Copyright 2017 by the UBC Real Estate Division

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1 DISCLAIMER: This publication is intended for EDUCATIONAL purposes only. The information contained herein is subject to change with no notice, and while a great deal of care has been taken to provide accurate and current information, UBC, their affiliates, authors, editors and staff (collectively, the "UBC Group") makes no claims, representations, or warranties as to accuracy, completeness, usefulness or adequacy of any of the information contained herein. Under no circumstances shall the UBC Group be liable for any losses or damages whatsoever, whether in contract, tort or otherwise, from the use of, or reliance on, the information contained herein. Further, the general principles and conclusions presented in this text are subject to local, provincial, and federal laws and regulations, court cases, and any revisions of the same. This publication is sold for educational purposes only and is not intended to provide, and does not constitute, legal, accounting, or other professional advice. Professional advice should be consulted regarding every specific circumstance before acting on the information presented in these materials. Copyright: 2017 by the UBC Real Estate Division, Sauder School of Business, The University of British Columbia. Printed in Canada. ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced, transcribed, modified, distributed, republished, or used in any form or by any means graphic, electronic, or mechanical, including photocopying, recording, taping, web distribution, or used in any information storage and retrieval system without the prior written permission of the publisher.

2 RESIDENTIAL TENANCIES Learning Objectives Upon completion of this lesson, a student should be able to: Identify the legislation governing residential tenancies (Residential Tenancy Act, Manufactured Home Park Tenancy Act and other laws) and when they apply Explain the jurisdiction of the Residential Tenancy Board Distinguish between the different types of tenancies (leases vs. license to occupy, and fixed vs. periodic terms) Identify the form, content and interview requirements in a tenancy application Identify the form and content requirements of a tenancy agreement including the standard, implied, additional, and material terms Describe how to manage deposits including security deposits, pet damage deposits, and the return of deposits Describe the tenant s obligation to pay rent in return for the rental of a unit and related services Explain the landlord s and tenant s obligation in respect to repair and maintenance, smoking, and assignment and subletting Define the concept of quiet enjoyment Define the concept of distress Describe the circumstances where a rent increase is allowed Explain the parties duty to mitigate losses Describe the types of reasons a landlord must give for terminating a tenancy and the specific notices required Describe when to issue a use and occupancy receipt Explain how to perform a condition inspection

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4 Residential Tenancies 1 THE RESIDENTIAL TENANCY BRANCH ( RTB ) The Residential Tenancy Branch ( RTB ) is the administrative body tasked with overseeing residential tenancies in BC and providing information and dispute resolution services for landlords and tenants. In addition to dispute resolution services, the RTB publishes a number of Policy Guidelines and other resources for landlords and tenants alike. The RTB s mandate covers both the Residential Tenancy Act and the Manufactured Home Park Tenancy Act, which will be discussed in further detail below. The RTB employs Information Officers who respond to telephone and in person queries from members of the public and assist landlords and tenants in navigating the various RTB proceedings. The RTB is also tasked with conducting dispute resolution hearings, making Orders for completion of specific tasks arising from those proceedings, and ordering administrative penalties, in appropriate circumstances. Property managers should be familiar with the RTB s function and mandate. In addition, it is prudent to periodically review the Policy Guidelines and other informative materials posted on the RTB s website: www2.gov.bc.ca/gov/content/ housing-tenancy/residential-tenancies. The Law Residential Tenancy Act ( RTA ) The Residential Tenancy Act ( RTA ) is the statute that governs residential tenancies in BC. Sections 8-11 of the RTA address the administration of the Act and the powers of the Director. The Director is responsible for the administration and management of all matters and persons under the RTA. This administration includes overseeing the RTB s publications and approving forms used by landlords and tenants. The Director s powers may be delegated to employees who exercise the Director s powers through the RTB. The two main categories of individuals who receive the Director s delegated authority under the RTA are: Information Officers who provide an educational resource to the public, including landlords, tenants and property managers, and Dispute Resolution Officers (also known as Arbitrators) who preside over dispute resolution proceedings. The scope of their powers and responsibilities are addressed in further detail later in this chapter. Manufactured Home Park Tenancy Act ( MHPTA ) The Manufactured Home Park Tenancy Act ( MHPTA ) is the statute that governs tenancies at manufactured home sites and manufactured home parks in BC. Refer to Chapter 5 (The Subdivision of Land and Title Registration in British Columbia) for an earlier discussion on manufactured homes. The MHPTA addresses the creation and termination of tenancies at manufactured home parks, and sets out rules for dispute resolution. A Director is appointed to oversee the MHPTA in the same manner as a Director is appointed to oversee the RTA. The Information Officers and Arbitrators at the RTB also manage and enforce tenancies governed by the MHPTA. Other Laws Residential Tenancy Branch (RTB) the administrative body tasked with overseeing residential tenancies in BC and providing information and dispute resolution services for landlords and tenants information officer employees of the Residential Tenancy Branch who respond to telephone and in person queries from the public orders official documents issued by an arbitrator directing one of the parties to complete a specific task director person appointed under the Residential Tenancy Act to oversee the administration and management of all matters and persons under the Residential Tenancy Act dispute resolution officer (arbitrators) employees of the RTB who preside over dispute resolution proceedings; also referred to as Arbitrators Regulations have been created pursuant to both the RTA and the MHPTA. These regulations provide additional rules and parameters for landlords and tenants. In addition, the RTB itself publishes a number of Policy Guidelines that provide important information about how the RTB will administer the RTA and the MHPTA and what factors might be considered when specific issues are raised by landlords and tenants at a dispute resolution hearing.

5 2 Rental Property Management Licensing Course Manual Apart from remaining mindful of the RTA and MHPTA, landlords and tenants should also be aware that residential tenancies may be impacted by other pieces of legislation including the Human Rights Code and the Personal Information Protection Act. The first deals with the protection of human rights and the prohibition against discrimination. The second deals with the protection of personal information and privacy issues that arise in residential tenancies. Both of these laws can affect issues like tenant selection and accommodations for persons with disabilities. The impact of these statutes on residential tenancies are explored in depth in Chapters 14 (Human Rights Law) and 15 (Protection of Personal Information) of this Course Manual. In addition, the common law rules regarding contracts are relevant to residential tenancies. A residential tenancy agreement is a contract, and the agreement under which the landlord and tenant operate is still guided by the body of case law developed in this area. Refer to Chapter 8 (The Law of Contract) for a discussion on contract law. Jurisdiction The RTB is an administrative body. This means that it is a body created by the government for a specific purpose (in this case, the administration of residential tenancy law in BC). The RTB is not empowered to deal with every dispute that might arise in a tenancy, but only those matters that are governed by the RTA and MHPTA. For example, the RTB s jurisdiction is limited with respect to lands belonging to First Nations peoples. The RTA and the MHPTA do not apply to tenancy agreements and property on reserve lands. However, in a tenancy where the landlord is a non-first Nations person, there may be limited jurisdiction for the RTA or MHPTA to apply with respect to monetary claims for damage or rental arrears. Further, the RTB s jurisdiction is limited with respect to monetary awards. This limit coincides with the maximum amount that can be ordered in British Columbia Provincial Court (Small Claims), which is currently $25,000. Claims in excess of this amount may only be decided by the Supreme Court of British Columbia. However, landlords and tenants may abandon the portion of their claim in excess of $25,000 in order to come within the RTB s jurisdictional limits and take advantage of its administrative processes. Decisions to waive a portion of a monetary claim and to proceed to the RTB are typically made to avoid the significant time and expense associated with pursuing a Supreme Court proceeding. As a Rental Property Manager... Property managers should be mindful of the jurisdictional limits of the RTB when pursuing or defending a claim under the RTA or MHPTA. For more information, see Policy Guideline #27 available online at the RTB website. Subject Matter Administrative bodies, like the RTB, are also generally limited to subject matter covered by their enabling statute (i.e., the law that created them and sets out their powers). In the case of the RTB, its powers are limited to matters arising from the RTA and the MHPTA: tenancy agreements, rental units, and residential property. The RTA does not, for example, apply to: commercial tenancies; tenancy agreements to which the MHPTA applies; tenancy agreements for a term of more than 20 years; housing cooperatives; student housing provided by an educational institution; living accommodation where the tenant shares bathroom or kitchen facilities with the owner; living accommodation provided under certain healthcare legislation, such as the Community Care and Assisted Living Act; rental units operated by certain public bodies where the rent is related to the tenant s income (partial exemption from the RTA); hotels generally, unless the person occupies a hotel pursuant to a tenancy agreement; and vacation homes or travel accommodations. For example, the RTA would not apply to a unit rented for a short term through Airbnb, but may well apply to a summer cottage rented for a fixed term of one year.

6 Residential Tenancies 3 A full list of matters to which the RTA does not apply to is set out in section 4 of the RTA. Property managers should familiarize themselves with this list of exceptions in section 4 when managing rental properties in British Columbia, and particularly when faced with a rental that does not occur in a traditional rental apartment building. Limitation Periods As noted above, tenants and landlords can apply to the RTB for resolution of disputes arising in tenancy matters. However, the RTA and the MHPTA create statutory time limits within which dispute resolution matters must be brought forward. These time periods are known as limitation periods, which were briefly introduced in Chapter 1 (Fundamentals of Law). Pursuant to section 60 of the RTA, a tenant or landlord only has two years from limitation periods the conclusion of the tenancy to bring forward their application for dispute resolution, statutory time limits unless a different time limit is identified in the RTA. Similarly, section 53 of the MHPTA within which dispute also provides a two-year window to apply for dispute resolution, barring any different resolution matters must be deadlines provided for by that legislation. Despite these time limits, a RTB Arbitrator brought forward retains a residual discretion to extend a time period set by the RTA or MHPTA in certain circumstances. These powers are set out in sections 59 and 66 of the MHPTA and RTA, respectively. In summary, a RTB Arbitrator has the authority to extend or modify a time limit imposed by the RTA or MHPTA in exceptional circumstances. The justification for the extension must be strong and compelling and supported by persuasive evidence. Examples of what would constitute exceptional circumstances include the hospitalization of a party. Evidence in support of an extension request might include a letter issued by the hospital or a treating physician. Merely feeling unwell or unprepared, changing one s mind, or relying on incorrect information will not constitute exceptional circumstances to warrant extending a time limit under the RTA or MHPTA. A RTB Arbitrator will typically consider the following non-exhaustive criteria in evaluating exceptional circumstances: the party did not willfully fail to comply with the relevant time limit; the party had a bona fide intention to comply; reasonable and appropriate steps were taken to try to comply; the failure to meet the time limit was not caused by the conduct of the party; the party filed an application which shows a claim that appears to have merit; and the party brought the application to extend as soon as was reasonably practicable. If a party is able to establish exceptional circumstances, the Arbitrator has the authority under the RTA or MHPTA to extend a time limit imposed by the legislation. Property managers should be mindful of the time limits imposed by the RTB and pursue any applications for dispute resolution in a timely manner. For more information on these time limits, see Policy Guideline #36. RESIDENTIAL TENANCY LAW The rights and obligations of landlords and tenants are derived from three main sources: legislation; the common law; and the contract between the parties (i.e., the tenancy agreement). As noted above, the primary statute that governs residential tenancies in British Columbia is the Residential Tenancy Act and the Residential Tenancy Regulation ( Regulations ), which cannot be contracted out of. Section 5 of the RTA establishes that any attempt to contract out of the RTA or the Regulations is not permissible and is of no effect. In addition, other pieces of legislation will impact residential tenancies including statutes addressing privacy, human rights, health and safety, and employment matters. Property managers who are responsible for managing rental properties in BC should be familiar with the fundamentals set out in the RTA and the Regulations. In addition, property managers should be mindful of their obligations and the obligations of the landlord under contract, including both the tenancy agreement itself and any contracts between the landlord and the property management brokerage.

