Who is the Landlord on the Tenancy Agreement
The Government of BC offers a standard tenancy agreement. Cartref Properties always uses the standard agreement along with an addendum. Why do we use the standard agreement? The Residential Tenancy Act has requirements on what must be included in all agreements. The standard agreement meets all the basic requirements of a tenancy agreement.
One important requirement of a tenancy agreement is properly identifying the legal names of the landlord and tenants. The first section of the standard agreement is the section you fill in the proper names of the landlord and tenant. This section indicates if the landlord is a company, use the last name section for the company name. What we have experienced recently is some property management companies are indicating their company name in this section when they are managing a unit for an individual owner. Is this the correct use of this section? We don’t think so.
After identifying the landlord the agreement asks for the names of the tenants, the address for the rental unit, followed by the address for service and has the option of identifying if the address is for the landlord or the landlord’s agent.
In multiple cases we have seen property management companies identify themselves as the landlord then indicate their business address for service and check the box that they are the landlord’s agent. On a tenancy agreement the landlord and landlord’s agent are two different parties, the landlord can’t also be the landlord’s agent, these two parties must be different people. Why is this important? If the owner of the property elects to move on to a different property management company there could be issues as the landlord is not listed as a party to the rental contract. If the tenancy has an RTB case it could be identified the contract has an issue with the proper identification of the parties involved.
We are unsure what this could mean in a RTB hearing though it would not look favourable on the landlord or the property management company. Often in a hearing it might be a requirement to submit a copy of the tenancy agreement. With property management the RTB expects landlords to have more knowledge than tenants and property management companies to have even more knowledge than landlords. The higher the expectation the higher the standard the RTB holds for understanding the Tenancy Laws, which can lead to the RTB making a decision not fully based on facts but based on misrepresentation on a tenancy agreement.
Understanding the difference between who a landlord is and who the landlord’s agent is, is an important part of managing a property. Filling out documents incorrectly leads to potential negative experiences in a tenancy.
Need assistance managing your rental property.
Cartref Properties can assist you, call today to discuss your needs.
You can find more information about us at: www.cartrefproperties.com
Why you should not hire the strata management company to manage your rental in a building they manage!.
When hiring a rental management company to manage your investment property there are many factors you should consider. One factor that is often misunderstood is what happens if you hire the strata management company who manages the building your investment property is located in.
BCFSA has rules regarding conflicts of interest. One of the conflicts of interest is when a strata management company also manages rental units in buildings they provide strata management services to. In these situations BCFSA requires the management company to obtain permission from their clients to modify their duties when a conflict arises. This is obtained by having one client, always the rental client, sign an agreement that indicates they are the secondary client and their duties will be modified during conflicts of interest. Why would you hire a property manager who needs to modify their duties and is unable to provide proper representation while managing your investment property.
When is there a conflict between strata corporations and rental owners?. There are two major issues that create conflicts between rental owners and strata corporations. One is when there is a bylaw infraction, and the second is when there is an insurance claim or damage caused to your unit by the strata or another unit.
When you rent your strata lot tenants sign a Form K which means they agree to adhere to the strata bylaws for the property. If the strata management company issues a bylaw infraction to your tenant, and the council directs the management company to apply a fine, is your rental manager ensuring their own management company is properly applying the strata bylaws and following proper procedure for enforcing bylaws. Or are they asking you to follow the directions of the strata due to the management company managing the building.
This is when the conflict arises and if the rental manager speaks up to provide the rental owner with advice the management company would then possibly be violating their obligations to the strata corporation by not following their directions. That is why in these cases the rental clients, who are the smaller portion of the business, will be the client who has the modified duties applied to the services they are receiving.
Recently we had an experience with a bylaw requesting the tenant pay a move out fee. The bylaw clearly states the move fee is not charged to move outs only move ins or moves from one unit to another in the building.
The bylaw wording is:
"the moving fee applies only to occupiers moving into the building or from one suite to another"
We are stil awaiting a response from the strata manager to confirm our tenant is not required to pay a move out fee. Why should the rental manager be asking the strata manager to clarify and ensure the fee is not required here. If the tenant fails to pay the fee, the strata will apply this fee to the owner’s account and maybe apply a fine to the owners account expecting the owner to pay the fine, due to the tenants actions even when the bylaws are being applied inaccurately. When the management company is also managing the rental unit they may miss an issue of this nature and just request the owner pay a fee or fine that is not required.
