VICTORIA (NEWS 1130) – BC’s housing minister is taking another step to close a loophole that has allowed landlords to bypass annual rent controls by flipping tenants and imposing large rent hikes between leases.
The province has introduced legislation which would restrict when a landlord could use a vacate clause in a fixed-term tenancy agreement to certain circumstances and would limit the amount the rent could be raised between fixed-term agreements with the same tenant to two per cent plus inflation.
The changes to the Residential Tenancy Act will protect the rights of renters, “who have for too long been left open to unfair rent increases and housing instability,” according to Housing Minister Selina Robinson.
“Renters will no longer have to live in fear about what the next rent hike might look like,” she said. “This will give renters the security they deserve and help bring integrity to the rental industry, which is good for landlords.”
The current act allows landlords to impose a vacate clause on leases, forcing renters to either move out or face rate hike that exceed rent control allowances.
David Hutniak, chief executive officer for Landlord BC, says his organization has condemned abuse of vacate clauses and fixed-term agreements, and the proposed changes would prevent bad landlords from taking advantage of renters. “We have said, on more than one occasion, that landlords who are abusing this form of tenancy are damaging our industry and really their behaviour is unfair to responsible and professional landlords.”
Andrew Sakamoto with the Tenants Resources Advisory Centre says it’s about time the rules were changes. “Not all landlords, but many landlords, have used vacate clauses to further tip the power and balance in their favour and we are extremely pleased that the provincial government has decided to close this harmful loophole.”
The law, according to Robinson, would also streamline the dispute resolution process for the return of security and pet deposits and would mean tenants would not have to wait months to get their money back.
“I think it’s the correct move on the part of the government to stop it in its tracks. There are always going to be a few who try to exploit the system, this is nothing new and it’s just a way of making things right for the tenants,” commercial real estate agent Dave Goodman said.
Landlords should not face any adverse effects, even as property taxes continue to increase, according to Goodman. “Rents have the ability to go up four per cent next year. I would say that should cover any increase in cost, and at the same time, if a tenant leaves, the landlord of course has the right to rent out at the new market price,” he pointed out.
If the legislation is approved, which will likely happen in November, the law would nullify many vacate clauses in current fixed-term leases, even if the contracts were signed months ago.