7 4 Rental Property Management Licensing Course Manual Types of Residential Tenancies The RTA includes important definitions with respect to what constitutes a tenancy and a tenancy agreement. The pertinent portions of section 1 read as follows: tenancy means a tenant s right to possession of a rental unit under a tenancy agreement tenancy agreement means an agreement, whether written or oral, express or implied, between a landlord and a tenant respecting possession of a rental unit, use of common areas and services and facilities, and includes a licence to occupy a rental unit Lease vs. Licence to Occupy The origins of property law are rooted in historical common law traditions which drew a distinction between a lease and a licence to occupy. As discussed in Chapter 4 (Estates and Interests in Land), leases would create an interest in land, which would run with the land. This would mean that successors in title, such as a new owner, would be bound by any applicable leases. By contrast, a licence is contractual in nature and would not afford an interest in land. Accordingly, licences would not bind a new owner in the same manner as a lease. Lease agreements give rise to a relationship of landlord and tenant, whereas a licence does not. tenancy a tenant s right to possession of a rental unit under a tenancy agreement tenancy agreement an agreement, whether written or oral, express or implied, between a landlord and a tenant respecting possession of a rental unit, use of common areas and services and facilities, and includes a licence to occupy a rental unit Fixed Term vs. Periodic Term A licence affords only the rights and obligations expressly stated in the contract; it conveys a privilege to use the property. A contemporary example of a licence might include an Airbnb rental; it affords the renter the right to use and occupy the property of another without giving rise to the rights and obligations of a landlord and tenant. The central distinction between a lease and licence relates to control and exclusivity of possession. The test to determine whether or not an agreement has created a lease or a licence depends on the intention of the parties. It will not be determined by the particular terms selected by the parties (i.e., licensee and licensor), although that may provide evidence of the parties intentions. If there is exclusive possession for a term and rent is paid, there is a presumption that a tenancy has been created, unless circumstances suggest otherwise. For more information about some of these factors, see Policy Guideline #9. lease a contract that transfers exclusive possession and control over real property for a definite period of time, thereby creating a landlord and tenant relationship license to occupy a contract that creates the right to use and occupy a property, but does not give rise to a landlord and tenant relationship fixed term tenancy a tenancy under a tenancy agreement that specifies the date on which the tenancy ends periodic tenancy a tenancy which automatically renews itself on the last day of the term for a further term of the same duration until terminated by either party The RTA defines a fixed term tenancy and a periodic tenancy in section 1 as follows: fixed term tenancy means a tenancy under a tenancy agreement that specifies the date on which the tenancy ends periodic tenancy means (a) a tenancy on a weekly, monthly or other periodic basis under a tenancy agreement that continues until it is ended in accordance with this Act, and (b) in relation to a fixed term tenancy agreement that does not provide that the tenant will vacate the rental unit at the end of the fixed term, a tenancy that arises under section 44 (3) [how a tenancy ends] Accordingly, a fixed term tenancy is a tenancy with a pre-determined expiry date. Upon the conclusion of a fixed term tenancy, two results may occur: 1. First, if the landlord and the tenant do not enter into a new tenancy agreement before the expiry date and the agreement is silent as to whether the tenant must vacate at the end of the term, and the tenant continues to occupy the premises, then section 44 of the RTA presumes that the landlord and the tenant have renewed the original agreement on a month-to-month basis (i.e., a periodic tenancy). The tenancy will carry on under the same terms and conditions as those set out in the original tenancy agreement.

8 Residential Tenancies 5 2. Second, the tenancy agreement will expire on the date specified and the tenancy will not continue. However, in order for this result to occur, the tenancy agreement must specify that the tenant will vacate the rental unit on the end date specified for the fixed term. Periodic tenancies are typically created in one of two ways. Firstly, they can be created by specific wording in a tenancy agreement. For example, the tenancy agreement could state that the landlord and tenant agree that rental of the premises will be on a month-to-month basis. Secondly, a periodic tenancy may be created pursuant to section 44 of the RTA, as discussed above. As a Rental Property Manager... Property managers should be familiar with a standard tenancy agreement and the selection of periodic or fixed term tenancies. 2. LENGTH OF TENANCY (please fill in the dates and times in the spaces provided) This tenancy starts on: day month year Length of tenancy: (please check a, b or c and provide additional information as requested) This tenancy is: a) on a month-to-month basis b) for a fixed length of time : ending on: length of time day month year At the end of this fixed length of time : (please check one option, i or ii) i) the tenancy may continue on a month-to-month basis or another fixed length of time ii) the tenancy ends and the tenant must move out of the residential unit If you choose this option, both the landlord and tenant must initial in the boxes to the right. c) other periodic tenancy as indicated below: weekly bi-weekly other: Landlord s Initials Tenant s Initials Source: www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/starting-a-tenancy/tenancy-agreements Accordingly, when considering fixed term tenancies and periodic tenancies, property managers should be mindful of the terminology included in the tenancy agreement. If the parties intend to create a fixed term tenancy with a specific end date, care should be taken to ensure that the date is clearly set out in the agreement and whether or not the tenant is required to vacate at the end of that term. Tenancy Applications Tenancy applications are an integral first step in the creation of the landlord and tenant relationship. Each step towards the creation of a residential tenancy will impact how it progresses and how it ultimately concludes. Accordingly, property managers should be mindful of the application process and consider best practices for navigating these early days of a residential tenancy relationship. FIGURE 10.1: Starting a Tenancy Tenancy Application Interviews Tenancy Agreement Deposits and Condition Inspections

9 6 Rental Property Management Licensing Course Manual Desirable tenants are persons who: are able to pay rent; maintain the property in a good state of repair; live amicably with their neighbours; and typically prefer long-term housing. Property managers should consider the type of tenant they are seeking and what qualities would be suitable for the particular rental property by having a discussion with the landlord client. Property managers should design rental advertisements and tenancy applications that assist them in determining if an applicant would be a desirable tenant. In any of these decisions, the property manager should consult with their client who may have specific intentions for the rental property and prospective tenants. Form and Content Requirements Tenancy applications and advertisements are not extensively discussed in the RTA. Nevertheless, property managers should be mindful of certain risks in the creation of advertisements for rental properties and the application forms created for prospective tenants. Section 15 is the only component of the RTA that addresses tenancy applications. Application and processing fees prohibited 15 A landlord must not charge a person anything for (a) accepting an application for a tenancy, (b) processing the application, (c) investigating the applicant s suitability as a tenant, or (d) accepting the person as a tenant. Apart from prohibiting the collection of fees for processing a rental application, the RTA is silent on residential tenancy applications, forms, content and procedures. Similarly, the RTB has not published any Policy Guidelines that address matters pertaining to applications or that provide landlord and tenants with additional information or guidance. Fortunately, other landlord and tenant associations in BC publish sample application forms (e.g., the Professional Association of Managing Agents and Landlord BC). Property managers should review and consider these sample applications when processing their own applications on behalf of their clients. As mentioned above, property managers should work in consultation with the property owner/client when crafting an appropriate application form. There may be specific criteria that the owner wishes to include as a means of protecting his or her investment. Certainly, when considering an application from a prospective tenant, landlords and/or property managers should verify the identity of the person submitting the application. This can be accomplished by reviewing the individual s photo identification at the time of completing and submitting the rental application. At a minimum, the application form should: 1. identify the names of all the proposed tenants and occupants of the rental property; 2. include the applicants and potential occupants current address and telephone number; 3. include references from current and prior landlords; and 4. include a brief rental history outlining prior residences of the prospective tenants. It is also advisable to collect the information necessary to perform a credit check on the prospective tenant. This check will permit the landlord and/or property manager to confirm that the tenant is in a position to pay rent and that there are no red flags with respect to their credit history, as the rental application is intended to be a preliminary step in forming the residential tenancy relationship. A copy of the proposed tenancy agreement should be provided to the applicant(s) for their review at the time of submitting the rental application to ensure that both parties are clear as to what tenancy agreement is being applied for. As a Rental Property Manager... It is important to remember that privacy law applies to residential tenancies. As a property manager, you cannot collect a potential tenant s social insurance number ( SIN ) at any time during the rental application process. It is not necessary to request a tenant s SIN in order to complete a credit check; a tenant s full name, date of birth and current address are sufficient. See Privacy Guidelines for Landlords and Tenants for more information:

10 Residential Tenancies 7 FIGURE 10.2: Checklist for Tenancy Applications At a minimum, property managers should ensure that a tenancy application contains: ;; Full names and contact information of proposed tenants ;; Verified identification (Cannot collect SIN) ;; References ;; Rental history ;; Credit check ;; No fee for application ;; Personal information that is reasonably necessary (PIPA) ;; No discrimination on enumerated grounds (HRC) Property managers engaged in the process of issuing application forms and receiving completed application materials should be mindful of applicable privacy and human rights legislation. For example, it will be necessary during the application process to obtain a significant amount of personal information about individual applicants. Personal information of this nature is protected by the Personal Information Protection Act ( PIPA ). Under this legislative framework, landlords and property managers are only permitted to request personal information from a prospective tenant that is reasonably necessary to the decision being made; namely, whether or not to rent to that person. If the information sought is more than what is reasonably necessary to make the decisions, the prospective tenant is entitled to refuse to provide the information without repercussions. Similarly, landlords and property managers must avoid seeking information or processing a rental application in a manner that runs contrary to the Human Rights Code ( HRC ). The HRC protects persons from being denied the opportunity to submit a rental application or enter a lease on the basis of a protected personal characteristic (e.g., family status, marital status, sex, physical and mental disability). For more information about the privacy and human rights considerations pertinent to tenant applications, see Chapters 15 (Protection of Personal Information) and 14 (Human Rights Law) of this Course Manual. Interviews The tenant interview will typically be the last step in the rental process before a residential tenancy agreement is signed. It provides an important method for landlords and property managers to evaluate and consider prospective tenants and determine if they wish to accept their application to rent the particular property. Tenant interviews will typically occur via telephone or in person. The location can vary, but typical choices include the inside of the prospective rental unit, onsite at the rental property, in the property manager s office, or at a public location. Property managers should take care to select a location that facilitates a comfortable dialogue, but is sufficiently discreet as to permit the prospective tenant to discuss his or her personal information without concern. As a Rental Property Manager... The tenant interview is a second opportunity for the property manager or landlord to glean important information about the prospective tenant s history and personality, after the application. This information could include their current rental situation, the reasons for departing that residence, and what material terms of the tenancy agreement may be required. It will also give the property manager or landlord the opportunity to gauge the tenant s personality and provide insight into what they would be like as a tenant including: Will the tenant maintain the property well? Will the tenant be a problem tenant for other residents? Was the tenant evicted from a previous tenancy? The tenant interview is also an opportunity for the property manager to convey the expectations of a prospective tenant and provide information about the application process. Prospective tenants should be advised of the time at which the property manager expects to notify the tenant of the status of their application. Clearly communicating timelines and expectations is the best way to start a tenancy relationship off on the right foot.