The above situation could also apply when an insurance claim occurs. In an insunrace claim this could lead to an owner being charged a fine, deductible and or repair costs without having proper advice on who is responsible for the costs related to the issue.
Avoid conflicts of interest in management of your investment rental property, by not hiring the management company who provides the strata management services.
Need assistance managing your rental property.
Cartref Properties can assist you, call today to discuss your needs.
You can find more information about us at: www.cartrefproperties.com
Do I know the Tenancy Laws?
Often I find myself communicating with individual landlords who are renting their own property out who indicate they are familiar with the tenancy laws. It’s not long into the discussion when the conversation turns to a specific tenancy situation and as the landlord explains how they manage their property when they identify their lack of knowledge of the tenancy laws. One of the most common misunderstood portions of the tenancy laws are fixed term tenancies.
Recently I was speaking with a landlord who indicated they offer their properties on a three month fixed term agreement, then if they like the person after three months they offer them another three months or longer. When I asked how they managed this process they looked confused? I explained that BC tenancy laws require landlords to indicate at the start of the tenancy if the rental is a fixed term and for what length. It also requires the landlord to indicate they are moving in at the end of the fixed term if they want the tenant to move out.
If the landlord doesn’t indicate they are moving in then the fixed term automatically becomes a month to month tenancy at the end of the fixed term. When the landlord does request the tenant to vacate the landlord or a close family member as defined in the Residential Tenancy Act must move in for a minimum of six months.
Many Landlords are looking for ways to vacate tenants and personal use is a common way they look at moving the tenants out. Misunderstanding this fundamental law can lead to many difficulties. When a landlord evicts a tenant for personal use and doesn’t move into the property for the six months the tenants have the right to file a claim for being evicted in bad faith and the maximum penalty for this is the equivalent of 12 months rent. This fixed term law prohibits apartment buildings from evicting a tenant and re-renting their unit at a higher rental rate above the allowable annual rent increase limit. The Residential Tenancy Act was changed in 2017 to prevent landlords from taking advantage of tenants through this process. Prior to 2017 many landlords would use fixed term tenancies to vacate their tenants from a property and bring in a different tenant who was prepared to pay a higher rent. The law was changed due to the abuse by landlords who were creating a negative tenancy enviroment in the rental market. Landlords would like to see this changed though I am sure it won’t be changed back, requiring landlords to educate themself of the laws.
It is important for landlords to understand the basic laws that govern tenancies in BC. When there is a dispute between a landlord and tenants, the landlord is the party who is expected to have more knowledge than the tenant.
Need assistance managing your rental property.
Cartref Properties can assist you, call today to discuss your needs.
You can find more information about us at: www.cartrefproperties.com
Short Term Rentals:
The BC Provincial government announced on October 16th that they are making changes to the requirements for short term rentals in the Province. The change is, short term rentals will not be permitted in larger municipalities over 10,000 except in your principal residence. What that means is, you can rent a room or basement suite in your home, but you are not permitted to rent an entire condo, townhouse or house that you do not live in.
How will this affect the housing market?. The government is under pressure to find ways to increase housing supply and reduce housing costs. They feel this will bring a number of properties back to the rental and housing market which are currently being used as short term rentals only. We have heard a number of owners of rental properties have moved to short term rentals as they have not been happy with the tenancy laws in BC. This will take time before we see the effects in the marketplace. I think more people will choose to sell the property than return to the rental market. Either action of selling or returning to the rental market will put downward pressure on both the sales and rental markets. More rental products in the market may cause a reduction in the potential rental rates. Our experience is that in the long run this will have little effect to reduce the cost of renting and rather will return more housing options to the selling market.
These actions often slow development, similar to the increase in interest rates which has caused many developers to hold off on plans for future developments of new products as profitabilty has left the market. With less development of new products that puts upward pressure on the sales and rental market rates. We believe this action will slow the development of purpose built rental products in the coming years.
We are unsure what the immediate effect will be on the rental market and the principal residence factor doesn’t take effect until May of 2024. Eventually the rental rates will stabilaize though this may take a few years of this action taking effect. During covid rental rates increased significantly due to many owners selling properties as the housing sales market increased dramatically. This removed a number of rental products from the market putting upward pressure on the rental prices. As covid ended more product has entered the market which is putting downward pressure on the sales/rental markets, and this is why many landlords have moved to the short term rental market. Laws can and will change sometimes with short notice.
