Why use a Licensed Property Manager
If you own a property and need to have it rented. Who should you hire to manage the property? Good Question.
In BC the Real Estates Services Act is the law which outlines what a transaction in real estate is and who can manage those transactions for other people. We will look here at Rental Management specifically. It is a requirement to be licensed to provide rental management services in BC for others, unless you are in an exempt category.
The definition of rental management in the Real Estate Services act is as follows:
"rental property management services" means any of the following services provided to or on behalf of an owner of rental real estate:
trading services in relation to the rental of the real estate;
collecting rents or security deposits for the use of the real estate;
managing the real estate on behalf of the owner by
(i) making payments to third parties,
(ii) negotiating or entering into contracts,
(iii) supervising employees or contractors hired or engaged by the owner, or
(iv) managing landlord and tenant matters
The Real Services Act requires individuals to be licensed to provide Real Estate Services in BC to or on behalf of another in exchange for remuneration. There are some exemptions including, the owner of the property may manage the rental, caretakers hired by owners of a property, trustees in bankruptcy, executor or administrators of an estate, persons acting under the order of a court, practising lawyers and financial institutions with respect to real estate it owns. All other parties must be licensed to provide third party rental management in BC.
What are the benefits of using a licensed individual to manage your rental property?
All Real Estate Professionals are governed by the British Columbia Financial Services Authority (BCFSA) which has rules, regulations and requirements in place to protect consumers in the management of their real estate. All rental property managers are required to be employed by a real estate brokerage and have a license. Every two years property managers are required to renew their license, during the two year licensed period property managers are required to engage in specific training to ensure they are complying with regulations in the industry. The brokerage must follow strict rules for accounting the funds they collect from real estate transactions in trust accounts which can be audited by BCFSA for accuracy.
How do I know if a person or company is licensed?
The BCFSA website has information available for professionals and the public. Under public resources in the Real Estate section there is an area labeled “Find a Real Estate Professional”. In this section it gives you the opportunity to enter an individual's name and or name of the brokerage. If you enter the name of the person or the company and nothing identifies them, then they are not licensed in BC. BCFSA offers many more resources for customers explaining how professional managers are required to represent their clients, regarding conflicts of interest, confidentiality and how client money is managed.
If you are not sure your property manager is licensed, view the link below to find out.
https://www.bcfsa.ca/public-resources
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Rental Restrictions, are they Discriminatory?
I am a middle aged divorced man, father of two early adult children, one works full time in the film industry and is saving to buy his first home at the age of 21. The other is in his first year of post secondary education at Douglas college. I am a small business owner. I am a hard working individual who volunteered many hours of my time in my community while raising my kids, coaching, participating and organizing the sporting activities they were engaged in.
When you read the above what do you think?
There are many factors that affect the cost of housing for people purchasing and or renting.
In 2010 the province changed the law requiring all new Strata Corporations to indicate on the form J, Rental disclosure statement, a time frame when a strata lot could be a rental property. This effectively removed Strata Corporation’s right to establish a rental restriction bylaw. For properties built before January 2010 they have the ability to have a rental restriction bylaw. Are these rental bylaws helping increase the cost of housing in BC, I think they are. Are they discriminatory, I also believe they are.
A rental restriction bylaw can take many forms and one of those is limiting the owner’s ability to rent “part” of their strata lot when the owner resides in the property. The Civil Resolution Tribunal has reviewed multiple cases challenging rental restriction bylaws, in particular relating to renting a portion of a strata lot. Each case has been denied by the Civil Resolution Tribunal. Owners have tried to argue that renting part of the strata lot is not in violation of the bylaws based on the fact that the Residential Tenancy Act does not classify these types of situations as a rental. The most recent case is Cardenas vs NWR2247.
The Cardenas case is very interesting and highlights a problem with the Strata Property Act, Human Rights Code and how they are affecting the cost of housing. Cardenas didn’t dispute having a “roommate” and admitted he rented a room in his strata lot. Cardenas argued as had the other cases before the Civil Resolution Tribunal that the rental is not a rental as the Residential Tenancy Act, which is the legislation which governs tenancies in BC, does not acknowledge roommates as a tenancy, and that the strata property act has a provision that prohibits Strata Corporations from having a bylaw which contravenes another act. (section 121)
The adjudicator in the Cardenas case explained the Strata Property Act has its own definition of a tenant which is as follows: "tenant" means a person who rents all or part of a strata lot, and includes a subtenant but does not include a leasehold tenant in a leasehold strata plan as defined in section 199 or a tenant for life under a registered life estate;
and therefore the section 121 (1)(a) unenforceable bylaws does not apply in this case as the Residential Tenancy Act does not govern the Strata Property Act and its definition of a tenant. It states just because the Residential Tenancy Act does not recognize a roommate as a tenant, the Strata Property Act has the right to do so. This leads to the question of when would section 121 (1) (a) be enforceable?. Section 121 states (1) (a)states:
121 (1) A bylaw is not enforceable to the extent that it
(1)(a) contravenes this Act, the regulations, the Human Rights Code or any other enactment or law,
The Cardenas case adjudicator indicated that even though the rental restriction bylaw didn’t specify renting part of the strata lot was prohibited, the bylaw was still enforceable.
