Difference between revisions of "Tenancy Agreements (19:II)"

Latest revision as of 20:30, 8 August 2023

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on August 2, 2023.

A. Protecting the Tenant

A third party should accompany a potential tenant during a rental unit showing, so there is a witness as to the landlord’s representations made during the showing. Important: Get the landlord’s promises in writing if possible but note that landlords are not obligated to provide them in writing.

After establishing the tenancy and before the tenant moves their personal possessions into the rental unit, the RTA requires the landlord and tenant to jointly conduct a condition inspection and fill out and sign the RTB’s Condition Inspection Report. This report notes the condition of various elements of the rental unit. It is a good idea to take photographs at the initial move-in inspection, as well as the move-out inspection. The landlord must provide the tenant with a copy of the Condition Inspection Report within 15 days.

Fees for cable and internet should be negotiated before the tenancy commences and included in the Tenancy Agreement.

The Residential Tenancy Branch provides a fillable and printable Tenancy Agreement at https://www2.gov.bc.ca/assets/gov/housing-and-tenancy/residential-tenancies/forms/rtb1_chrome.pdf.

1. Illegal Application Fees

A potential landlord cannot ask a renter or potential renter for an application fee. If someone has paid an application fee and the landlord will not give it back, one can apply for dispute resolution to have it returned. Applicants will need to know the landlord’s proper name and address and have proof that the fee was paid see RTA, s 15. If a landlord does this as a business practice, the tenant should report this to the director of the RTB, or to the RTB’s Compliance and Enforcement Unit (CEU), who can launch an investigation. (https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/compliance-and-enforcement).

B. General

A lease gives the tenant the right to use, enjoy, and dispose of the property for a fixed duration. The landlord has a freehold in reversion, allowing them to sell their property to someone else. A tenancy continues under the same terms when a rental property is sold in BC. The landlord cannot terminate a lease simply because they want to sell the property. Instead, the new owner will take over as the landlord. No new lease is required to be drafted and signed, though this may happen if both parties agree.

1. Two Methods of Creating a Tenancy Relationship

a) By Formal Contract

Although s1 of the Act defines “tenancy agreement" as an agreement, whether written or oral, express or implied, between a landlord and a tenant respecting possession of a rental unit, use of common areas and services and facilities, and includes a licence to occupy a rental unit. Starting January 1, 2004, a landlord must prepare in writing every tenancy agreement that complies with the Act (RTA, ss 13(1), (2)). Like any valid contract, there must be an offer, acceptance, and consideration.

Vague terms of the tenancy agreement may be framed in the tenant's favour using the principle of contra proferentem (i.e., the agreement will be strictly construed against the party who provided the agreement's wording) and principles of statutory interpretation. The law seeks to recognize and validate the relationship where possible, even where the requirement for a written tenancy agreement has not been met.

b) By Implied Contract

Notwithstanding this obligation to prepare a written agreement, where there have been offers, acceptance, and some kind of meaningful consideration, the law may imply the existence of a valid tenancy agreement.

C. Contractual Nature of the Tenancy Agreement

1. Freedom of Contract and the Agreement

Parties are free to add and alter the terms, covenants, and conditions subject to common law and statute restrictions. Changes in the tenancy agreement must be in writing, signed and dated by both parties. Unilateral changes may only be enforceable if something is offered or given in return.

a) Collateral Contract The parties may enter additional or subsequent oral or written contracts on top of the tenancy agreement. If an Arbitrator determines the terms are reasonable and not unconscionable, as defined within s 3 of the RTR, new landlords or tenants that take over or enter into the same tenancy agreement would be bound by the collateral contract. A remedy for the new landlord would be found in an action against the seller. Oral collateral contracts are hard to prove. If something is important, it should be recorded in writing.