11 8 Rental Property Management Licensing Course Manual Although the RTA does not assist with conducting tenant interviews, property managers should not overlook its significance. Property managers should be mindful of their professional obligations to their clients - any failure to perform these important checks can expose a property manager to professional sanctions and legal claims from dissatisfied clients. Said v. Meadow Ridge Classic Realty, 2014 BCPC 129 In Said, the Provincial Court of British Columbia considered a case in which an owner brought a claim against their former property manager after entrusting the manager with renting the family home while the owner took a year-long holiday. Unfortunately, the resulting management of the rental property was sub-standard. Like all property management agreements in BC, this particular rental property management agreement set out specific requirements and obligations on the manager when renting the property, including using due diligence in renting, operating, and managing the family home. In this case, the property manager s interview process was wholly deficient, and tenants began occupying the premises whom the Court described as grossly unsatisfactory and unsuitable. Transient subtenants eventually took up residence at the property, and the property soon fell into a state of disrepair with multiple City violations for illegal storage activities, including the storage of several abandoned vehicles. In reviewing the case, the Court noted that the rental application form was incomplete where much of it was left blank, and several red flags were raised within the application itself. It was evident that the property manager had not, or had inadequately, reviewed the tenant references. The property manager s notes were also limited and poor. Although the property manager represented that a credit check had been obtained, the credit report was never tendered into evidence. The Court found that the property manager was grossly negligent in the management of the rental property, and awarded the owner the maximum amount permitted in Small Claims Court: $25,000 plus filing fees and disbursements. The Said case represents a worst case scenario of what can occur if prospective tenants are not adequately screened. Property managers should be mindful of their obligations, professional reputations, and conduct thorough and fair interviews. Although interviews can be a challenging experience, property managers must ensure that they obtain the information they need to satisfy themselves that a prospective tenant is suitable for the property and the property owner. In the event that there are linguistic barriers, an interpreter should be used. If the property manager has any concerns that an applicant does not understand a question that was included on the application form, or posed in person, the property manager should take care to ensure the applicant understands the question and provides a satisfactory answer before agreeing to accept the individual s rental application. Property managers should also be mindful of applicable privacy and human rights legislation that impacts the interview process. As noted above, the provisions of PIPA apply to the nature and scope of personal information, which can be properly requested by the property manager or landlord conducting an interview. For more information on these provisions and their impact on the rental application and interview process, see Chapter 15 (Protection of Personal Information). In addition to being mindful of privacy issues, property managers must also consider the potential human rights issues that can arise during the interview process. Human rights complaints can relate to allegations of discrimination in the rental application process. Property managers are required to ask certain sensitive questions in order to obtain the necessary information from prospective tenants. However, in so doing, care should be taken not to make any comments or decisions that could be regarded as a violation of the HRC (e.g., denying a person the right to submit a rental application because they have a guide animal). See Chapter 14 (Human Rights Law), for a more in-depth consideration of the intersection between property management and human rights. Creating a Tenancy Agreement Form and Content Requirements The RTA prescribes certain form and content requirements for all residential tenancy agreements. Every tenancy agreement entered into on or after January 1, 2004 must be in writing. The requirement that tenancy agreements be in writing is an important one: it ensures that both parties have a written record of exactly what was agreed to. As a tenancy agreement is a contract which creates rights and corresponding obligations for both the landlord and tenant, it is important that the parties understand their rights and obligations. The

12 Residential Tenancies 9 contract is the foundation of the landlord and tenant relationship and each party s rights and obligations in the residential tenancy. Having clear and certain terms of the residential tenancy relationship protects the landlord s investment and also the tenant s expectations of their principal residence. Property managers may be confronted with rental properties that lack written tenancy agreements. Lack of written tenancy agreements or agreements which do not strictly comply with the RTA typically arise in older buildings with long-term tenants. The RTA addresses these tenancies by providing that agreements entered into on or before January 1, 2004 may not be in writing, but the RTA will nonetheless import its standard terms into these agreements, ensuring every tenancy agreement in BC meets the RTA s content requirements. The current form and content requirements for tenancy agreements is set out in section 13 of the RTA, which states that all tenancy agreements must contain the following: the Standard Terms as set out in the Regulations (discussed later); the correct legal names of the landlord and tenant; the address of the rental unit; the date the tenancy agreement is entered into; the address for service and telephone number of the landlord or the landlord s agent; the agreed terms in respect of the following: the date the tenancy starts; the type of tenancy (periodic or fixed term): -- if periodic, whether it is on a weekly, monthly or other periodic basis; or -- if fixed term, the date the tenancy ends and whether the tenancy may continue as a periodic tenancy or for another fixed term; the amount of rent payable for a specified period, and, if the rent varies with the number of occupants, the amount by which it varies; the services and facilities included in the rent; and the amount of any deposits (e.g., security and pet damage deposits) and the date the deposit must be paid. Within 21 days after a landlord and tenant enter into a tenancy agreement, the landlord must give the tenant a copy of the agreement. The Regulations also require that tenancy agreements be no smaller than size 8 font or written so as to be easily read and understood by a reasonable person. Accordingly, property managers should not put any part of the tenancy agreement in fine print. Standard Terms Through the operation of the RTA, all residential tenancy agreements must contain the standard terms prescribed by the Act and the Regulations (the Standard Terms ). These terms are found in the Schedule to the Regulations. Property managers should familiarize themselves with these terms. Although too lengthy to be reproduced fully in this chapter, the Standard Terms cover: the Application of the RTA; management of deposits (pet damage and security); pets; condition inspections; rent; rent increases; assignments and sublets; repair and maintenance; occupants and guests; locks; access; ending the tenancy; and dispute resolution. standard terms terms found in the Schedule to the Residential Tenancy Regulations that all residential tenancy agreements must contain The RTB publishes a sample residential tenancy agreement for landlords and tenants which includes all of the standard terms. Many landlords and tenants will use a different agreement. In those circumstances,

13 10 Rental Property Management Licensing Course Manual property managers should take care to ensure that the content of the agreement used complies with the RTA and the Regulations. As mentioned above, there is no ability to opt out of the RTA (s. 5), and the Standard Terms are deemed to apply, regardless of whether the parties intended otherwise. Any efforts to circumvent the RTA will be invalid and unenforceable; and any Standard Term that is altered or removed will be restored. Implied and Additional Terms In addition to the Standard Terms, there are certain implied terms that are regarded as forming part of the residential tenancy, and as such, the tenancy agreement. These are terms that might not be expressly stated in the agreement, but that nonetheless apply. An example might be the right to quiet enjoyment of the rental property by the tenant, that is to say, the right to use the rental unit in a manner free implied terms from significant disturbances, interference, or unwarranted invasion of their privacy. terms that are not Another example of an implied term would be the obligation to pay rent, even if not expressly stated in an expressly stated on a tenancy agreement. These terms form part of the agreement agreement, but are deemed to form part of whether or not the tenancy agreement itself explicitly sets them out; without these the tenancy agreement implied terms, the contract would be lost (e.g., there must be a rental unit and rent under a rental agreement.) Further, the parties may choose to add additional terms. These are terms that are above and beyond what the RTA and other applicable laws require the tenancy agreement to include. Additional terms should be clearly flagged in the agreement in order to be distinguished from the Standard Terms. For example, landlords and property managers can identify Standard Terms in italicized font or by underlining them. Standard terms may also be added as an addendum to the residential tenancy agreement to which the parties agree. Common additional terms include storage and parking policies and charges, quiet hours, tenant insurance requirements, special fees (i.e., non-sufficient funds charges), tenant conduct rules, and occupancy maximums. Property managers should be alive to the issues of additional terms. Additional terms typically reflect the property owner s preferences and added protections for his or her property investment. Property managers should consider these as important indicators of their clients wishes. Being mindful of these factors will assist property managers in managing the expectations of their clients. However, property managers should take care to ensure that these additional terms do not breach other applicable laws related to privacy or human rights. Material Terms Material terms are terms that both parties agree are so important that any breach will give the other party the right to end the agreement, even prior to the end of a fixed term tenancy. Generally speaking, the obligation to pay rent is regarded as a material term that goes to the heart of the tenancy agreement. material terms terms that both parties agree are so important that the most trivial breach will give the other party the right to end the agreement, even prior to the end of a fixed tenancy A tenant s right to quiet enjoyment is also considered a material term of a residential tenancy agreement. The common practice across the industry is to clearly identify which terms are material in the agreement itself. The materiality of a term can be indicated by the landlord and tenant initialing next to the term, the parties actions, or by an express statement in the agreement itself (e.g., No smoking is permitted in the rental unit. This is a material term of this tenancy agreement. Any breach of this term will constitute immediate cause for termination of this agreement ). As a Rental Property Manager... If a material term is breached, you must act promptly and consistently in enforcing the term against a tenant in breach. This enforcement obligation applies regardless of how minor the infraction. The party alleging a breach should write to the other party immediately advising that: there is a problem; that problem is regarded by the party as a material breach of the tenancy agreement; the breach must be resolved by a specified date (the date must be reasonable); and if the breach is not resolved by the required date, the party will end the tenancy.

