy and grant an Order for Possession in the following circumstances:
     • Unpaid rent for two (2) months or more;
     • Late rent for three (3) months, consecutive or not;
     • For cause, as set out in section 47 of the Act;
     • If tenant ceases to qualify for rental unit; or
     • If tenant fails to file an Application for Dispute Resolution within the allotted time in the Act after a Notice to End Tenancy is served;
   • Once an Application for Dispute Resolution is submitted, the RTB must hear the case within two (2) months;
   • Permit Orders for Possession to be enforceable through a Court Bailiff, RCMP, or other government appointed body without the need to enforce them through the Supreme Court of British Columbia; and
   • Create an exception to the rent increase cap under circumstances including, but not limited to, significant capital costs to the landlord for the maintenance and upkeep of rental units/ buildings and insurance costs;
   • Allow rent increases to either the Consumer Price Index or 4%, whichever is higher.

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[1] Residential Tenancy Act, SBC 2002 Chapter 78: Residential Tenancy Act (gov.bc.ca)