It begs the question of how the act that determines and governs rentals in BC can be overridden by a definition in another act. If the Strata Property Act has a definition of what a crime is, different to what the criminal code defines as a crime, would the Strata Property Act prevail?
The bigger question to this and the other cases are these bylaws restricting renting a part of the strata lot discriminatory to owners, potential owners and tenants, I believe they are.
As described above the definition in the Strata Property Act of a tenant is a person who rents all or part of a strata lot. Section 142 of the strata property act outlines “family” and “family member” as described in the regulations as being exempt from rental restrictions. Section 8 of the Strata Property Regulations describes family members to include the following:
8.1 (1) For the purposes of section 142 of the Act, "family" and "family member" means
(a) a spouse of the owner,
(b)a parent or child of the owner, or
(c)a parent or child of the spouse of the owner.
(2)In subsection (1), "spouse of the owner" includes an individual who has lived with the owner, for a period of at least 2 years at the relevant time, in a marriage-like relationship.
What does this mean to someone who owns a strata lot and has space for a roommate?. Who is eligible to live with them and who is not? In accordance with the current laws the following people are prohibited to live with an owner if there's a rental restriction bylaw.
A sibling (brother or sister), cousin, Aunt, Uncle, friend or partner who has not lived with the owner in a marriage-like relationship for two years. Let’s look at these more closely.
This means if a person buys a strata with a rental restriction, their sibling who lives in Ontario and wants to move here is prohibited from living with the owner.
Their cousin from another country who wants to come here for a year is not allowed to live with them.
Their boyfriend, girlfriend or partner of any kind is not allowed to move in. If they do, for the first two years they are in violation of a rental restriction bylaw.
Their best friend from growing up, from highschool or college is prohibited from moving in.
If one of your children is in a position to purchase a strata lot, should their sibling be allowed to live with them? Should their partner be allowed to move in?
Or when later in life, or after a divorce you as an owner meet a partner you want to move in with you, they would be in violation of a rental restriction bylaw.
According to the current definitions in the Strata Property Act and regulations, all of the above are currently prohibited.In these scenarios for the other person to move in, the owner would be required to change the title of the ownership of their property adding the individuals to the property as an owner, preventing the other person from being classified as a “tenant”
The human rights code is supposed to protect people from disrimination based on class of people. Why are Strata Corporations in my opinion, allowed to discriminate against a classification of people “tenants”, because they have a definition in their act which is different than what is in the Residential Tenancy Act. When renting a rental property, including in a Strata Corporation where a rental restriction bylaw exists, landlords are prohibited from discriminating against tenants. The current laws and decisions by the Civil Resolution Tribunal are granting Strata Corporations the right to discriminate against tenants.
As a strata manager, I have listened to many council members speak in a derogatory manner about “tenants”. They are tenants, they don’t keep it clean, we don’t want tenants they are always a problem, they don’t follow the rules. These are discriminatory comments based on a classification of people.
I kind of understand the ability of a strata to be allowed to restrict rentals of the entire unit, but it is time the Strata Property Act be amended allowing roommates of any kind for the benefit of housing costs, familys and to end discrimination. The Human Rights Code and the Civil Resolution Tribunal are failing tenants.
Some people are unable to afford a full property and renting a room is a very viable and affordable option. People’s economic situations are always changing and these restrictions prevent owners from being able to stay in “their home” when circumstances change.
When a couple goes through a breakup or divorce and one party keeps the strata lot, these laws restrict their ability to have other family, friends or a other tenant reside at the property to assist them to remain in their home. Or your family member needs a place to live and you are not able to provide that to them.
As a property manager, I have rented many properties to wonderful tenants who are great people. Why are Strata Corporations afraid of “tenants”?
Go back to the top and read the opening paragraph again before reading below.
Currently I am a tenant.
Notice to Vacate
There are many different notices to vacate a tenancy that can be used by landlords including a ten day notice, one month notice, two month and four month notice. What is the difference between each notice? Today we will talk about the ten day notice to vacate.
A Ten day notice used for unpaid rent and or utilities. A tenancy agreement should specify the date and time when rent and utilities are due and payable. If rent is due on the 1st of the month a tenant has the entire day of the 1st until 11:59:59pm on the 1st of the month. If rent is not received by the 2nd then the landlord is in the position to send a ten day notice to vacate the premises. The notice must be sent in accordance with section 88 of the Residential Tenancy Act (How to Serve Documents Generally) the requirements for delivering materials to a tenant.