14 Residential Tenancies 11 In the event that an Arbitrator is faced with considering whether or not a term is material, he or she will look at the particular facts of the tenancy relationship. The Arbitrator will also look to the context of the term and its importance to the overall scheme of the tenancy agreement. For further information about material terms, see Policy Guideline #8. Colliers Macaulay Nicolls Inc. v. Wilkinson, 2012 BCSC 1253 In Colliers, the Court reviewed a RTB Arbitrator s decision, which dealt with the enforcement of a material term. The tenancy agreement included a no pets provision. One of the tenants in the building kept two finches in her rental unit. These birds were gifts that commemorated the passing of her mother, and as such, had significant sentimental value. The landlord sought to enforce the no pets provision as a material term. However, at the Hearing of the matter, the tenant was able to provide evidence that the property manager knew about the finches and had specifically approved two legged pets for her tenancy. The Arbitrator accepted the tenant s argument that the no pets provision could not be regarded as material because the landlord had acceded to the state of affairs and delayed enforcing the term against the tenant. As such, the tenant was allowed to keep her existing birds, as this exemption was grandfathered into her tenancy agreement. On judicial review, the Court agreed and concluded that the Arbitrator s decision was reasonable in the circumstances. The judicial review was dismissed, and the birds were permitted to remain at the rental property. Amendment Procedures A tenancy relationship may change over time and the changes can be reflected in the tenancy agreement itself. Section 14 of the RTA addresses changes to a tenancy agreement. Landlords and tenants may amend the tenancy agreement that governs their relationship. Those amendments must be agreed to by both parties and must be achieved in writing. However, certain changes to the tenancy relationship, such as a rental increase, termination or restriction of services, or a Director s Order, do not have to be agreed to by the parties, provided the changes are in accordance with the RTA. Landlords and tenants are not permitted to amend the tenancy agreement to opt out of the RTA or otherwise amend any standard terms as previously mentioned. Unenforceable Terms Section 6 of the RTA addresses the enforcement of rights and obligations of landlords and tenants. It notes that a term of a tenancy agreement is not enforceable if: the term is inconsistent with the Act or Regulations; the term is not expressed in a manner that clearly communicates the rights and obligations under it; or the term is unconscionable where one party takes advantage of the ignorance, need, or distress of a weaker party. See Chapter 8 (The Law of Contract) for a discussion on unconscionability. For more information, see Policy Guideline #8. Managing Deposits The RTA requires that residential tenancy agreements set out the amount of any security or pet damage deposit and the date on which those deposits must be paid. Deposits are a practical means of providing some added insurance for the landlord and property manager to address practical concerns about possible damage to their rental property. The law recognizes that a tenant s activities may result in damage to the rental unit. Accordingly, the RTA provides that the landlord and/or property manager may require a reasonable deposit as a condition of the tenancy agreement. These deposits are outlined in sections of the RTA and are explored in greater detail below. Security Deposit Section 17 of the RTA allows a landlord to require a security deposit as a condition of entering into a tenancy agreement. As this section contemplates the payment of a security deposit at the start of a tenancy relationship, the landlord is not permitted to seek payment of a deposit at a later date. As a result, property

15 12 Rental Property Management Licensing Course Manual managers should be careful to obtain payment of security deposits in a timely manner. Failure to do so may mean the loss of the opportunity to obtain a deposit at all. A security deposit must also comply with the RTA and the Regulations. The landlord is only permitted to require one security deposit per tenancy agreement. Under section 19 of the RTA, the maximum amount that a landlord can collect as a security deposit is one half of one month s rent. Although the landlord is not required to seek this maximum, best practices suggest that the full amount be sought, as its collection strengthens the security for the landlord in the event that the damage to the rental unit exceeds reasonable wear and tear. If a landlord accepts a deposit of an amount higher than the maximum permitted, the tenant is entitled to deduct the overcharge from the payment of rent and the landlord may forfeit his or her right to make a claim against the remaining deposit. For more information about security deposits, see Policy Guideline #29. Pet Damage Deposit In addition to the security deposit, landlords are permitted to collect pet damage deposits in appropriate circumstances. Clearly, this practice is only appropriate when the tenant has a pet, or acquires one during the tenancy. Landlords are not permitted to collect additional deposits if the tenant has more than one pet. The maximum amount a landlord is entitled to charge for a pet damage deposit is one half of one month s rent. This amount is in addition to any security deposit that may be required under the tenancy agreement. There are some exceptions to the collection of pet damage deposits. For example, landlords are not permitted to collect a pet damage deposit if the tenant s animal is a guide/service animal (section 18 of the RTA). Furthermore, unlike the RTA, the MHPTA does not permit a landlord to collect a pet damage deposit. For more information about pet damage deposits, see Policy Guideline #31. Other Deposits The Regulations set out additional fees that landlords are permitted to charge tenants. Refundable fees charged by landlord 6 (1) If a landlord provides a tenant with a key or other access device, the landlord may charge a fee that is (a) refundable upon return of the key or access device, and (b) no greater than the direct cost of replacing the key or access device. (2) A landlord must not charge a fee described in subsection (1) if the key or access device is the tenant s sole means of access to the residential property. Non-refundable fees charged by landlord 7 (1) A landlord may charge any of the following non-refundable fees: (a) direct cost of replacing keys or other access devices; (b) direct cost of additional keys or other access devices requested by the tenant; (c) a service fee charged by a financial institution to the landlord for the return of a tenant s cheque; (d) subject to subsection (2), an administration fee of not more than $25 for the return of a tenant s cheque by a financial institution or for late payment of rent; (e) subject to subsection (2), a fee that does not exceed the greater of $15 and 3% of the monthly rent for the tenant moving between rental units within the residential property, if the tenant requested the move; (f ) a move-in or move-out fee charged by a strata corporation to the landlord; (g) a fee for services or facilities requested by the tenant, if those services or facilities are not required to be provided under the tenancy agreement. (2) A landlord must not charge the fee described in paragraph (1)(d) or (e) unless the tenancy agreement provides for that fee. Although a landlord is free to collect these fees, other fees are prohibited from being collected. Pursuant to section 5 of the Regulations, landlords are not permitted to charge a fee for guests of the tenant, nor are they permitted to charge fees for the replacement of keys which are required because the landlord changed the locks. As mentioned previously, rental application fees are similarly prohibited. Property managers should keep a record of all deposits received and whether they are refundable or non-refundable.

16 Residential Tenancies 13 Move-In Condition Inspections Section 23 of the RTA specifies that the landlord and tenant must inspect the condition of the rental unit together on the day that the tenant is entitled to possession of the rental property or on another mutually agreed date. This is a mandatory provision. The inspection should be carried out before the tenant s possessions are moved into the rental unit. This vacant property inspection will give the landlord and tenant an unobstructed view of the entire rental unit. It also acts as a safeguard in the event that damage is caused during the move-in process. The landlord and tenant are required to complete a condition inspection report, and the landlord must provide the tenant a copy of the completed report for his or her records within seven days of the inspection. Opportunities to Participate in an Inspection The landlord is required to give a new tenant at least two opportunities to complete the inspection report. If the tenant is not available at the first time offered by the landlord, the tenant may propose an alternative time. If the landlord is not available, they must propose a second option to the tenant. This must be accomplished using the Notice of Final Opportunity to Schedule a Condition Inspection (#RTB-22). This is a mandatory form published by the RTB. If the tenant fails to participate in the condition inspection on either occasion offered by the landlord, the landlord will be entitled to retain the damage deposit, in accordance with section 24 of the RTA. On the other hand, if the landlord fails to complete the condition inspection report or does not provide the tenant with a copy within the timeline required by the RTA, the landlord will lose his or her right to claim against the deposit. Although the condition inspection process is required, the RTA does not impose a mandatory condition inspection form. Nevertheless, the Regulations provide certain requirements of a condition inspection and the associated report. A condition inspection report must include the standard information set out in section 20 of the Regulations. This information includes, but is not limited to: the parties legal names; the address of the rental unit; the date of the inspection; and a statement of the general condition of appliances, flooring, fixtures, electrical outlets, and each room in the rental unit. Landlords and tenants are free to use their own condition inspection reports, so long as the content conforms to these requirements. Any condition inspection report must be in writing, in type no smaller than size 8 font, and written in such a manner as it would be easily understood by a reasonable person. The RTB publishes a sample Move-In Condition Inspection Report that is frequently used by landlords and tenants. In addition to crafting the required written report, property managers may wish to take photographs in order to enhance the information obtained from the condition inspection. In the event that photographs are taken, they should be appended to the report and initialed by the tenant and the landlord to acknowledge the current and accurate depiction of the rental unit. If the parties use the sample RTB Move-In Condition Inspection Report, photos should be attached, numbered, signed, and dated by both the landlord and tenants. As a Rental Property Manager... A sample Move-in Condition Inspection Report can be found at: www2.gov.bc.ca/assets/gov/housing-and-tenancy/ residential-tenancies/forms/rtb27.pdf. You should ensure that the condition inspection report and photographs are reflective of the actual state of the leased premises. The condition inspection report will be useful in the future when assessing damage to the rental unit. Part 3 of the Regulations addresses condition inspections. Property managers should review these provisions prior to scheduling a condition inspection. In particular, it includes important requirements about the timing of the inspection and the contents of the condition inspection report. The condition inspection process is important and should not be overlooked. Inadequate condition inspections or improper or unauthorized completion of condition inspection reports could prevent the property owner from claiming against a deposit.

