Landlord Loophole Closing

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Just wondering on landlords thoughts on this new rule

Renters in British Columbia no longer need to worry about their landlords hiking up rates to match high rents in hot neighbourhoods.

The NDP government announced it's closing another loophole in residential tenancy and manufactured home park tenancy regulations by eliminating a clause that permitted landlords to raise rates above the allowable rental increase limit to match rents within a geographic area.

Spencer Chandra Herbert, a New Democrat member of the B.C. legislature, said the change is part of an effort to provide the 1.5 million renters in the province with more security.

"Renters have been threatened with huge rent hikes under the existing rules — that's a scary situation for any renter," he said in a news release.

The current allowable rent increase is set at four per cent but the clause allowed landlords to raise rents at significantly higher rates to match neighbouring prices.

Andrew Sakamoto, executive director of the Tenant Resource and Advisory Centre, said some landlords took advantage of the clause to "bully" tenants into agreeing to rent increases.

"A landlord will go to a senior and say, 'You know what, the law allows me to apply for this 50 per cent geographic increase but I'm a nice guy, I'll let you sign for a 30 per cent rent increase and we won't have to go through the whole process. I'll give you a break,'" he said. "These often disadvantaged tenants won't know any better and they'll sign the agreement and accept or consent to a 30 per cent increase."

Sakamoto said the move to eliminate the clause compliments changes announced earlier this year to slow skyrocketing rental rates.

The government said in October that it would eliminate vacate clauses and restrict rent increases between fixed-term tenancy agreements. Landlords could previously abuse the clauses to force out tenants at the end of a lease and hike up rents for new agreements.

Sakamoto said the changes will have a significant impact for renters in competitive markets like Vancouver where the vacancy rate hovers near zero.

He adds more changes are needed to improve housing security and affordability for renters. The centre is advocating for greater penalties against landlords who evict tenants for renovations and fail to follow through on the work.

Sakamoto said the burden for reporting that the reason for the eviction was honoured should no longer be on the tenant who is seeking compensation if they were wrongfully evicted.

"It's often challenging, right. You don't live in the unit any more, it's hard to gather evidence of what's going on in there. So we'd like to flip that burden and see the landlords have to prove to an arbitrator that they did follow through," he said.

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*removed*

[Jflem1983]

That ought to put a ton of rentals up for sale quickly. Especially with these high land prices. Bet a few people get out while the getting is good. Gonna be tough for those who are renting. The pool pf rentals will shrink. Rates will continue to rise. Only gonna put more pressure on the marginalized. . I guess that was the goal

[LTD]

so now they simply kick them out paint the walls throw a little carpet in a room or two and rent it out for more sounds much better for the renter

[Queen K]

Combine this with the MJ plant laws that are coming in July, and rentals will get tighter.

On one hand the NDP are trying to champion renters rigthts, those who are so marginalized, and on the other hand, kicking the entrpreneur or the landlord when interest rates are set to rise is not the answer.

Actually, I've concluded that there is no answer after looking at rental rates yesterday.

The obscene rates asked for housing is just that, obscene.

[Bsuds]

so now they simply kick them out paint the walls throw a little carpet in a room or two and rent it out for more sounds much better for the renter

Wasn't that one of the things they were eliminating?

[getridofit]

As a landlord with multiple properties I would agree with the closure of this particular loophole. However, like many landlords I am considering getting out of the rental game as the risk is not worth the return. There is effectively no support from the City, the BC government or Federal Government to help landlords. The City of Kelowna is creating havoc in affordable neighbourhoods by allowing affordable rentals to be torn down in favour of higher density expensive multi unit residences. There is no shortage of rentals in the City as some have claimed, I had a downtown unit vacant for months this winter. The issue is affordability and anyone that can do basic math can see that affordability without government subsidy is never going to happen. Who in their right mind would give away their property at cost while the governments take exorbitant taxes; it is game over for affordability.

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so now they simply kick them out paint the walls throw a little carpet in a room or two and rent it out for more sounds much better for the renter

READ before you speak about painting walls and putting in new carpet. These are the new rules. I'm a landlord and have rented for many years. I have been fair (where in Kelowna can you rent a NICE house for under $1,500.00) Now I have to jump through a bunch of hoops to get my mortgaged house back. Property taxes up, interest rates up, house insurance up, etc.,and I can only raise the rent 4%..... I'm done I'm selling.

REASON FOR THIS TWO MONTH NOTICE TO END TENANCY (check the box that applies)
The rental unit will be occupied by the landlord or the landlord's close family member (parent, spouse or child; or the parent or child of that individual's spouse).
The landlord is a family corporation and a person owning voting shares in the corporation, or a close family member of that person, intends in good faith to occupy the rental unit.
All of the conditions for the sale of the rental unit have been satisfied and the purchaser has asked the landlord, in writing, to give this Notice because the purchaser or a close family member intends in good faith to occupy the rental unit.
The landlord has all necessary permits and approvals required by law to demolish the rental unit, or renovate or repair the rental unit in a manner that requires the rental unit to be vacant.
The landlord intends to convert the residential property to strata lots or a not-for-profit housing cooperative.
The landlord intends to convert the rental unit for use by a caretaker, manager or superintendent of the residential property.
The landlord has all necessary permits and approvals required by law to convert the rental unit to a non-residential use.
The tenant no longer qualifies for the subsidized rental unit.

[Chris.S.]

It wasn't a "Loophole", IMO that's just the spin they put on it to improve their appearance.

It was rule, a policy if you want. A rule that started be abused by some questionable landlords. And the NDP response penalizes everyone.

As a landlord, I used it as a tool to try and keep my rents as low possible for the tenants. I was able to safely do that knowing that I had the ability to make an adjustment every 12 months (the length of term I choose to use).

