Investors Alert! Be aware of new legislation that protects tenants against large rent increases

Provincial legislation protecting renters against large rent increases at the end of a fixed-term lease is now in effect. Learn why this legislation came about and what it means for landlords.

Legislation closes fixed-term rental loophole

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Legislation to protect renters against large rent increases at the end of a fixed-term lease is now law.

 

BC Municipal Affairs and Housing Minister Selina Robinson, introduced Bill 16 the Tenancy Statutes Amendment Act in October to amend the Residential Tenancy Regulation (s.13.1).

 

The goal is to prevent landlords from circumventing rent controls by having tenants sign a fixed term lease with a vacate clause, for example a one-year lease with specified start and end dates.

 

At the end of the term some landlords required tenants to sign a new lease at a higher rent than allowed on a month-to-month basis, which allows those landlords to raise annual rents at a rate of two per cent plus inflation.

Maximum rent increase

Now the maximum rental increase for all tenancies is two per cent plus inflation and applies retroactively to existing tenancy agreements.

Vacate clauses

The rental housing industry agrees with the legislation, noting there are exceptions, according to David Hutniak, CEO of Landlord BC, an association representing BC landlords.

 

“Tenancies that are currently in place and have a vacate clause will revert to month-to-month at the end of the fixed term, unless at the time of signing the agreement the landlord had intended in good faith to use the rental unit for the purpose set out in the regulations,” said Hutniak.

 

If a landlord intends on moving into the rental unit or having a close family member move into the rental unit at the end of the fixed term, they must inform their tenant that they must vacate at the end of the fixed term.

 

Hutniak advises landlords to sign a Mutual Agreement to End Tenancy form with the tenant at that time. If the tenant doesn’t vacate or informs the landlord that they intend to not vacate, the landlord then applies for an order of possession through the Residential Tenancy Branch’s Dispute Resolution process.