B.C. to extend rent freeze to end of 2021, increase protections against ‘renovictions’

NDP government says it’s meeting recommendations from a 2018 task force on rental issues

Tenants can disregard any notice of a rent increase they’ve received that would have taken effect before Jan. 1, 2022. Starting next year rent hikes will be capped at the rate of inflation. (Rafferty Baker/CBC)

The British Columbia government says it will introduce legislative changes to extend a rent freeze through to the end of this year to stop illegal “renovictions” and improve the dispute resolution process for tenants and landlords.

The province has already introduced and extended a rent freeze during the COVID-19 pandemic, and it says in a news release Monday that new legislative changes will keep it in place through Dec. 31.

It says tenants can disregard any notice of a rent increase they’ve received that would have taken effect before Jan. 1, 2022, and starting next year rent hikes will be capped at the rate of inflation.

The release says before the NDP government took power in 2017, the maximum allowable rent increase was as high as 4.3 per cent, well above inflation.

‘Progress’

“We know there’s more to do, but with these new changes, we’re continuing to make progress,” said Spencer Chandra Herbert, MLA for Vancouver West End.

The province also says the legislative changes mean tenants will no longer face so-called renovictions, or eviction notices for “phoney” renovations aimed at driving out long-term tenants and jacking up the rent.

Landlords will be required to apply to the Residential Tenancy Branch before they can end a tenancy agreement for renovations, and they will also not be able to evict tenants for renovations that are not substantial or do not require the unit to be vacant.

‘Not surprised’

Andrew Sakamoto, executive director of the Tenant Resource and Advisory Centre, said as part of the release that it is common for landlords to illegally renovict tenants without the necessary permits required by law or for minor cosmetic improvements.

“Rather than forcing tenants to dispute these types of meritless eviction notices, we are pleased that landlords will now have to go through an application process before issuing such notices in the first place,” he said.

Spencer Chandra Herbert, MLA for Vancouver West End, holds a media briefing Monday on behalf of Attorney General and Minister Responsible for Housing David Eby. (CBC News)

David Hutniak, CEO of Landlord B.C., which supports landlords in the province, says the extended period of frozen rents was expected.

“We’re not surprised,” he said about Monday’s announcement.

He said that by the end of 2021, it will be close to two years since landlords have been able to raise rents to help cover property taxes, insurance, maintenance costs and increased costs due to the pandemic

“Which is very challenging … COVID-related expenses are going through the roof,” he said.

He says his members are looking forward to increasing rents in line with inflation in 2022.

The bill with the proposed changes comes on the first day that the Legislative Assembly of British Columbia resumed its 42nd parliamentary session.

The bill stems from 23 recommendations made by a B.C.’s rental housing task force in 2018, which focus on protecting tenants from situations where they are forced to move out by landlords who say they plan to renovate the property.

Monday’s bill includes expanding administrative penalties that can be levied as part of dispute resolution proceedings and grounds for the review of arbitrator decisions.

The bill also clarifies language in the Manufactured Home Park Tenancy Act to address conflicts between park rules and tenancy agreements.

BC will end its ban on evictions for unpaid rent in September

On Thursday, the BC government announced it will lift the ban on evictions for non-payment of rent on Sept. 1.

The ban was first implemented in March due to the COVID-19 crisis, covering evictions, a ban on rent increases, and a rental benefit worth up to $500 a month due to the COVID-19 crisis.

The government is implementing a repayment framework to ensure renters have a reasonable timeframe to pay back any rent they owe.

Landlords have to give tenants until July 2021 to repay any outstanding rent, as long as monthly instalments are paid.

“Recognizing that many renters and landlords worked together to make arrangements during this crisis, the framework will also leave some flexibility for landlords to work with renters to further adjust the payment amounts,” the ministry said in a statement.

“For example, allowing lower payments in the beginning of the agreement and gradually increasing the payment amounts over time or extending the duration of the payment process past July 2021.”

The rental supplement provides $500 per month for eligible households with dependents and $300 per month for eligible households with no dependents.

Eligible roommates are also able to apply for the supplement.

The ban on rent increases will remain in place until December.