Now, after listening to only tenants and not consulting any landlords or property owners, the NDP has taken that ability away from me which effectively places me in a position of having to raise the rent on my units by $200-$250 (possibly more even) to create a level of financial protection for myself.

No one is regulating or capping mortgage interest rate increases, insurance rate increases, utility rate increases or property tax rate increases. I am at the mercy of the bodies in charge of those to do whatever they choose to do.

I'm not a big evil slumlord. I'm not trying to turn a huge profit on my rentals. I'm just a guy, probably not that different than yourself who wants to not LOSE money every month.

I understand that they needed to do something to address bad landlords that were abusing the system, but I wish they would have tried a little harder to find a more equitable solution that could have benefited everyone.

[TylerM4]

It's a stupid short-sighted move.

I already got out of the rental business. Like others - too much risk for the reward. Now it's even worse.

Does anyone really think that making it difficult for landlords to increase rates is going to help anyone? Landlords are motivated by profit - very few are doing this out of the goodness of their hearts and they will find a way or give up the business completely.

Here's what's going to happen:
- Landlords will sell. Why rent and accept the risk when you can sell and make just about as much in interest from the bank.
- Landlords will find another way to raise the rent. There's always a way, and none of them are good for the tenant. Suddenly they'll start sending eviction notices for any little thing. A new tenant means a new rate.
- Landlords will start flipping buildings. Sell apartment complex A and buy apartment complex B. New owner means a new rental agreement and a new rate.
- Landlords will move to term based rentals/leases. They'll limit tenants to a 1 or 2 year lease. When the lease expires - you're out. Want to stay? Sure, no problem... but it's a new lease and a new rental agreement with a new rate.

There's only one long term viable way to control rental rates. It comes down to everything else that dictates price in a capitalistic society. Supply vs Demand. Prices are so high because there isn't enough supply to meet the demand. Demand isn't going to change, that means we need to increase supply. We need to encourage MORE people to become landlords, encourage MORE investment/development in rental property. We need to do things like revamp the residential tenancy act so that landlords are not forced to accept so much risk. Doing things that force a landlord to accept more risk (eg. limiting ability to increase rent) is exactly the wrong thing to do and will only make matters worse.

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There is no more fixed terms or leases.If you have a fixed term now it automatically go month to month. That's the new law! You have no control.
Below states the only way you can get your house back.
Note that you can only evict your tenants if you are doing MAJOR work on your rental. You must submit permits and construction receipts to the rental board

REASON FOR THIS TWO MONTH NOTICE TO END TENANCY (check the box that applies)
The rental unit will be occupied by the landlord or the landlord's close family member (parent, spouse or child; or the parent or child of that individual's spouse).
The landlord is a family corporation and a person owning voting shares in the corporation, or a close family member of that person, intends in good faith to occupy the rental unit.
All of the conditions for the sale of the rental unit have been satisfied and the purchaser has asked the landlord, in writing, to give this Notice because the purchaser or a close family member intends in good faith to occupy the rental unit.
The landlord has all necessary permits and approvals required by law to demolish the rental unit, or renovate or repair the rental unit in a manner that requires the rental unit to be vacant.
The landlord intends to convert the residential property to strata lots or a not-for-profit housing cooperative.
The landlord intends to convert the rental unit for use by a caretaker, manager or superintendent of the residential property.
The landlord has all necessary permits and approvals required by law to convert the rental unit to a non-residential use.
The tenant no longer qualifies for the subsidized rental unit.

[jimmy4321]

"There is no more fixed terms or leases.If you have a fixed term now it automatically go month to month."

I prefer renting units month to month. If people need to move on let them go with 1 months notice. Nothing worse than having people around that don't want to be there, or turning away great potential tenants because they won't commit to a year lease. Most plans don't work out and that great tenant could be there for years.
In this rental market you have it rented before the ink on the notice is dried.

[Jhunter199]

As a landlord with a couple of properties, I have no issue with this no rule. For the past 8 years, we've listed properties at market value, signed 1-year lease (with an option of another lease at the same price) never ever went month to month. Once tenants decided to move out/move on we re listed again at an adjusted market price. We've had nothing but great tenants and zero issues in our years of doing this.

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As a landlord with a couple of properties, I have no issue with this no rule. For the past 8 years, we've listed properties at market value, signed 1-year lease (with an option of another lease at the same price) never ever went month to month. Once tenants decided to move out/move on we re listed again at an adjusted market price. We've had nothing but great tenants and zero issues in our years of doing this.

I have also only done 1 year leases. You can no longer do leases! If you have a lease in place now and it expires it goes automatically to a month to month. You can no longer adjust to market value! You can only increase the rent at what the rental board allows (4%) I believe? If you want your rental back you have to sell it, move in yourself or your family (daughter, son, parents only) or do a MAJOR Reno that includes receipts from contractors, permits etc.

[Jflem1983]

As a landlord with a couple of properties, I have no issue with this no rule. For the past 8 years, we've listed properties at market value, signed 1-year lease (with an option of another lease at the same price) never ever went month to month. Once tenants decided to move out/move on we re listed again at an adjusted market price. We've had nothing but great tenants and zero issues in our years of doing this.

I have also only done 1 year leases. You can no longer do leases! If you have a lease in place now and it expires it goes automatically to a month to month. You can no longer adjust to market value! You can only increase the rent at what the rental board allows (4%) I believe? If you want your rental back you have to sell it, move in yourself or your family (daughter, son, parents only) or do a MAJOR Reno that includes receipts from contractors, permits etc.

Wow is it that burdonsome unto land owners. This is really gonna put the squeeze on land lords who will obviously be encouraged to sell. Maybe the provincial NDP has govt ghettos in mind ?