When does a Tenancy Start?

We were reading a tenancy issue recently about a tenant who paid the deposit, signed the tenancy agreement, the parties completed a move in inspection but then the tenants elected not to move into the unit. The tenant was requesting the deposit money be returned. Has the tenancy started? What do the landlord and tenant do in this situation?. 

If a tenant signs an agreement and does not provide any financial commitment they could argue the tenancy has not started since they have not moved in. They have a contract but they have not executed it at that time. The standard tenancy agreements in BC state the date rent is due and the date the deposit funds must be paid by. Tenants can pay the rent prior to the date identified on the agreement, though legally they are not required to do so. The standard agreement also indicates a date to which the security and or pet deposits must be paid by. If a tenant fails to pay these deposits by this date it can be cause to terminate the agreement. 

In today’s rental market we are renting properties to people who are agreeing to rent the property then the following month they move in. How can landlords ensure a tenant is committed to the unit and provide themselves with some protection. Cartref Properties practice is to arrange a time to sign the tenancy agreement and at that time we collect the security and or pet deposits if there is one. This creates an active agreement for both parties. What does that mean?.        

When an agreement has been engaged it means both parties must follow the terms of the agreement, or follow the law to terminate the agreement. 

If a tenant were to sign an agreement on November 15th to begin a tenancy on January 1st and pay the deposit funds on November 15th they have entered a tenancy agreement. If that tenant decides on December 8th that they are not going to be able to occupy the unit on January 1st as agreed upon they must provide notice to vacate or terminate the tenancy agreement. 

The basic law in BC provides that a tenant provide the equivalent of a calendar month’s notice to vacate a tenancy agreement. The notice period depends on the date rent is due. If this tenancy required rent to be paid on the first of the month then the tenant would need to provide notice to vacate that included the entire month of January as part of their notice. 

When a tenant provides notice to vacate both parties must meet to complete the move out inspection of the property to return the deposit funds to the tenant. The tenant must provide a forwarding address either on the inspection report or in another form if the tenant fails to attend the move out inspection. Landlords are required to return the deposit within 15 days to the tenants after the tenancy ends. Failing to do so could result in the tenant claiming double the amount of deposit owed. Often misunderstood in this process by tenants is that the 15 day time starts at the time the landlord is provided with their forwarding address. 

What happens if a tenant signs a tenancy agreement and then elects not to move into the unit? Does a landlord give the deposit back? It depends. A landlord can choose to return the deposit or they can follow the law. They can request the tenant provide proper notice in accordance with the agreement. In this case the tenant is ending an agreement before the fixed term expires, and may be responsible to compensate the landlord for rent they were expecting to receive from this agreement. 

In this situation the landlord has an obligation to mitigate their loss. If they were to find a new tenant at the same rent for January first then they would have no loss of income and would be required to refund the deposit funds. If they were unable to find a tenant until February 1st the landlord has an argument that the tenant should owe them rent for January. In this case they would either complete the move out inspection for where the tenant signs the form agreeing to forfeit the deposit funds to pay for the rent in January or the landlord would be required to file a claim with RTB to have a hearing  to be granted permission to keep the deposit funds in lue of unpaid rent. 

Landlords often misunderstand that they are only permitted to keep deposit funds if they have either the tenant’s permission or by an order from the RTB stating they have the right to keep the funds. If the landlords have neither of these they are violating the tenants right to have their deposit funds returned.  

What you should do is communicate clearly to the tenant before they sign the tenancy agreement that by signing and paying the deposit funds both parties are engaging in the agreement and are now bound by the terms of the agreement. Landlords should only complete a move in inspection with the tenants at the time they are handing over the keys to the tenants. If a landlord performs the inspection with the tenant but doesn’t give them the keys on that day it could be argued the condition of the unit was not what was agreed upon and this could be a legitimate reason for a termination of the tenancy agreement. 

Landlords should never hand over the keys to a tenant until the security deposit has been collected. After the tenant moves in if the deposit has not been paid it will be difficult to obtain this from the tenants. We often provide tenants a few days before the start of the month access when possible to make moving easier. We avoid more than a week when possible and if they want more than a week then we require payment of rent for those days.  

When unsure what to do, follow the law. 

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