17 14 Rental Property Management Licensing Course Manual Recall from Chapter 2 (Professional Ethics) that engaging in contract negotiations, entering into contracts, and managing landlord and tenant matters are services that can only be performed by a licensee in conformity with the Real Estate Services Act. A condition inspection and the preparation of the associated report is an integral part of entering into a tenancy agreement. Accordingly, the inspection reports must be completed by a licensed property manager. The use of unlicensed agents is not appropriate. The Real Estate Council of British Columbia has received complaints in recent years that unlicensed persons are engaged in completing move-in or move-out condition inspection reports. Persons engaging in this unauthorized activity could be subject to a professional complaint before the Real Estate Council. Property managers must be mindful of these restrictions to ensure they do not compromise their client s ability to claim against a deposit in the future. Further, property managers must always be aware of their professional obligations to act in the best interests of their clients.! ALERT In one case, among other disciplinary issues, a managing broker permitted two unlicensed assistants to perform movein condition inspections and sign move-in condition inspection reports on two separate occasions. Consequently, the managing broker and the property management brokerage were disciplined for professional misconduct in providing rental property management services by a person who was not licensed. The managing broker and the property management company were ordered to pay a $2,500 penalty and $1,500 enforcement expense jointly and severally. (2015 CanLII (BC REC)) Deposit Return and Move-Out Condition Inspections When a residential tenancy ends, the property manager may be tasked with returning the security or pet damage deposit to the departing tenant. At the end of a tenancy, the landlord and tenant must inspect the condition of the rental unit. Like condition inspections conducted at the start of a tenancy, the landlord must provide the tenant with at least two opportunities to perform the end of tenancy condition inspection. If the tenant fails to participate, or otherwise abandons the rental unit, the landlord will be entitled to claim against a security and/or pet damage deposit, and the tenant s right to the deposit(s) is forfeited. At the end of the tenancy, the landlord must return the deposit(s) to the tenant. The return of the deposit(s) must include accrued interest as specified by the RTB. The deposit(s) must be returned within fifteen days of the later of: the end of the tenancy; or the date that the landlord receives the tenant s forwarding address (s. 38). As a Rental Property Manager... To assist landlords with this duty, the RTB has created an online calculator that allows landlords to determine the date by which they must return the deposit(s) or apply to keep them. This resource is available on the RTB s website: Further, the RTB s website includes a Deposit Interest Calculator resource to assist landlords and tenants with calculating the proper amount of interest to be remitted to the tenant. The Deposit Interest Calculation can be found at: Property managers should take care to ensure that the calculation of interest is accurate. If the landlord fails to return the deposit(s) and the accrued interest to the tenant within the deadline imposed by the RTA, the landlord is obligated to pay to the tenant double the amount of the deposit(s). In certain circumstances, the landlord may wish to claim against the security deposit and/or pet damage deposit, and may not want to remit all or part of the deposit to the outgoing tenant. If the landlord wants to keep the deposit, he/she must file for Dispute Resolution within 15 days. A landlord is permitted to keep all or part of a deposit only if: the tenant agrees in writing; an RTB Order authorizes the retention;

18 Residential Tenancies 15 the tenant failed to provide a forwarding address and a year has passed; or the tenant failed to participate in the condition inspection after two opportunities to do so were provided to him/her. Section 93 of the RTA provides that the obligations of a landlord under this Act with respect to a security deposit or a pet damage deposit run with the land or reversion. This means that a new landlord will still be obligated to return the security deposit, in the manner described above, even if they were not the landlord/ property owner at the time the tenancy commenced. For more information, see Policy Guideline #17. Rights and Obligations During the Residential Tenancy As noted above, a residential tenancy agreement is a contract that creates rights and corresponding obligations for both the landlord and tenant. The parties respective rights and obligations can flow from express terms of the agreement as well as the terms and protections implied or imposed by the RTA and other laws. The central obligations that arise from a residential tenancy are discussed below. Rent and Utilities The primary obligation imposed on a tenant by a residential tenancy agreement is the obligation to pay rent. Not surprisingly, the concept of paying rent is fundamental to the existence of a rental unit. The RTA includes definitions of both rental unit and rent, in section 1: rent means money paid or agreed to be paid, or value or a right given or agreed to be given, by or on behalf of a tenant to a landlord in return for the right to possess a rental unit, for the use of common areas and for services or facilities, but does not include any of the following: (a) a security deposit; (b) a pet damage deposit; rental unit means living accommodation rented or intended to be rented to a tenant Accordingly, rent does not include other deposits or fees that might be required, including security deposits, pet damage deposits, and other fees (refundable or non-refundable), such as a key fob deposits, or a move in/ out charges. Although a tenant may be obligated under the agreement to pay for such expenses, it does not constitute rent for the purposes of the RTA and the associated enforcement procedures. Section 26 of the RTA addresses the rules governing payment and non-payment of rent and will be discussed again in detail later in the chapter. Rules about payment and non-payment of rent 26 (1) A tenant must pay rent when it is due under the tenancy agreement, whether or not the landlord complies with this Act, the regulations or the tenancy agreement, unless the tenant has a right under this Act to deduct all or a portion of the rent. (2) A landlord must provide a tenant with a receipt for rent paid in cash. In accordance with this provision, a tenant is not allowed to withhold rent unless the RTA provides for a specific right to do so. The tenant must pay rent on the date when it is due, even if the landlord has breached the RTA in some other way. Receipts must be issued for cash payments. Section 26 also limits the actions that a landlord can take in the event that rent is not paid. Landlords are not allowed to unilaterally seize the personal property of the tenant or interfere with the tenant s access to his or her personal property. Although this concept, known as distress, is not available for residential tenancies, it is available for commercial tenancies and will be discussed later in this chapter. However, if the landlord has a court order authorizing the landlord to take the tenant s property, or if the tenant has abandoned the rental unit and the landlord has complied with Regulations, a landlord may still be able to seize the tenant s property. This is further discussed later in the chapter under Distress and Abandonment of Personal Property. Property managers should be mindful of these rent money paid or agreed to be paid by or on behalf of a tenant to a landlord in return for the right to possess a rental unit, for the use of common areas and for services or facilities, but does not include a security or pet damage deposit rental unit living accommodation rented or intended to be rented to a tenant

19 16 Rental Property Management Licensing Course Manual rules and requirements when accepting rental payments. Property managers must diligently adhere to the requirements in order to preserve the landlord s rights in the event that payment issues arise. In addition to the RTA s requirement that the tenant pay rent, it is also a term of the contract between the parties (i.e., the residential tenancy agreement). As discussed above, the Standard Terms apply to every residential tenancy agreement, and each agreement must set out the amount of rent payable and when rent is due (section 13 of the RTA). Repair and Maintenance As with the obligation to pay rent, a landlord s and tenant s duty to repair and maintain arises from the operation of the RTA, the Regulations, and the residential tenancy agreement between the parties. However property managers should also be mindful of other applicable statutes which impact the repair and maintenance of rental properties. These include the Occupiers Liability Act and the Negligence Act, both discussed in Chapter 7 (The Professional Liability of Real Estate Licensees), and the Human Rights Code, discussed in Chapter 14 (Human Rights Law). Klajch (Guardian ad litem of) v. Jongeneel, 2002 BCCA 14 In Klajch, the Court of Appeal considered a case involving allegations against a property manager for breach of the RTA and the Occupiers Liability Act. The case concerned an accident which injured the child of a tenant. The child grabbed hold of a heavy planter filled with soil to try to hoist himself up to see through a window. However, the planter dislodged and landed on top of him. Despite the fact that the planter had been left behind by previous tenants, the property manager was held liable for failing to repair and maintain the premises insofar as a dangerous item was left on the premises. This omission was also a breach of the Occupiers Liability Act as discussed in Chapter 7 (The Professional Liability of Real Estate Licensees). Statutory Obligations Section 32 of the RTA sets out the obligations on the landlord and tenant to repair and maintain the rental premises. Landlord and tenant obligations to repair and maintain 32 (1) A landlord must provide and maintain residential property in a state of decoration and repair that (a) complies with the health, safety and housing standards required by law, and (b) having regard to the age, character and location of the rental unit, makes it suitable for occupation by a tenant. (2) A tenant must maintain reasonable health, cleanliness and sanitary standards throughout the rental unit and the other residential property to which the tenant has access. (3) A tenant of a rental unit must repair damage to the rental unit or common areas that is caused by the actions or neglect of the tenant or a person permitted on the residential property by the tenant. (4) A tenant is not required to make repairs for reasonable wear and tear. (5) A landlord s obligations under subsection (1) (a) apply whether or not a tenant knew of a breach by the landlord of that subsection at the time of entering into the tenancy agreement. The landlord must ensure that the rental property adheres to applicable health, safety, and housing standards. The rental unit must be in reasonable and habitable state. This obligation applies equally to the rental unit itself and the common areas on the rental property to which the tenant is entitled access. The landlord s repair and maintenance obligations encompass: repairs of building elements; cosmetic maintenance; investigating and implementing regular pest control strategies; and periodic updates to appliances and other fixtures.

20 Residential Tenancies 17 As a Rental Property Manager... While a significant component of these repairs will be within the scope of the property manager s knowledge, issues will arise that require specialized personnel. Property managers should take care to recognize situations that exceed their skillset (i.e., significant plumbing repair, mould detection, fire and smoke damage, and building envelope issues). In those circumstances, property managers should seek out and follow the advice of certified professionals and notify their client when it is necessary to consult these representatives. A tenant s repair and maintenance obligations are outlined in Policy Guideline #1 and section 32 of the RTA. Examples of such obligations include maintaining the state of the rental unit by periodically cleaning carpets to maintain reasonable standards of cleanliness, cleaning the interior window panes, removing scuff marks from walls, ensuring smoke detectors are operational and/or advising the landlord if repair or replacement is necessary, and yard maintenance (if applicable). Policy Guidelines As referenced throughout this chapter, the RTB publishes a number of Policy Guidelines to assist Arbitrators and the public with interpreting the requirements of the RTA. Repair and maintenance obligations are also addressed in these Guidelines. These Guidelines include Policy Guideline #1, which provides commentary on obligations with regard to a variety of building features, including but not limited to: renovations and changes to the rental unit, carpets, internal window coverings, windows, major appliances, walls, painting, baseboards, smoke detectors, furnaces, light bulbs and fuses, telephones, and fences and fixtures. In addition, Policy Guideline #40 provides insight into the Useful Life of Building Elements. This Guideline comments on the expected life of various building components, including parking lots, fences, roofs, concrete, doors and windows, siding, and other miscellaneous items. Property managers should familiarize themselves with these Policy Guidelines and periodically review them while evaluating the age and potential need for repairs of the particular rental property. Services and Facilities In addition to the above, the landlord is obligated to maintain any services and/ or facilities provided to a tenant. These are defined in section 1: service or facility includes any of the following that are provided or agreed to be provided by the landlord to the tenant of a rental unit: appliances and furnishings; utilities and related services; cleaning and maintenance services; parking spaces and related facilities; cablevision facilities; laundry facilities; storage facilities; elevator; common recreational facilities; intercom systems; garbage facilities and related services; heating facilities or services; housekeeping services. It is important to note that the above list applies independently of the tenancy agreement. This means that, even if the above services or facilities are not expressly identified in the tenancy agreement, if the tenant is being provided with any of them during the tenancy, he or she may have a continued right to them. This implied obligation becomes especially significant when one considers the application of section 27 of the RTA, which addresses a landlord s right to terminate or restrict a service or facility. service or facility includes any of the following that are provided or agreed to be provided by the landlord to the tenant of a rental unit: appliances and furnishings; utilities and related services; cleaning and maintenance services; parking spaces and related facilities; cablevision facilities; laundry facilities; storage facilities; elevator; common recreational facilities; intercom systems; garbage facilities and related services; heating facilities or services; housekeeping services Section 27 states that a landlord can restrict or terminate a service or facility if that service or facility is not essential to the rental unit as living accommodation or a material term of the agreement. However, to do so, the landlord provide 30 days notice to the tenant and reduce the tenant s rent in an amount proportionate to the reduction in value of the tenancy as a result of the loss of the service or facility. The notice to the tenants must also be provided in the form required by the RTB which is available for download on the RTB website. In evaluating the appropriate reduction in rent from a restricted or terminated service or facility, landlords and property managers should consider: the duration of the period in which the tenant received the service or facility; whether a substitute is reasonably available;