Need assistance managing your rental property.
Cartref Properties can assist you, call today to discuss your needs.
You can find more information about us at: www.cartrefproperties.com
Are Problematic Tenants abusing the system
Below are my thoughts on the petition to change the laws regarding tenancies in BC and why I think they were introduced and won’t be changed.
As a landlord the RTB expects you to have more knowledge of the tenancy laws then tenants. As a licensed property manager in BC the RTB expects you to have more knowledge than the individual owner who is managing their own rental property. These are reasonable expectations. Many of the issues raised here are due to lack of knowledge by the landlords before they become a landlord.
Is the RTB favourable to tenants?. I advise my clients yes, and the reason is they are trying to not make someone homeless without a valid reason. A comparable to that would be the banks and mortgages. If you sign a fixed term mortgage with a bank and the next day the rate goes up the bank must honour your rate for the term of the mortgage. Imagine every time the rate changed the banks could change your mortgage. This happens with variable rate mortgages though buyers who sign those are informed of that possibility before making that decision. Variable rates also go down, which is not a positive to the bank, their risk.
What are landlords’ concerns?
1- Tenancy Branch decisions to slow
The petition calls for shorter time frames for the RTB hearings. In general this is a good idea, and the wait times before covid had not really changed for many years, and now that covid is over the times are coming back to those levels. There are two ways to reduce wait times. One is to hire more people, the other is to have fewer hearings.
Hiring more people would increase costs and that would require an increase in direct costs or taxes, which people won’t want. There is a built in wait time to prevent landlords and tenants from abusing the situation just to have someone moved out quickly.
If more landlords were familiar with the tenancy laws they would not end up in the RTB, reducing the wait times. Landlords feel the RTB is in favour of the tenants and it is. I communicate to my clients it has a mandate of not making someone homeless without good reason. If you read many of the decisions in hearings brought forward by landlords there are many procedural problems identified with their claims. That means they have failed to follow the law. Better education for landlords will reduce the number of claims in the RTB.
2- Fixed Term Tenancies
In 2017 the government changed the laws regarding fixed term tenancies. The reason this was changed is due to many landlords abusing the process of increasing rents in excess of the allowable rent increase limits. Many Landlords would require tenants to sign a new lease at a higher rate in order to continue to live in the same property. If they refused then the tenant would have to move. The fixed term tenancy change was brought in to provide tenants with stability to their life. If this is reversed landlords will abuse the system for good tenants when rental rates are increasing rapidly, and cry fould when their tenants move to a lower rate place when rates have decreased. This creates a very unstable rental market, and hinders employers as employees struggle to find housing which creates greater turnover.
3- Rent Increase
In BC in the 1970’s limits on rental rates were introduced and landlords increased the rent significantly before the limits came into effect. The limits were capped around 10%. In the mid 80’s the limits were removed during a rate of high inflation, and large exodus form the Provice due to lack of employment and affordability. The limits were re-introduced in the early 1990’s and were set at a limt related to the inflation rate. The rates were brought in for various reasons including again to provide stability for tenants and reduce the nomadic movement of tenants, which affects business. When tenants are constantly moving they are more frequently changing employment.
An unrestricted market of rent increase doesn’t equate to higher rents for landlords. In fact it often equals lower rental rates, higher turnover and higher vacancy rates. Both turnover and higher vacancy rates increase costs to landlords. Currently Vancouver has a vacancy rate close to 1 and this has been the rate for many years. Alberta has a rate of around 4.5 and has lower rental rates for comparable units as competition for units is greater. A lower vacancy rate leads to higher rates at the time or renting the unit.
4- Collection of unpaid rent
The collection of unpaid rent after a tenant leaves the property is a problem for landlords as tenants are not required to provide information. Having said that, there are people who can find teannts, for a fee and many landlords are unwilling to make the effort to find these tenants. A simple change that could help would be to allow landlords to collect additional personal information including picture identification during the application process. This identificiation could then be used to assist locating these former tenants.
When a landlord has received a monetary order from the RTB they can collect the funds from the tenants if they can find them. If they are unable to find them there are resources including collection services that can and will find these parties and are able to put these orders on tenants credit ratings. Many landlords are unwilling to take these actions indicating it is an onerous process.
Creating an insurance or financial pool would need to be for both parties. Meaning many landlords fail to perform their basic duties or repair. Should the financial pool and insurance be used to pay for repairs that landlords fail to undertake?.