2. Terms, Covenants, and Conditions

a) Covenants/Terms

A covenant in a tenancy agreement consists of a promise by a person that a certain thing must or must not be done (the RTA eliminates the word “covenant” and uses the more modern word “term”). A “Material Term”, as used in the RTA, is a term going to the root of the relationship and the tenancy agreement. Landlords and tenants may agree to any term they wish, if it is not unconscionable or contrary to the RTA. Terms contrary to the RTA may not be identified in some cases until dispute resolution, and a tenant is free to argue that a term violates the RTA and should, therefore, be void. The Arbitrator will take this into consideration when determining reasonableness. For more information, see RTB Policy Guidelines 8: Unconscionable and Material Terms.

b) Express, Implied and Statutory Terms

Valid express terms or conditions override any implied terms or “usual terms” that might otherwise apply at common law. For residential tenancies, the RTA deems some express terms to be unenforceable The RTA also establishes statutory terms, deemed to be terms in every agreement, that override any express or implied term to the contrary. For tenancies not governed by the RTA, a court will find implied obligations and insert the usual terms if the parties have failed to expressly agree to certain matters.

c) Express Terms

Parties may write their own tenancy agreement with their own terms or may use a standard form tenancy agreement to which they can add their own extra terms.

The RTA requires that all tenancy agreements include standard terms outlining key statutory rights and responsibilities of the tenant and landlord (see RTA s 12, and the Schedule to the Regulation). The standard terms cover repairs, payment of rent, rent increases, security deposits, assignment or sub-let, occupants and invited guests, entry of the residential premises by the landlord, locks, ending the tenancy, and the application of the RTA. To assist landlords and tenants, the Ministry created a standard Residential Tenancy Agreement, available online (https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/forms). This Agreement incorporates suggestions put forward by landlord and tenant stakeholders and includes the prescribed terms found in the Schedule of the Regulation.

d) Reasonable Terms

Changes in the RTA allow more ability to agree to any term landlords and tenants wish than the repealed Act did. However, a term of the tenancy is unenforceable if (RTA, s 6):

(a) the term is inconsistent with this RTA or the regulations;

(b) the term is unconscionable; or

(c) the term is not expressed in a manner that clearly communicates the rights and obligations under it.

See Policy Guideline 8: Unconscionable and Material Terms.

The following are also examples of express terms that are void and unenforceable:

a term purporting to hold that the RTA does not apply to the agreement or attempts to avoid the RTA (s 5(1) and (2));
that the rent remaining for the term of the agreement becomes due and payable if a tenant fails to comply with a term of the tenancy agreement (s 22) (i.e., “accelerated rent terms” are not permitted);
that the landlord can seize the tenant’s personal property for rent owing (s 26(3)(a));
terms that impose unreasonable restrictions on guests or impose a fee for having guests stay overnight; or
for a fixed term tenancy, any vacate clauses that require the tenant to move out at the end of the tenancy unless:

The tenancy agreement is a sublease agreement; or
The fixed term tenancy was created in circumstances where the landlord or landlord’s close family plans in good faith to occupy the unit after the tenancy ends, pursuant to RTR s 13.1.

NOTE: The RTR defines “unconscionable” for the purposes of s 6(3)(b) of the RTA as follows: a term of a tenancy agreement is “unconscionable if the term is oppressive or grossly unfair to one party”.

e) Pets

In B.C., there is no law that prevents a landlord from prohibiting pets in rental units. RTA, s 18 allows a tenancy agreement to include terms that prohibit pets or restrict the size, kind, or number of pets a tenant may keep on the residential property. If the agreement is silent about pets, then the tenant should be able to obtain one. If a tenancy agreement doesn’t allow pets and a tenant gets one anyway, the landlord can tell the tenant to remove it. If the tenant refuses, the landlord may be able to give an effective eviction notice. RTA, s 18 is subject to the rights and restrictions under the Guide Dog and Service Dog Act, SBC 2015, c 17, s 3, which states that landlords must not deny tenancy or impose discriminatory terms on a person with a disability who intends to keep a guide dog in the rental unit.

When a landlord permits a tenant to keep a pet after the tenancy has already started, the landlord and tenant together must inspect the condition of the rental unit on or before the day the tenant starts keeping a pet or on another mutually agreed day (RTA, s 23(2)). Failure of the tenant or landlord to participate in the inspection may extinguish the right of the failing party to the rights relating to the pet deposit (s 24). The landlord can request pet damage deposit of no greater than ½ of a month’s rent, regardless of the number of pets.

f) Rent Increases for Additional Occupants

A rental increase for a new occupant can only be imposed if the contract specifically allows for it. Disputes most often arise upon the birth of a baby, as there is no legal mechanism exempting newborn children from being considered tenants.

