B.C. gov seeks to close tenancy loophole 

Restricting 'vacate clause' could benefit renters province-wide, though questions remain

click to enlarge PHOTO COURTESY  OF B.C. GOV - NEW RULES Minister of Municipal Affairs and Housing Selina Robinson speaks at the Union of BC Municipalities Convention in September. The minister announced changes to B.C.'s tenancy act on Oct. 26.
  • PHOTO courtesy of B.C. Gov
  • NEW RULES Minister of Municipal Affairs and Housing Selina Robinson speaks at the Union of BC Municipalities Convention in September. The minister announced changes to B.C.'s tenancy act on Oct. 26.

With new legislation announced Oct. 26, the provincial government will move to close a major loophole in fixed-term leases that has been a thorn in the side of B.C. renters for years.

If passed, the amendments will restrict a landlord's ability to use a "vacate clause" in fixed-term tenancy agreements to certain circumstances only, and limit rent increases between fixed-term tenancy agreements with the same tenant to the maximum annual allowable increase (currently set at two per cent).

"We are protecting the rights of renters who, for too long, have been left open to unfair and unjustified rent increases," said Municipal Affairs and Housing Minister Selina Robinson in a release.

"By closing this loophole, renters will know they'll be able to stay in their homes without the threat of skyrocketing rents."

For some renters in Whistler, the move is welcomed.

Local musician Jon Shrier recently had his rent increased 30 per cent with less than 60 days notice. Even with five jobs, the sudden increase makes things tough for him.

"(Whistler) is an awesome town filled with awesome people who work hard," Shrier said. "They shouldn't have to prostitute themselves in order to pay rent."

However, Shrier added, one consequence may be landlords selling up.

"While this (legislation) favours renters, it will possibly cause a lot of owners to sell, which might be good — if all they want is money," he said.

But even with the added financial hardships, Shrier's staying positive.

"I'm grateful I have my friends and my family and my health. If you focus on this housing thing, you probably just want to move away," he said.

Having been both a long-term tenant and a landlord in Whistler over the last 20-plus years, Jill Almond said she sees the fixed-term lease as being an important tool for both sides.

"A fixed-term tenancy protects the tenant when the house is sold. Even if the new owner wants it for their own use, they are obligated to honour the existing lease or make an agreement with the seller and his tenant for the tenant to vacate (usually involves compensation to the tenant)," Almond wrote in an email.

"A fixed-term lease forces the tenant and landlord to have a discussion in advance of the end of tenancy to decide whether or not to renew. Neither side is obligated to the renewal but it is much easier for a landlord to renew to a quiet, compatible tenant than risk a new tenant, even if it is for more money. Without the fixed-term tenancy, many landlords may reconsider renting premises that are in their own homes."

Almond said she understands the intent behind changing the legislation — stopping landlords from circumventing the allowable rent increase — but that goal could be achieved by tying the rent to the unit instead of the tenant.

"The Landlord and Tenant Act is already strongly weighted in favour of the tenant; it is very difficult and time consuming to evict a bad tenant," she wrote.

"The fixed-term lease is particularly important for landlords renting a suite in their own house. If the tenant's lifestyle ends up being incompatible with that of the homeowner, they can choose not to renew the lease and the tenant must leave at the end of the fixed term. If the tenant is compatible, the landlord can offer a new lease for an agreed-upon term at a price up to the amount allowed by the annual increase. Both owner and tenant have a clear understanding of how long the rental commitment is for. Without a fixed term, the tenant can stay indefinitely."

The Whistler Housing Authority has never used the vacate clause, a spokesperson said — when a new tenant signs a lease it converts to month-to-month after the initial one-year term — but the new legislation will likely prove beneficial to Whistler renters.

"This has been in the pipeline for quite awhile, but really, the biggest benefit is for the tenant, clearly," said Gord Low, of Mountain Country Property Management in Whistler.

"They're going to have more marginalized rent increases so that they'll know what to expect moving forward versus what's happening now."

The issue with the legislation as it currently stands is that landlords are using fixed-term vacate clauses as a means of raising rents at will.

"The landlord has the ability to change the rate to really whatever they want — they don't have to follow the incremental rate — and so that's been happening quite a lot in Whistler over the last few years," Low said, adding that it's been going on locally and elsewhere in the province for at least the last decade.

"I think it's very positive that it's finally happening. It's going to be good for the community, good for the tenants, so it's a positive change to the tenancy act."

One potential downside of the move is that it could reduce the returns for property owners, Low said.

"So they may consider selling the property," he said. "We don't know this yet, it's an unknown, but it could reduce the supply of properties."

LandlordBC has publicly expressed concern about how some landlords were using the clause for some time now, said David Hutniak, CEO of LandlordBC, in the release.

"We are in the business of providing secure, long-term rental housing," Hutniak said.

"The fact that a cohort of our industry has utilized this form of tenancy to unnecessarily force good tenants from their homes, or have them face rent increases significantly above the allowable maximum in order to remain, is the reason we support this move."

The new rules will apply to both new and existing tenancy agreements.

The proposed amendments will also streamline the dispute resolution process for the return of security deposits. If a landlord doesn't return a deposit, a tenant will be able to apply for a monetary order through an expedited process. Tenants will get their deposits back in three weeks, rather than the up-to-six-months it currently takes.

The government also announced a new online form for landlords and tenants to file for dispute resolution earlier this month.

The redesigned form will guide applicants through the process to ensure they're providing the right information, cutting down on unnecessary adjournments or dismissals.

The new application can be found at www.gov.bc.ca/landlordtenant/online.

The Whistler Community Services Society, Resort Municipality of Whistler and WHA are hosting a "Renters Rights" session at the Whistler Public Library on Wednesday, Nov. 9 from 2 to 4 p.m.

Head to www.whistler.ca/events/renters-rights-information-session for more info.


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