Government Proposes Changes to the Residential Tenancy Act

Government Proposes Changes to the Residential Tenancy Act


Alex J. Chang, Associate
Phone:  604-685-1255
Email:  ajc@lmlaw.ca

 

The newly elected NDP government has introduced Bill 16 to amend the Residential Tenancy Act (RTA) and related legislation. The proposed changes are mainly a response to the use of move out clauses by some landlords as a loophole to bypass rent controls.

Under the current law, a landlord and tenant may agree at the beginning of a tenancy that the tenant must move out at the end of the fixed term. If the tenancy agreement does not require the tenant to vacate the rental unit at the end of the term, the RTA deems that the parties have renewed the tenancy agreement as a month to month tenancy. This sometime surprises landlords who assume that tenants must automatically vacate at the end of the lease term.

Currently, if the tenancy continues on a month to month basis then the landlord may only increase the rent in accordance with the RTA, which limits the rent increase to the amount:

  1. calculated in accordance with the regulations;
  2. a landlord may justify on an application to the residential tenancy branch; or
  3. agreed to by the tenant in writing.

To work around these rent controls, some landlords include move out clauses to force tenants to agree to higher rent under a new fixed term tenancy agreement. The proposed new law will close this loophole by limiting rent increases between fixed-term tenancy agreements with the same tenant to the maximum set under the regulations.

The government is also proposing to regulate the circumstance in which a move out clause can be enforced at all. These limits are presumably an effort to provide more secure long-term rental housing.  However, landlords that still want to use move out clauses will need to determine if their reasons for doing so are allowed under the RTA.

Other proposed amendments are aimed at creating an expedited process for tenants to apply for double their security deposits if the landlord does not return the deposit in time after the tenancy ends. A landlord wanting to keep all or part of the deposit must get the tenant’s consent in writing or bring a dispute application. If the landlord does neither then the tenant may apply for double the security deposit as a penalty for the landlord. The new process would grant the order for double the deposit without the need for a hearing. This change makes sense since all the evidence in such claims must be in writing anyway.

Stay tuned for the final changes.

WHAT WE DO: Lesperance Mendes regularly advises landlords and tenants on tenancy agreements and disputesTo make an appointment, please contact Alex J. Chang, associate, email at ajc@lmlaw.ca or Paul G. Mendes, Partner, by email at pgm@lmlaw.ca.

THIS ARTICLE IS NOT LEGAL ADVICE:  This article provides general information and should not be relied on without independent legal advice.