When the tenant receives a ten day notice they have the right to pay the unpaid rent and or utilities within five days of receiving the notice. If a tenant pays the rent within this time the notice ceases to be in effect. The tenant may also file a claim disputing the ten-day notice. When a dispute is filed the tenant has the right to continue to reside at the property until the hearing is held and the dispute settled between the two parties.
When a tenant fails to pay the rent within the five day time frame, the tenant is supposed to move out on the effective date of receiving the notice. If the notice was delivered in person on the 2nd of the month the effective date would be the 12, ten days later. When a tenant fails to vacate on the tenth day the landlord doesn’t automatically have the right to change the locks and move them out. The landlord must file for an order of possession to vacate the tenants from the property. After receiving the order of possession the landlord must serve the notice and if the tenants continue to occupy the rental property, then the Landlord may file a writ in court which will engage a bailiff who has the authority to remove the tenants from the property.
It is important to follow the process of providing notice during an eviction or the tenant may be granted permission by the tenancy branch to continue residing at the property.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Rent Increases
Earlier in 2021 the BC government extended the rent increase freeze until December 31, 2021. At this time the freeze has not been extended beyond this date and the government has announced the allowable rent increase limit for 2022. The allowable limit for 2022 is 1.5%.
This means if you have a tenancy which was started before January 1st 2021 your property is eligible for a rent increase. In BC landlords are allowed to increase the rent once every 12 months. An increase doesn’t have to happen at the same time each year. If you are planning to increase the rent of your investment property it must be in a form approved by the residential tenancy branch. The RTB requires a rent increase notice be served three months in advance of the date the increase takes effect. If you are planning to raise the rent for January 1st you need to ensure notice is served by September 30th, 2021.
The form required is RTB 7, “Notice of Rent Increase”. The notice must be served to the tenant in one of the approved formats for service under section 88 of the Residential Tenancy Act. Common ways to serve the notice are leaving it with the tenant in person, leaving it with an adult who resides at the property, in the mailbox of the unit, sending a copy by regular mail, registered mail, faxing or emailing to a number or address provided for service.
It is important to understand that each form of delivery has a determination of when it is received by the tenant. This is called “deemed received”. When handing a notice to a tenant directly, it is received on that day. When sent by mail, regular or registered, it is received on the fifth day after it is mailed. This means if you send it on the 5th it is not deemed received until the 10th, as you are not counting the 5th. When leaving it at the mailbox, by fax, email or with an adult at the property, it is deemed received three days after it is sent or left at the property. Again you don’t count the day it was sent so an item delivered in these formats on the 5th is deemed received on the 8th. Often these dates are misunderstood and people count the day they sent it as one of the 3 or 5 days.
It is important to ensure that the notice is delivered in a timely manner to meet the deemed received requirements or the tenant may have the option of disputing the notice, which could result in the tenancy branch cancelling the notice, requiring a landlord to send a new notice effective three months later. We always recommend notices be sent in a timely manner and depending on the notice, in a format that allows for acknowledgement of receipt of the notice.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Do you have permission to rent?
Last week I was speaking with a colleague who described an owner in a strata building who had an issue with a flood. The interesting part of the story was the people living in the unit were not the owners, instead they were tenants. This was news to the Strata Corporation as the building has a rental restriction bylaw and this owner had not been approved by strata to rent their unit.
Owners must have permission to rent their strata lot from the council before they rent their unit. Permission can be granted in many forms, depending on who you are renting to. The Strata Property Act allows some Strata Corporations to have a rental restriction bylaw preventing an owner from renting without council permission. The act also has provisions allowing owners exceptions to rent to certain types of people even when the Strata
Corporation has a rental restriction bylaw.
Owner’s are permitted to rent to “family members” as described in the Strata Property Regulations. The regulations define “Family Members “ to include the immediate family of the owners. Immediate family being spouses, parents or children of one of the owners. These regulations exclude siblings, uncles and cousins as they are not “immediate family”. Strata Corporations may also grant permission to rent the unit to an owner who requests a hardship exemption. In January of 2010 the Strata Property Act was amended requiring the developer to identify a specific time on the Form J, “rental disclosure statement” stating when the unit’s rental period expires.
What happens when an owner doesn’t have permission to rent their strata lot and is in violation of a rental restriction bylaw? The Strata Corporation is in a position to identify the owner as being in contravention of the bylaws. If found to be in violation, they may impose fines up to the amount of $500. It could be determined that each day the unit is rented there is a contravention and it could be considered a continuous contravention of the bylaw which allows for a fine every 7 days.
Before you rent your strata lot. Find out if you need permission from the Strata Corporation to rent. Start by reviewing your bylaws to see if there is a rental restriction bylaw, then review the strata property act and regulations, review your form J which would have been provided with your purchase documents. Speak to a professional if you are unsure.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com