Blanket Ban on Residential Evictions Ends

Landlords with existing orders for eviction can take them to the courts beginning July 2, 2020, for enforcement and can enforce a writ order effective immediately. Landlords can enter a rental suite with 24-hour notice and don’t need the tenant’s consent. And documents can now be served in person.

REALTORS® and landlords are expected to follow health guidelines like physical distancing, cleaning and wearing masks when appropriate. Please continue with your diligence in showing property and meeting with clients. Check out the protocols from WorkSafeBC for more information.

The government commits to giving advance notice before lifting the moratorium on evictions for non-payment of rent at a future date. A framework will be put in place that will require landlords to work with tenants to repay rent that’s owing over a reasonable period of time.

For now, the freeze on rent increases remains in place, as does a landlord’s ability to restrict access to common spaces.

Read the government news release here and information about COVID-19 and tenancies here. And these are the timelines required for serving notices during tenancies.

UPDATE: Extension of BC’s State of Emergency – What it means for REALTORS®

 

This post, originally titled “Government Announcement on Renters and Landlords – What it Means for Realtors”, was updated on May 28, 2020 following the two-week extension of BC’s State of Emergency.

On May 27, 2020, Premier John Horgan extended BC’s state of emergency until June 9, 2020. This means that the Residential Tenancy Order (RTO), which expires only when the state of emergency is lifted, has also been extended.

The Residential Tenancy Order bans evictions and provides other protections for renters – see below for more information. To avoid a situation where there are a lot of evictions, the provincial government intends to have a transition plan in place before the state of emergency ends. They are well aware of the need for real estate transactions to complete and for buyers to be able to occupy their new homes. BCREA will provide more information as the transition plan develops.

Here is an overview of the order:

Eviction moratorium – Landlords can no longer give a tenant a notice to end the tenancy except in situations where people or the rental unit are at significant risk. However, if a landlord gave a tenant a notice to end the tenancy before March 30, then the notice remains in effect, subject to the dispute resolution process, and an order of possession can still be granted.

This may be complicated in cases where a tenant is under mandatory quarantine, self-isolation or a medical facility. In those cases, it’s advisable to seek legal advice.

Landlord’s right to enter rental unit – A landlord can enter a rental unit for repairs or showings, as long as the tenant consents. Follow the standard procedure of requesting access at least 24 hours in advance, noting the proposed date and time – and be sure to wait for the tenant’s consent. Landlords can enter rental units without tenant consent if there is an emergency in relation to the COVID-19 pandemic and the entry is necessary to protect health, safety or welfare of the landlord, the tenant or other occupants.

Rent freeze – Rent increases set to occur while this order is in effect, including previously announced rent increases set to take effect from March 30 onwards, do not take effect until after the state of emergency has ended. Exceptions for rent increases include if there one or more occupants are added and the tenancy agreement specifies how the rent varies with the number of occupants.

Restricting access to common areas – Landlords can reasonably restrict access to common areas to prevent the spread of COVID-19

More information is available on the Residential Tenancy Branch website.

Rental supplement on the way

Another significant government program to support renters and landlords is the BC-Temporary Rental Supplement Program (BC-TRS). Tenants who have lost or reduced income because of COVID-19 will be eligible to apply for the program through the BC Housing website.

Rent’s Due – Now what?

bad news as May rent comes due

Property managers, landlords and building owners are bracing for bad news today, as the COVID-19 pandemic’s effect on the economy is expected once again to disrupt the property rental market.

While reports suggest most residential and commercial tenants were able to pay their rent in April, it’s believed more will be asking for help this month and beyond in the form of provincial assistance, deferrals and forgiveness from landlords.

“I don’t think there’s any question May will be worse than April, and June will be worse than May,” said David Hutniak, executive director of Landlord B.C.

“Right now, renters are hurting, and quite frankly, so are an awful lot of landlords.”

That’s why Landlord B.C., which represents 3,300 residential landlords with about 125,000 units in B.C., has petitioned the province to expand its rent-relief program.

Hutniak said the province is to be applauded for its rent-supplement program, which was enacted quickly and provided $300 per month for eligible households with no dependents, and $500 per month for eligible households with dependents.

But he said in a province where it’s not uncommon for renters to spend 30 to 50 per cent of their income each month on rent, it doesn’t go far enough.

