Fixed Term Tenancies

Recently I was watching a video about rental and how the government has killed the market. A number of issues were raised including changes in 2017 to the fixed term rental agreement. 

In December of 2017 the BC government changed the fixed term lease agreement requirements. Prior to this time a landlord and tenant could enter into a fixed term tenancy agreement with the agreement requiring the tenant vacate the rental unit at the end of the fixed term. If the tenants vacated the unit a landlord was free to re-rent the property to a new tenant at the current market rent. 

This created a market where landlords would sign a one year agreement with a tenant and at the end of the agreement landlords would force tenants to sign a new agreement at a significantly higher rental rate. This put all the power in the landlords hands determining rental rates in the market. Tenants were in the position of having to move regularly creating unstable housing for renters. 

For the above reasons the BC Government changed the law around fixed term tenancies. What changed? Two things changed affecting the fixed term agreements. 

Now at the start of the tenancy a landlord must indicate on the agreement if they or a close family member are going to move into the unit at the end of the fixed term. If they indicate they are not going to move in then the agreement automatically becomes a month to month agreement at the end of the fixed term. Requiring the landlord or a family member to move in eliminated purpose built rental properties from evicting tenants at the end of a fixed term rental agreement.  

Why were these changes made? As mentioned the landlord held all the power in the negotiations between the two parties. Some landlords would purposely rent just below market conditions to secure a tenant and then after the fixed term increase the rent by 25 - 75% or more. As mentioned this made it difficult for tenants to find affordable housing for long periods of time. The BC Government listened to tenants complaining that housing was difficult when every year you had to move to find a new place you could afford. They elected to change the rules regarding fixed term tenancies. Requiring the agreement to convert to a month to month agreement provided stability for tenants for longer term housing.

After this change was made many landlords found loop holes as they do to circumvent this rule. Landlords would indicate they were going to move in as per the requirements and then re-rent the property shortly after the tenants moved out. Even for month to month tenancies landlords were giving notice to evict tenants for family use and not moving into the property. 

Due to these actions the BC government would later add punitive damages to the eviction process for wrongfully evicting a tenant for family use. These situations were exacerbated during covid with rent increasing rapidly and landlords trying to take advantage of the issue the government increased the punitive damages.    

There are many reasons that one could suggest why this action was taken. For many years Canada, BC and the lower mainland had restricted the number of purpose built rental properties developed. In 2010 the Strata Property Act was changed requiring all new properties identify how long a strata lot can be a rental property. New developments quickly changed to identify new strata lots for periods of time in excess of 100 years. This created a two tier system with the majority of properties purchased after 2010 entering the rental market as investor owned units. By 2017 the number of strata lots rented increased dramatically in the Vanouver market. This created a large numer of landlords with no experience being a landlord.        

As with many of the current tenancy laws that landlords complain about they have mostly been derived out of abuse or neglect of tenants rights. When landlords fail to follow the law it is easy for them to end up at the tenancy branch in hearing. Often these cases do side with the tenants when landlords have failed to respect a tenants rights.                

Recently I was asked about attending the RTB, my reply was we have not had to as we tend to emphasize the screening process, and the in tenant relations to ensure a positive outcome for both parties. 

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