21 18 Rental Property Management Licensing Course Manual the frequency of reliance by the tenant on that service or facility; the cost to the tenant of obtaining a comparable service or facility; and the rental costs of comparable units in the same geographic region which do not provide the service or facility in question. If the landlord does not reduce the rent in an appropriate amount, an Arbitrator hearing a dispute resolution matter may make an Order compensating the tenant in the form of past or future rent reductions. The tenant can also be compensated for loss or damage suffered as a result of a disruption in the provision of a service or facility resulting from the landlord s negligence or omissions. For more information on these compensation obligations, see Policy Guideline #22 which addresses the termination or restriction of a service or facility. Quiet Enjoyment As mentioned earlier, the tenant s right to the quiet enjoyment of the rental unit is protected. Quiet enjoyment is best understood as a bundle of rights protecting the tenant s home and their right to reasonable privacy, exclusive possession, and freedom from unreasonable disturbance. All residential tenancy agreements in BC include the standard terms as set out in the Schedule to the Regulations. This includes Standard Term #11 which states: Landlord s entry into rental unit 11 (1) For the duration of this tenancy agreement, the rental unit is the tenant s home and the tenant is entitled to quiet enjoyment, reasonable privacy, freedom from unreasonable disturbance, and exclusive use of the rental unit. The RTA also addresses the tenant s right to quiet enjoyment of their rental unit. This is captured by section 28: Protection of tenant s right to quiet enjoyment quiet enjoyment a tenant s right to reasonable privacy, exclusive possession and freedom from unreasonable disturbance 28 A tenant is entitled to quiet enjoyment including, but not limited to, rights to the following: (a) reasonable privacy; (b) freedom from unreasonable disturbance; (c) exclusive possession of the rental unit subject only to the landlord s right to enter the rental unit in accordance with section 29 [landlord s right to enter rental unit restricted]; (d) use of common areas for reasonable and lawful purposes, free from significant interference. The right to quiet enjoyment is significant and enjoys expansive protections. From the perspective of property managers, this means that they must be mindful of avoiding unreasonable interference in the tenant s affairs and rental unit. Failure to do so could expose the landlord and property manager to disputes. The law prohibits substantial interference with the tenant s quiet enjoyment of the rental property. The modern approach to the meaning of substantial interference acknowledges that ongoing and frequent interference can constitute a significant interference and thus, a breach of the tenant s rights. For example, this may include: repeated access requests to the rental unit in a short time span; an uncontrolled pest problem in the rental unit and the failure to retain pest control services; and unreasonable and ongoing noise. As a Rental Property Manager... The circumstances that might be regarded as substantial interference are varied. However, Policy Guideline #6 sets out a helpful list of circumstances that might meet the threshold of substantial interference: entering the rental premises frequently or without notice or permission; unreasonable and ongoing noise; persecution and intimidation; refusing the tenant access to parts of the rental premises; preventing the tenant from having guests without cause; intentionally removing or restricting services, or failing to pay bills so that services are cut off; forcing or coercing the tenant to sign an agreement that reduces the tenant s rights; or allowing the property to fall into disrepair so the tenant cannot safely continue to live there.

22 Residential Tenancies 19 In the event that the landlord or property manager is found to have breached the tenant s right to quiet enjoyment, the party in breach may be exposed to a claim for damages. The RTB will consider the reduction in value of the tenancy. The range of damages will depend on the particular facts of each tenancy and each breach. Ashurwin Holdings Ltd. v. British Columbia, 2012 BCSC 1408 In Ashurwin, the BC Supreme Court upheld an Arbitrator s decision to award damages of $700 to a tenant for interference of his right to quiet enjoyment. The issues arose from prolonged renovations to the rental building undertaken by the landlord. The tenant complained of dust, noise, and vibrations caused by the tools. He alleged this constituted a breach of his right to quiet enjoyment. He claimed $4,800 in compensation, of which he was awarded $700. The award was upheld on judicial review. The Court concluded that the award was reasonable for the severe disruptions faced by the tenant and appropriate compensation for the degree of disturbance he faced. Property managers should be mindful of the risk of monetary exposure resulting from disruptions of this kind. As demonstrated by this case, even a landlord s lawful activities can generate a compensation award for lost quiet enjoyment at the rental property. Although there are potential monetary consequences arising from these issues, it must be noted that a tenant may not refuse to pay rent when alleging a breach of the right to quiet enjoyment. Failure to pay the rent in full and on time is a breach of the tenant s rental obligations under the RTA, regardless of whether the tenant s right to quiet enjoyment has been compromised. The law also recognizes that landlords, in connection with their obligations to repair and maintain, may be required to undertake repairs and renovations that cause a certain amount of disruption to tenants. Major building repairs, re-plumbing, renovations, and elevator repair are just a few examples of building improvements that would likely inconvenience tenants living in the particular building. As a Rental Property Manager... Property managers and landlords should endeavour to minimize the disruption to tenants. Property managers should keep in mind the following points: 1. It is prudent when undertaking projects of this magnitude to clearly communicate with tenants about what to expect and provide generous notice of upcoming anticipated repair disruptions. Property managers should also solicit feedback from tenants or provide some opportunity for them to do so. Allowing tenants to participate in the planning process or offering them opportunities to make inquiries and learn more about the project is advisable and helps to offset claims for breaches of quiet enjoyment. 2. If faced with a complaint alleging breach of quiet enjoyment, property managers should be proactive in investigating the issues and reporting matters to their clients. Proper documentation of all steps taken by the property manager will be integral to maintaining the file in the event the matter proceeds to dispute resolution. All correspondence should be retained and stored in a secure location. Although the appropriate steps will depend on the circumstances, property managers should consider creative solutions to the problems and should be proactive about speaking to other tenants if the complaint arises from the activities of neighbouring tenants. However, in approaching possible problem neighbours, property managers should consider the privacy interests of the tenant who issued the complaint. For more information about tenants and privacy, see Chapter 15 (Protection of Personal Information. Smoking The use of tobacco products is a highly contentious issue in today s health-conscious world. Tenants and landlords are both responsible for ensuring that the right to quiet enjoyment of all tenants in a rental building are protected. One issue that arises frequently relates to second-hand smoke. Tenants must ensure that their personal behaviours do not unreasonably interfere with other tenants and their enjoyment of their homes, and property managers should remain mindful of this potential issue. If there are designated smoking areas on a rental property, property managers should be vigilant to ensure they are being used appropriately. If smoking is not permitted in common areas, that fact should be clearly communicated to all

23 20 Rental Property Management Licensing Course Manual tenants at the outset of the tenancy and, in particular, in the tenancy agreement and rental advertisements. Notices should also be posted in the common areas of the rental property. In the event a property owner or landlord wishes to maintain smoke-free premises, that expectation should be included in the residential tenancy agreement as an additional or material term, in addition to being referenced in the rental advertisement. Lawrence v. Kavah, 2010 BCSC 1403 In Lawrence, the Court was faced with a judicial review of a decision of a RTB Arbitrator that addressed the enforceability of a no smoking term of a tenancy agreement. The tenant provided evidence that she selected the building because the landlord advertised the building as one that was no smoking and no pets. Notwithstanding these assurances, the tenancy agreement itself did not include any such provisions regarding smoking on the rental property. Shortly after commencing occupancy at the rental unit, the tenant smelled cigarette smoke emanating from a downstairs unit. The inhabitants of that unit were long standing tenants who had no no smoking provisions in their tenancy agreement. The landlord s efforts to resolve the dispute were not fruitful. As a result, the tenant terminated her tenancy early, approximately ten months before the end of the fixed term tenancy. The basis for her decisions was the potential for adverse health consequences for the tenant and her children. The RTB Arbitrator awarded the landlord damages for breach of contract resulting from the termination. On judicial review, the tenant argued the decision was patently unreasonable. The Court agreed with the tenant on the basis that the tenant s right to quiet enjoyment could have been breached by the exposure to second-hand smoke. The Court further noted that second-hand smoke could constitute an unreasonable interference with the tenant s use of the rental property and that the rental property was advertised to the tenant with the expectation that this interference would not be present. In the end, the Court set aside the Arbitrator s decision and remitted the matter back to the RTB for another hearing. Rent Increases The value of property changes over time. This phenomenon is not at all uncommon in BC. As such, the law recognizes that, from time to time, it is appropriate that the amount of rent payable for a rental unit be adjusted to reflect market realities as well as increased operating expenses. Sections of the RTA address permissible and prohibited rent increases. Landlords are not permitted to raise rents except in accordance with the provisions of the RTA, unless an Order is obtained from the RTB authorizing a rental increase. By default, the RTA allows landlords to increase the rent once every 12 months in an amount up to the maximum percentage amount permitted under the inflation rate the 12-month average percentage change in the all-items Consumer Price Index for BC ending in the July that is most recently available for the calendar year for which a rent increase takes effect Regulations, which is the inflation rate + 2 % (Regulations, s. 22). The inflation rate is defined as follows: inflation rate means the 12 month average percent change in the all-items Consumer Price Index for British Columbia ending in the July that is most recently available for the calendar year for which a rent increase takes effect. The allowable percentage rate increase for each calendar year is published on the RTB website in August of the preceding year. This publication coincides with the date on which the Consumer Price Index becomes available and can be found at: www2.gov.bc. ca/gov/content/housing-tenancy/residential-tenancies/during-a-tenancy/rent-increases. As a Rental Property Manager... Property managers should be mindful of these rent increase limits. As the RTA prohibits rent increases in excess of the percentage amount, landlords and property managers are not entitled to round up to an even number. As a result, property managers should mind their cents and round down to stay within the limits allowed. The RTB publishes a helpful calculator on its website to assist landlords and property managers calculate the appropriate and allowable annual rent increase.