Landlord B.C. is calling for the current rent-supplement benefit to be increased to $750 per month for renters with no dependents, and $1,000 per month for renters with dependents. It’s also asking that the supplement be left in place until August.

“We are a wealthy province and we can afford to do this,” said Hutniak.

The province hasn’t said how much it expects to spend on the assistance program each month.

B.C. Housing, which administers the program, said there have been 64,312 applications for rent relief since it opened April 9, and within two weeks of that date, more than 54,000 renters received confirmation they would be eligible.

So far, just over 8,700 payments have been made to landlords, and about 2,000 more are ready for the next cheque run, while another 43,000 applications are being processed.

The Ministry of Municipal Affairs and Housing would not comment on whether it would consider enhancing the program, but said that it’s the strongest rental-support program in the country with the highest level of direct support to help pay rent.

The ministry said it is committed to doing what it takes to support people, which has included freezing rent increases and stopping all evictions.

Small landlords squeezed

With evictions banned, up to 45 per cent of B.C. tenants in some buildings did not pay rent April 1 and about 30 per cent of all Alberta tenants also failed to pay rent on time. In Saskatchewan, 27 per cent of tenants did not pay rent April 1.

There are concerns May 1 could see similar scenarios right across Western Canada.

While large landlords, such as real estate investment trusts, may have deep enough pockets to weather the pandemic storm, owners of small apartment buildings and those holding rental condos and secondary rental suites often depend on rental income to cover their own mortgage payments, property taxes and other costs.

B.C. has banned rental evictions for three months, and its direct payment of $500 per month to landlords barely cuts it in Vancouver where the average monthly rent is the highest in Canada at $2,700, landlords say.

David Hutniak, CEO of LandlordBC, said that, with no potential for evictions, landlords have little protection if a tenant refuses to pay.

“This is wide open to potential abuse,” Hutniak said.

“Two-thirds of landlords in Metro Vancouver are mom-and-pop situations,” Hutniak added. These owners are also struggling during the current crisis, he said.

According to a December 2019 survey by Canada Mortgage and Housing Corp., there are 67,000 rental condos in Metro Vancouver, and investor condos are a mainstay of the rental universe across Canada.

A survey of Vancouver landlords found that, in some buildings, nearly 50 per cent of  tenants did not pay rent April 1, according to Mark Goodman, a multi-family specialist with Goodman Commercial.

Hutniak also noted a naïveté in the recommendation that landlords seek a mortgage payment deferral.

“We have heard advocates speak about landlords getting mortgage deferrals so they can ‘pass those savings on to renters.’ But a mortgage deferral by a bank does not constitute any savings to the landlord. It has to be paid back with compound interest on the deferred amount.  In other words, interest upon interest,” Hutniak explained. Any deferred amount is added to the mortgage principal, whereas a landlord doesn’t have any security for deferred rent from a tenant, he noted, or from the loss of legal rent increases.

The Alberta government banned evictions for non-payment of rent April 1, suspended late fees for three months and froze rent increases for the duration of the COVID-19 emergency. Similar measures are in place in Manitoba and Saskatchewan.

Paul Jones, president of the Alberta Residential Landlord Association, told the Edmonton Journal that 30 per cent of tenants did not pay rent April 1 and many landlords are worried by the number of tenants simply walking out on leases.

It is up to landlords to work out relief with tenants, according to Louise Elsey, who took over as chief operating officer for Avenue Living Communities just as the pandemic hit. Within days, Calgary-based Avenue Living had voluntarily frozen rent increases and was offering tenants weekly payment options. Avenue Living has around 10,000 suites in 19 markets across the Prairie provinces, which it manages for investors.

“The COVID-19 crisis has certainly added an additional layer of pressure. There is a heightened level of responsibility to our residents, our staff and our investors,” said Elsey. The proactive stance appears to have paid off: Avenue Living reported April 27 that 92 per cent of tenants had paid their April rent.

Recommendations from landlord associations include an idea that governments offer some form of rental bank that would offer low-interest loans to allow tenants who would pay it back over time.

William Blake, a landlord who owns small rental properties in Alberta and British Columbia warned that  banning evictions is just delaying an inevitable wave of evictions as landlords will eventually need the money to pay taxes, mortgages and maintenance fees.