Increasing the security deposit to two months rent will kill the rental market. People will move to other locations where this is not in place. Other places dont have more than one month’s rent for a deposit as it is onerous for a tenant to provide that amount prior to moving into the unit.
5- Publish Tenancy Branch Decisions
The main reason the names are not published at this time is the lack of trust from the government that landlords will not use this information to discriminate against applicants in the future. Just because a tenant has a claim in the RTB against a landlord doesn’t mean they will be a problem tenant at the next property. Tenants already feel hesitant to make a claim against landlords while they live in the property due to a fear of retribution from the landlord. If the names are published tenants will not make claims or just settle with landlords and move, meaning it is not a fair and equitable system. If names are published then both tenant and landlord names must be published, so tenants can also search for bad landlords.
Landlords complain that if a landlord files a claim against a tenant bad tenants will cause damage to their property. The awsner to that is, don’t rent to them in the first place. A good landlord will perform proper due diligence and keep communication open during the term of the tenancy making the tenants feel comfortable asking the landlord for assistance.
Privacy laws in BC prevent landlords from discriminating against a party who has a criminal record PIPA regulations. When in doubt don’t rent to the party.
6- Reduce cost of Eviction
Eliminating the process of filing in court the order from the RTB and hiring a bailiff would lead to many confrontational situations that will not end well. Having the police attend instead of a bailiff is a waste of police resources and would in the end be more costly. The owner should be responsible for these costs as it is their “business”. The RTB is not the legal court and this is suggesting we circumvent the legal reights of individuals. I advise my clients it is comparable to not paying your mortgage with the bank. If you miss one payment they don’t repossess your house in five days. Many landlords fail to understand they are running a busines and there are inherent risks to running any business. Retail owners must repair broken storefront glass, when they didn’t break it.
7-Definition of Close Family Member
The reason behind a tight definition of close family member is, how do you verify that the person who moved in is actually a third cousin, blood relative of the owner. This is already abused even though there are significant penalties for not following the law. This may have been a solution if the government didn’t remove the restrictions in the strata property act to allow more housing to be used by family members. This would just become an excuse to move more tenants out of properties.
8- Notice and Compensation
The reasoning behind this is to provide the tenants the ability to have the funds to pay for the security deposit they are renting. It may seem unfair to the landlord, but the only reason the tenant is moving in these situations are landlords requesting they vacate the property, having the tenant to incur moving costs they were not anticipating to have. When the tenant vacates the property the landlord has every right to rent the property the very next month the tenant vacates, losing no rental income.
If the tenant withholds the rent and causes damage there are processes in place for landlords to recover that compensation. Many landlords are lazy and unwilling to follow through on these processess.
9- Abandonment of Property
This I agree needs to be amended. There is a process in place for tenants when vacating the property and the requirement of them to remove all belongings. If after they have vacated the property and there are belongings left behind landlords should be allowed to do with it as they wish. They should not need to incur further costs to store these items. Having said that, if they do, these costs can be added to a claim in the RTB to recoup the costs.
10- Make Service of Documents Easier
It took many years for the laws to change allowing email to be a form of communication. Adding text messaging and social media would be difficult to monitor as well. Social media accounts are always changing and often don’t even use the parties legal names. Text messaging is not the best format for sending documents which is part of the process of filing for a hearing. It would be hard to send a hearing package through texting and social media apps.
If you are at a hearing you have the required address for service, as there is a requirement to send the hearing package to the tenant in order for the hearing to proceed, which eliminates the need for having both parties provide a forwarding address. It could be neccessary if the tenant has moved from the location where the hearing package was sent and in that case it should be part of the decision process. Both landlords and tenants’ addressess should be part of the hearing decision delivered to each party.
In my opinion many landlords fail to understand the basic fundamental of being a landlord is that you are operating a business. They don’t treat it like a business and then wonder why they are having a negative experience.
Landlords should have the objective of having a positive experience for both the tenants and themselves during the tenancy. Positive doesn’t mean you are entitled to the maximum allowable rent at all times. Like any other business there are ups and downs, costs and laws are always changing. Businesses adapt to the changes as they go along.
I would like to see the government create a basic testing system for landlords to take before renting their own property to increase the education level of self managing landlords. This won’t happen though it is worth considering.
Need assistance managing your rental property.
Cartref Properties can assist you, call today to discuss your needs.
You can find more information about us at: www.cartrefproperties.com