24 Residential Tenancies 21 Additional Rent Increases In addition to having maximum rent increase provisions, the RTA contemplates ways in which landlords may apply for an additional rent increase above these maximums. This Application proceeds before an Arbitrator, similar to an Application for Dispute Resolution. The circumstances in which a landlord may seek the RTB s approval to implement a higher than usual rent increase is set out in section 23 of the Regulations: (a) after the rent increase allowed under section 22 [annual rent increase], the rent for the rental unit is significantly lower than the rent payable for other rental units that are similar to, and in the same geographic area as, the rental unit; (b) the landlord has completed significant repairs or renovations to the residential property in which the rental unit is located that (i) could not have been foreseen under reasonable circumstances, and (ii) will not recur within a time period that is reasonable for the repair or renovation; (c) the landlord has incurred a financial loss from an extraordinary increase in the operating expenses of the residential property; (d) the landlord, acting reasonably, has incurred a financial loss for the financing costs of purchasing the residential property, if the financing costs could not have been foreseen under reasonable circumstances; (e) the landlord, as a tenant, has received an additional rent increase under this section for the same rental unit. If the landlord wishes to apply for an additional rent increase, this must be done by completing the Application for Additional Rent Increase, Form #RTB-16. The Application must be served on all of the affected tenants within 3 days, and tenants are invited to oppose the rent increase, file their own evidence, and attend the rent increase hearing, following which a Decision will be given. This Application should be accompanied by all materials identified in section 23 of the Regulations, including but not limited to the rental history for the property, proof of any material changes, any RTB decision about the property in the preceding 12 months, and information about any changes to services or facilities in the preceding 12 months. More details on the process will be discussed later. At the end of the hearing process, the RTB Arbitrator can do one of the following things: grant the Application in whole or in part; dismiss the Application; order that the granted increase be phased over time; order that the effective date of the increase is conditional on the landlord s compliance with an Arbitrator s order respecting the rental property. Like any other decision of the RTB, these decisions are open to judicial review by the BC Supreme Court within 60 days from receiving the decision. This means that even when a landlord succeeds in overcoming the high hurdles involved with obtaining an additional rent increase, the Court can still intervene to assess the reasonableness of the Arbitrator s decision. Ultimately, the landlord may still be required to appear before the Court to defend the validity of the decision. This possibility is certainly something to consider with disgruntled tenants, who may be motivated to unreasonably pursue these judicial reviews. The RTB Hearing and judicial review processes are discussed in greater detail below. If the landlord is applying for an additional rent increase pursuant to paragraphs (b), (c), and (d) of section 23, then the landlord must bring a single application to increase the rent for all rental units in the residential property by an equal percentage. For more information, see Policy Guideline #37. Rent Increases with Fixed Term Tenancies While the RTA provisions relating to rent increases only permit landlords to increase the rent by the inflation rate + 2% (unless a landlord s application to the RTB for a higher amount is accepted, or unless the tenant makes a written agreement to a higher rent increase), this provision does not apply with certain fixed term tenancies. If the tenancy agreement provides that the tenant must vacate the premises at the end of a fixed term (rather than rolling over into a month-to-month tenancy), the tenancy relationship terminates on the expiry of the fixed term. Therefore, the landlord is at liberty to present the tenant with an entirely new tenancy agreement to sign, including rent at any amount and any other term additions or modifications the landlord desires. The RTA allows for this; however, section 42(1) states that this cannot be done more frequently than once every 12 months. The utilization of this strategy by landlords as a means of avoiding

25 22 Rental Property Management Licensing Course Manual the rental increase limits in the RTA have been met with public criticism and media attention; therefore, a landlord should carefully consider this business risk. In addition, caution should be taken when negotiating an above-maximum rent increase with tenants, as the RTA prohibits landlords from attempting to contract out of its restrictions. When negotiating a higher than maximum rent increase with a tenant, a landlord should be prepared to justify the requested amount in accordance with the RTA s allowances for additional rent increases. Material Terms Material terms form part of the rights and obligations during the residential tenancy and were discussed earlier in the chapter. Distress and Abandonment of Personal Property Under the common law, there exists a self-help remedy for landlords that allows landlords to hold the goods of a tenant, which are found on leased premises, as a form of security for rental arrears (i.e., overdue amounts). Distress is generally the only means through which a landlord is entitled to hold the goods of his or her tenant, and it arises from the non-payment of rent. However, while this right continues in BC with respect to commercial tenancies (see Chapters 12 (Commercial Tenancies: Introduction) and 13 (The Commercial Lease)), it has been abolished with respect to residential tenancies by section 26 of the RTA: Rules about payment and non-payment of rent 26 distress a self-help remedy for landlords to hold the goods of a tenant that are found on leased premises as a form of security for rental arrears (3) Whether or not a tenant pays rent in accordance with the tenancy agreement, a landlord must not (a) seize any personal property of the tenant, or (b) prevent or interfere with the tenant s access to the tenant s personal property. (4) Subsection (3) (a) does not apply if (a) the landlord has a court order authorizing the action, or (b) the tenant has abandoned the rental unit and the landlord complies with the regulations. Accordingly, under no circumstances are property managers and/or landlords entitled to seize the personal property of a tenant as security in response to the non-payment of rent. That being said, the RTA provides certain parameters for landlords to retain the abandoned personal property of a tenant. However, personal property must be seized and disposed of in strict compliance with sections of the Regulations. Pursuant to section 24 of the Regulations, a landlord may consider that a tenant has abandoned personal property if the tenant leaves personal property on the residential premises: after the tenancy agreement has ended and the tenant has vacated the premises; or where the tenant has expressly notified the landlord that the tenant will not be returning or where the tenant cannot reasonably be expected to return to the residential premises. In addition, the tenant must have either: removed susbstantially all of his or her property; or has not paid rent and has not been ordinarily occupying the premises for one continuous month. If the landlord and tenant have made an express agreement respecting the storage of the personal property, the landlord may not remove the personal property. According to sections of the Regulations, landlords are permitted to retain the abandoned personal property of tenants. Once these items are removed, they must be stored for a period of at least 60 days unless it is reasonable to conclude that: the property has a total market value of less than $500; the cost of removing, storing and selling the property would be more than the sale proceeds; or storing the property would be unsanitary or unsafe.

26 Residential Tenancies 23 Section 25 also states that landlords must also keep a written inventory of the personal property, keep particulars of the disposition for two years following the date of disposition, and advise a tenant or tenant s representative that the property is stored or has been disposed of. As a Rental Property Manager... When intending to dispose of a tenant s personal property, property managers and landlords must: provide the tenant, or any other person with an interest over the property, with 30 days notice of the disposition; ensure the notice conforms to the requirements of section 27 of the Regulations (e.g., notice must contain the tenant s name, a description of the tenant s personal property to be sold etc. and be published in a newspaper in the area that the residential property is situated); and prepare a detailed written inventory of all abandoned property and a written record of how each piece of property is disposed of, which must be kept for a minimum of two years after the property is disposed of. Ultimately, the landlord may dispose of the abandoned personal property and retain the proceeds to reimburse them for their reasonable costs of removing, storing, and advertising the property for sale. The monies may also be applied to satisfy any outstanding amounts payable by the tenant under the RTA or the tenancy agreement. In the event that property managers are faced with circumstances involving abandoned property, property managers should ensure that they follow the timelines and notice requirements imposed by the RTA and the Regulations. Right to Assign/Sublet Assignment of tenancies and subletting are relatively common phenomena in today s world. Assignment describes the circumstances in which the tenant finds a new person to take over the existing tenancy agreement between the parties. In effect, the new tenant steps into the shoes of the old tenant and assumes their rights and responsibilities under the agreement. By contrast, subletting occurs when the tenant allows someone (i.e., the subtenant) to live in their rental unit, and that person assumes responsibility to pay rent for some, or all, of the term of the tenancy agreement. The original tenant takes on the role of landlord of the subtenant. In circumstances where sublets are allowed, the subletting tenancy agreement cannot contradict the original residential tenancy agreement. However, specific rules which curtail the ability of tenants to assign or sublet their rental units are imposed by section 34 of the RTA. Assignment and subletting assignment of tenancy a tenant finds a new person to take over the existing tenancy agreement between the parties subletting a tenant allows someone (i.e., a subtenant) to live in their rental unit and the subtenant assumes responsibility to pay rent for some, or all, of the term of the tenancy agreement 34 (1) Unless the landlord consents in writing, a tenant must not assign a tenancy agreement or sublet a rental unit. (2) If a fixed term tenancy agreement is for 6 months or more, the landlord must not unreasonably withhold the consent required under subsection (1). (3) A landlord must not charge a tenant anything for considering, investigating or consenting to an assignment or sublease under this section. Accordingly, a tenant may only sublet or assign a tenancy if they have the landlord s prior written permission or if they obtain an Order from the RTB allowing them to do so. Notably, if a tenant assigns their tenancy agreement or sublets their rental unit without having first obtained the landlord s consent, the landlord will be entitled to serve a One Month Notice to End Tenancy, pursuant to section 47(1)(i) of the RTA, which could ultimately end the tenancy. This Notice will be explored later on in this chapter. Despite this, the landlord is not entitled to withhold unreasonably the consent when faced with a tenant s request to assign or sublet a fixed term tenancy agreement of 6 months or more. For more information about assignment and subletting, see Policy Guideline #19.