3. Cannabis Legalization

As of October 17, 2018, personal possession of cannabis became legal within Canada. Accordingly, changes to the RTA were implemented around growing and smoking cannabis.

If a tenancy agreement entered prior to legalization included a “no smoking” clause and did not explicitly allow for smoking cannabis, then the “no smoking” clause is deemed to apply to smoking cannabis. This also applies to any clauses that restrict or regulate smoking. (RTA s 21.1 (2))

(1) For RTA s 21.1 (2), vaporizing a substance containing cannabis is not “smoking cannabis.”

All existing tenancy agreements would be implied to have terms prohibiting growing cannabis unless:

(1) the tenant is growing in or on the residential property one or more cannabis plants that are medical cannabis,

(2) growing the plants is not contrary to a term of the tenancy agreement, and

(3) the tenant is authorized under applicable federal law to grow the plants in or on the residential property, and the tenant follows the requirements under that law with respect to medical cannabis.

NOTE: The RTA allows for landlords and tenants to agree upon terms in new tenancy agreements if they do not violate the RTA.

@@ Line 1: / Line 1: @@
+{{REVIEWED LSLAP | date= August 2, 2023}}
 {{LSLAP Manual TOC|expanded = landlord}}
-== A. Protecting the Tenant ==
-A third party should accompany a potential tenant during a rental unit showing, so there is a witness as to the landlord’s representations made during the  showing. Important: '''Get the landlord’s promises in writing if possible''', but note that landlords are '''not''' obligated to provide them in writing.
+== '''A.	Protecting the Tenant''' ==
-After establishing the tenancy and before the tenant moves their personal possessions into the rental unit, the RTA requires the landlord and tenant to  jointly conduct a condition inspection and fill out and sign the RTB’s Condition Inspection Report. The condition inspection should focus on verifying that the plumbing, electrical and appliances work; mould, and water marks are identified; and all telephone, cable and internet connections are present and functional. The tenant should take photographs at the initial move-in inspection, as well as the move-out inspection. The landlord must provide the tenant with a copy of the Condition Inspection Report within 15 days.
-Fees for cable and internet should be negotiated before the tenancy commences, and included in the Tenancy Agreement.
+A third party should accompany a potential tenant during a rental unit showing, so there is a witness as to the landlord’s representations made during the showing. '''Important: Get the landlord’s promises in writing''' if possible but note that landlords are '''not''' obligated to provide them in writing.
-The Residential Tenancy Branch provides a fillable and printable [http://www.rto.gov.bc.ca/documents/RTB-1.pdf Tenancy Agreement]. TRAC’s website has more  information as well as translations of the Tenancy Agreement forms into Punjabi, and Simplified and Traditional Chinese at http://www.tenants.bc.ca/other-languages.
+After establishing the tenancy and before the tenant moves their personal possessions into the rental unit, the RTA requires the landlord and tenant to jointly conduct a condition inspection and fill out and sign the RTB’s Condition Inspection Report. This report notes the condition of various elements of the rental unit. It is a good idea to take photographs at the initial move-in inspection, as well as the move-out inspection. The landlord must provide the tenant with a copy of the Condition Inspection Report within 15 days.
-== B. General ==
+Fees for cable and internet should be negotiated before the tenancy commences and included in the Tenancy Agreement.
-The “leasehold” or tenancy interest is an estate (a bundle of property rights) of limited duration, which is created and acquired by the “tenant” when a  person capable of granting that interest does so. Such a person (usually called the owner or landlord) conveys to the tenant the right of “exclusive  possession”. The interest that the landlord retains is called the “reversion”, and full possession reverts back to the landlord on the termination of the tenancy.
+The Residential Tenancy Branch provides a fillable and printable Tenancy Agreement at https://www2.gov.bc.ca/assets/gov/housing-and-tenancy/residential-tenancies/forms/rtb1_chrome.pdf.
-The landlord can sell his or her reversion to someone else, who becomes the new landlord and property owner. The tenancy follows the property, not the initial owner, so a tenancy agreement is still binding on a new owner, who is responsible for repaying the initial security and/or pet damage deposit when the tenancy ends (RTA, s 93).
+=== 1.	 Illegal Application Fees ===
-=== 1. Two Methods of Creating a Tenancy Relationship ===