27 24 Rental Property Management Licensing Course Manual Duty to Mitigate As noted above, in certain circumstances, incidents will arise which cause damage to the rental property, or interfere with the tenant s enjoyment of his or her rental suite. Sometimes this will result in a dispute whereby the landlord or tenant seeks damages against the other party related to an alleged breach of the RTA or a term of the tenancy agreement. In such circumstances, the party seeking damages has a duty known as a duty to mitigate. The duty to mitigate is outlined in section 7 of the RTA: Liability for not complying with this Act or a tenancy agreement 7 (1) If a landlord or tenant does not comply with this Act, the regulations or their tenancy agreement, the non-complying landlord or tenant must compensate the other for damage or loss that results. (2) A landlord or tenant who claims compensation for damage or loss that results from the other s non-compliance with this Act, the regulations or their tenancy agreement must do whatever is reasonable to minimize the damage or loss. As set out in the RTA, the duty to mitigate means that the party claiming compensation duty to mitigate must do whatever is reasonable to minimize his or her loss or damage. For example, the party claiming if the tenant discovers a flood, the tenant must take reasonable steps to remove his or compensation must do whatever is reasonable to her belongings and dry them to avoid ongoing damage. Similarly, a tenant must report minimize his or her loss matters promptly to the landlord or rental property manager. or damage Landlords also have a duty to minimize losses. If the landlord is claiming for loss of rental income, he or she must make reasonable efforts to re-rent the property in question. This obligation includes taking reasonable steps to locate a suitable new tenant and facilitate the move into the rental unit. Failure to act reasonably and take the appropriate steps in response to situations like this will hurt the party s ability to seek damages. What is reasonable will depend on the circumstances of any given situation. For landlords and tenants alike, it is a good practice to retain receipts and document efforts to address problems and damages of this nature. For more information about the responsibility of landlords and tenants to mitigate their damages, see Policy Guideline #5. Ending a Residential Tenancy Residential tenancies can come to an end for a variety of reasons. People marry and start families and need larger spaces. Students move on to new schools and new jobs. Some tenancies last for significant spans of time, even decades, while others contemplate an early end date. A landlord who has been abroad for several years may wish to return and occupy his or her property that is being rented. Of course, there are also circumstances in which the landlord or tenant simply wants the tenancy to come to an end. Section 44 of the RTA addresses the conclusion of a tenancy: How a tenancy ends 44 (1) A tenancy ends only if one or more of the following applies: (a) the tenant or landlord gives notice to end the tenancy in accordance with one of the following: (i) section 45 [tenant s notice]; (ii) section 46 [landlord s notice: non-payment of rent]; (iii) section 47 [landlord s notice: cause]; (iv) section 48 [landlord s notice: end of employment]; (v) section 49 [landlord s notice: landlord s use of property]; (vi) section 49.1 [landlord s notice: tenant ceases to qualify]; (vii) section 50 [tenant may end tenancy early]; (b) the tenancy agreement is a fixed term tenancy agreement that provides that the tenant will vacate the rental unit on the date specified as the end of the tenancy; (c) the landlord and tenant agree in writing to end the tenancy; (d) the tenant vacates or abandons the rental unit; (e) the tenancy agreement is frustrated; (f ) the director orders that the tenancy is ended. (2) [Repealed ] (3) If, on the date specified as the end of a fixed term tenancy agreement that does not require the tenant to vacate the rental unit on that date, the landlord and tenant have not entered into a new tenancy agreement, the landlord and tenant are deemed to have renewed the tenancy agreement as a month to month tenancy on the same terms.

28 Residential Tenancies 25 The many ways in which a tenancy can come to an end are discussed in further detail below. Fixed Term Tenancy A fixed term tenancy is a tenancy with a pre-determined expiry date. A fixed term tenancy may end upon the date on which the tenant is required to vacate the rental unit, as set out in the residential tenancy agreement. In the event that a vacancy date is not set out, the law presumes that the tenancy continues as a month-tomonth tenancy on the same terms. Mutual Agreement to End Tenancy A Mutual Agreement to End Tenancy is an agreement in which the tenant and landlord voluntarily, and mutually, agree to terminate the residential tenancy at a different date than that which is specified in the residential tenancy agreement. These agreements effectively cancel the residential tenancy agreement, and so they must be in writing, signed, and dated by the tenant and the landlord (or their agent). The move-out date and time must be clearly stated in the agreement. If the rental unit in question is occupied by more than one individual, all tenants should sign the same document evidencing their agreement to end the tenancy early. All parties to the agreement should be provided with a copy of the fully executed agreement for their records. A sample Mutual Agreement to End Tenancy is published by the RTB and is available as a resource for landlords and tenants; however, it is not a mandatory form. The sample form can be a good starting point for landlords and tenants to modify. As the sample provided by the RTB does not cover other agreements that the parties may reach (i.e., dealing with monies owing), parties may wish to add additional terms or modify the agreement to suit their circumstances. These additional agreements are acceptable so long as they do not conflict with the RTA or other applicable laws. A Mutual Agreement to End Tenancy can be made at any point during the eviction and enforcement process. The Mutual Agreement to End Tenancy may be entered into at the time of the first instance of late or unpaid rent, later in the eviction process, or even at a hearing before the RTB. It is important to bear this early termination option in mind, as the Mutual Agreement to End Tenancy might become an attractive and pragmatic option as the dispute resolution process unfolds. Tenant s Notice to End Tenancy Tenants are entitled to give notice to end their residential tenancy. Section 45 of the RTA addresses the tenant s notice, and it reads as follows: Tenant s notice mutual agreement to end tenancy an agreement in which the tenant and landlord voluntarily, and mutually, agree to terminate the residential tenancy at a different date than that which is specified in the residential tenancy agreement 45 (1) A tenant may end a periodic tenancy by giving the landlord notice to end the tenancy effective on a date that (a) is not earlier than one month after the date the landlord receives the notice, and (b) is the day before the day in the month, or in the other period on which the tenancy is based, that rent is payable under the tenancy agreement. (2) A tenant may end a fixed term tenancy by giving the landlord notice to end the tenancy effective on a date that (a) is not earlier than one month after the date the landlord receives the notice, (b) is not earlier than the date specified in the tenancy agreement as the end of the tenancy, and (c) is the day before the day in the month, or in the other period on which the tenancy is based, that rent is payable under the tenancy agreement. (3) If a landlord has failed to comply with a material term of the tenancy agreement or, in relation to an assisted or supported living tenancy, of the service agreement, and has not corrected the situation within a reasonable period after the tenant gives written notice of the failure, the tenant may end the tenancy effective on a date that is after the date the landlord receives the notice. (4) A notice to end a tenancy given under this section must comply with section 52 [form and content of notice to end tenancy].

29 26 Rental Property Management Licensing Course Manual Although there is no mandatory standard form published by the RTB, a tenant must provide his or her notice to end tenancy in writing. The notice must include: the tenant s name; the date; the address of the rental unit; the date on which the tenant will depart; and the tenant s signature. As noted above, when the tenancy is a month-to-month tenancy, the tenant must give at least one month s notice and it must be provided before the day the rent is due. Tenants must pay the full amount of rent due for their last month in the rental unit, unless the parties agree otherwise. This is true even if the tenant elects to leave the rental unit before the end of the month. Tenants are not permitted to unilaterally terminate a fixed term tenancy agreement early, absent the landlord s written agreement or an Order from the RTB. Landlord s Notice to End Tenancy There may be many different reasons why a landlord seeks to end a tenancy. These are listed in sections of the RTA: section 46 addresses ending a tenancy for non-payment of rent; section 47 addresses ending a tenancy for cause; section 48 addresses the circumstances in which the landlord may terminate a tenancy upon the conclusion of an employee-occupant s employment with the landlord; section 49 addresses the circumstances in which a landlord may terminate the tenancy in order to use the property in question for him or herself; and section 49.1 addresses circumstances in which tenants cease to qualify for the rental unit, which typically involves subsidized housing. In each of the foregoing scenarios, the RTA governs how the tenancy can come to an end and how and when the landlord must provide notice to the affected tenants. These early terminations include the 10 Day Notice to End Tenancy, the 1 Month Notice to End Tenancy, and the 2 Month Notice to End Tenancy. 10 Day Notice The 10 Day Notice to End Tenancy for Unpaid Rent or Utilities is a two page form available on the RTB s website. Apart from a Mutual Agreement to End Tenancy, it provides the shortest turnaround time between service and the conclusion of the tenancy. As the name would suggest, it provides the tenant with 10 days notice. It is appropriate where the tenant has failed to pay rent in full and on time, as required under the tenancy agreement. This eviction notice is governed by section 46, which reads as follows: Landlord s notice: non-payment of rent 46 (1) A landlord may end a tenancy if rent is unpaid on any day after the day it is due, by giving notice to end the tenancy effective on a date that is not earlier than 10 days after the date the tenant receives the notice. (2) A notice under this section must comply with section 52 [form and content of notice to end tenancy]. 10 day notice to end tenancy for unpaid rent or utilities a form that provides a tenant with 10 days notice to terminate the residential tenancy where the tenant has failed to pay rent in full and on time (3) A notice under this section has no effect if the amount of rent that is unpaid is an amount the tenant is permitted under this Act to deduct from rent. (4) Within 5 days after receiving a notice under this section, the tenant may (a) pay the overdue rent, in which case the notice has no effect, or (b) dispute the notice by making an application for dispute resolution. (5) If a tenant who has received a notice under this section does not pay the rent or make an application for dispute resolution in accordance with subsection (4), the tenant (a) is conclusively presumed to have accepted that the tenancy ends on the effective date of the notice, and (b) must vacate the rental unit to which the notice relates by that date. (6) If (a) a tenancy agreement requires the tenant to pay utility charges to the landlord, and (b) the utility charges are unpaid more than 30 days after the tenant is given a written demand for payment of them, the landlord may treat the unpaid utility charges as unpaid rent and may give notice under this section.

30 Residential Tenancies 27 As noted above, the tenant s obligation to pay rent, in full, and on time, is regarded as a material term of the tenancy agreement. You will recall that material terms are regarded as so central to the agreement, that a breach is regarded as a basis to end the entire tenancy. The 10 Day Notice to End Tenancy can be issued at any point after the rent has come due and remains unpaid. Partial payment is not sufficient to avoid these consequences. In the event that partial payment is received after serving a 10 Day Notice to End Tenancy, the property manager should issue a Use and Occupancy Receipt. Recall that landlords and property managers need to act quickly and consistently when dealing with a breach of a material term. A 10 Day Notice to End Tenancy should be issued promptly upon a failure to pay rent. As a Rental Property Manager... When tenants make partial payments towards the rent or seek to pay the full amount of the rent after a Notice to End Tenancy has been issued, property managers should be mindful to issue Use and Occupancy Receipts in order to preserve the landlord s right to follow through with eviction. If these monies are accepted without reservation, it is likely that the residential tenancy will be reinstated. The Use and Occupancy Receipt is a document that makes it clear that the monies are being accepted for use and occupancy only and will not reinstate the tenancy or waive the eviction notice already served on the tenant(s). The document should clearly set out: the date; the address of the subject property; the name(s) of the tenant(s); the method of delivery; acknowledgement of the date the monies were received; and the payment amount. The tenant should be advised that the monies are being accepted for use and occupancy only and that the residential tenancy has not been reinstated by the payment. Further, the tenant should be advised that the monies do not cancel or nullify the Notice to End Tenancy which was served upon them previously. A copy of this letter should be retained by the landlord and/or property manager, and can be valuable evidence at a Hearing before the RTB should a tenant argue that a partial or full rental payment made after the tenant received the eviction notice reinstated their tenancy. FIGURE 10.3: Issuing a 10 Day Notice to End Tenancy Tenant pays outstanding rent within 5 days Tenancy reinstated Landlord issues breach letter Landlord accepts money without reservation Tenancy reinstated Tenant makes partial payment Rent is due and unpaid Landlord serves 10 Day Notice to End Tenancy Landlord issues Use and Occupancy receipt Eviction continues Tenant files Application for Dipute Resolution within 5 days Dispute Resolution process at RTB (Ch 11) Tenant does not respond within 5 days Tenancy pressured to end Landlord can apply for an order of Posession and Monetary Order through Direct Request or Dispute Resolutions (Ch 11)