+A potential landlord cannot ask a renter or potential renter for an application fee. If someone has paid an application fee and the landlord will not give it back, one can apply for dispute resolution to have it returned. Applicants will need to know the landlord’s proper name and address and have proof that the fee was paid see ''RTA'', s 15. If a landlord does this as a business practice, the tenant should report this to the director of the RTB, or to the RTB’s Compliance and Enforcement Unit (CEU), who can launch an investigation. (https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/compliance-and-enforcement).
-==== a) By Formal Contract ====
+== '''B.	General''' ==
-A tenancy interest is granted by a contract known as a tenancy agreement or lease. Often the parties will enter into an express agreement (see [[{{PAGENAME}}#C. Contractual Nature of the Tenancy Agreement | Section  III.C: Contractual Nature of the Tenancy Agreement]]). The executed tenancy agreement governing the tenant’s possession may be written, or oral, or both (see the s 1 definition of “tenancy agreement”). To be enforceable, the  elements of a complete contract (offer, acceptance, and consideration) must be present (see [[Chapter 9: Consumer Protection]]).   b)By Implied Contract Every tenancy agreement entered into on or after January 1, 2004 must be prepared in writing by the landlord (RTA, s 12(1)).   Notwithstanding this obligation to prepare the agreement in writing, where a tenant is already in possession of the unit, or where rent has been paid, the law may imply the   existence   of   a   valid   tenancy   agreement   (see Section   III.C.2:   Terms, Covenants,  and  Conditions).  This  type  of  rental  agreement  is  quite  common because  many  tenancies  are  entered  into  on  the  basis  of  an  application  form,  or verbal  consensus,  without  the  existence  of  any  written  contract.  A “tenancy agreement” may be found to exist, notwithstanding the fact that: i)there is no written tenancy agreement; ii)a previously existing agreement has expired or terminated; or iii)there was no previous agreement of any kind. If  the  person  in  possession  pays  rent  or  a  deposit  and  the  landlord  accepts  the payment with the intention of creating a tenancy, an agreement is created. 2.Where Something Other than a Tenancy is Created
+A lease gives the tenant the right to use, enjoy, and dispose of the property for a fixed duration. The landlord has a freehold in reversion, allowing them to sell their property to someone else. A tenancy continues under the same terms when a rental property is sold in BC. The landlord cannot terminate a lease simply because they want to sell the property. Instead, the new owner will take over as the landlord. No new lease is required to be drafted and signed, though this may happen if both parties agree.
+=== 1.	 Two Methods of Creating a Tenancy Relationship ===
+'''a)	By Formal Contract'''
+Although s1 of the Act defines “tenancy agreement" as an agreement, whether written or oral, express or implied, between a landlord and a tenant respecting possession of a rental unit, use of common areas and services and facilities, and includes a licence to occupy a rental unit. Starting January 1, 2004, a landlord must prepare in writing every tenancy agreement that complies with the Act (RTA, ss 13(1), (2)). Like any valid contract, there must be an offer, acceptance, and consideration.
+Vague terms of the tenancy agreement may be framed in the tenant's favour using the principle of contra proferentem (i.e., the agreement will be strictly construed against the party who provided the agreement's wording) and principles of statutory interpretation. The law seeks to recognize and validate the relationship where possible, even where the requirement for a written tenancy agreement has not been met.
+'''b)	By Implied Contract'''
+Notwithstanding this obligation to prepare a written agreement, where there have been offers, acceptance, and some kind of meaningful consideration, the law may imply the existence of a valid tenancy agreement.
+== '''C.	Contractual Nature of the Tenancy Agreement''' ==
+=== 1.	 Freedom of Contract and the Agreement ===
+Parties are free to add and alter the terms, covenants, and conditions subject to common law and statute restrictions. Changes in the tenancy agreement must be in writing, signed and dated by both parties. Unilateral changes may only be enforceable if something is offered or given in return.
+'''a) Collateral Contract'''
+The parties may enter additional or subsequent oral or written contracts on top of the tenancy agreement. If an Arbitrator determines the terms are reasonable and not unconscionable, as defined within s 3 of the RTR, new landlords or tenants that take over or enter into the same tenancy agreement would be bound by the collateral contract. A remedy for the new landlord would be found in an action against the seller. Oral collateral contracts are hard to prove. '''If something is important, it should be recorded in writing.'''
+=== 2.	 Terms, Covenants, and Conditions ===
+'''a) Covenants/Terms'''
+A covenant in a tenancy agreement consists of a promise by a person that a certain thing must or must not be done (the RTA eliminates the word “covenant” and uses the more modern word “term”). A “Material Term”, as used in the RTA, is a term going to the root of the relationship and the tenancy agreement. Landlords and tenants may agree to any term they wish, if it is not unconscionable or contrary to the RTA. Terms contrary to the RTA may not be identified in some cases until dispute resolution, and a tenant is free to argue that a term violates the RTA and should, therefore, be void. The Arbitrator will take this into consideration when determining reasonableness. For more information, see RTB Policy Guidelines 8: Unconscionable and Material Terms.
+'''b) Express, Implied and Statutory Terms'''
+Valid express terms or conditions override any implied terms or “usual terms” that might otherwise apply at common law. For residential tenancies, the RTA deems some express terms to be unenforceable The RTA also establishes statutory terms, deemed to be terms in every agreement, that override any express or implied term to the contrary. For tenancies not governed by the RTA, a court will find implied obligations and insert the usual terms if the parties have failed to expressly agree to certain matters.
+'''c) Express Terms'''
+Parties may write their own tenancy agreement with their own terms or may use a standard form tenancy agreement to which they can add their own extra terms.
+The ''RTA'' requires that all tenancy agreements include standard terms outlining key statutory rights and responsibilities of the tenant and landlord (see ''RTA'' s 12, and the Schedule to the Regulation). The standard terms cover repairs, payment of rent, rent increases, security deposits, assignment or sub-let, occupants and invited guests, entry of the residential premises by the landlord, locks, ending the tenancy, and the application of the ''RTA''. To assist landlords and tenants, the Ministry created a standard Residential Tenancy Agreement, available online (https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/forms). This Agreement incorporates suggestions put forward by landlord and tenant stakeholders and includes the prescribed terms found in the Schedule of the Regulation.
+'''d) Reasonable Terms'''
+Changes in the ''RTA'' allow more ability to agree to any term landlords and tenants wish than the repealed Act did. However, a term of the tenancy is unenforceable if (''RTA'', s 6):
+:(a) the term is inconsistent with this ''RTA'' or the regulations;
+:(b) the term is unconscionable; or
+:(c) the term is not expressed in a manner that clearly communicates the rights and obligations under it.
+See Policy Guideline 8: Unconscionable and Material Terms.
+The following are also examples of express terms that are void and unenforceable:
+* a term purporting to hold that the RTA does not apply to the agreement or attempts to avoid the RTA (s 5(1) and (2));
+* that the rent remaining for the term of the agreement becomes due and payable if a tenant fails to comply with a term of the tenancy agreement (s 22) (i.e., “accelerated rent terms” are not permitted);
+* that the landlord can seize the tenant’s personal property for rent owing (s 26(3)(a));
+* terms that impose unreasonable restrictions on guests or impose a fee for having guests stay overnight; or
+* for a fixed term tenancy, any vacate clauses that require the tenant to move out at the end of the tenancy unless:
+:* The tenancy agreement is a sublease agreement; or
+:* The fixed term tenancy was created in circumstances where the landlord or landlord’s close family plans in good faith to occupy the unit after the tenancy ends, pursuant to RTR s 13.1.
+:'''NOTE:''' The RTR defines “unconscionable” for the purposes of s 6(3)(b) of the ''RTA'' as follows: a term of a tenancy agreement is “unconscionable if the term is oppressive or grossly unfair to one party”.
+'''e) Pets'''
+In B.C., there is no law that prevents a landlord from prohibiting pets in rental units. ''RTA'', s 18 allows a tenancy agreement to include terms that prohibit pets or restrict the size, kind, or number of pets a tenant may keep on the residential property. '''If the agreement is silent about pets, then the tenant should be able to obtain one.''' If a tenancy agreement doesn’t allow pets and a tenant gets one anyway, the landlord can tell the tenant to remove it. If the tenant refuses, the landlord may be able to give an effective eviction notice. ''RTA'', s 18 is subject to the rights and restrictions under the ''Guide Dog and Service Dog Act'', SBC 2015, c 17, s 3, which states that landlords must not deny tenancy or impose discriminatory terms on a person with a disability who intends to keep a guide dog in the rental unit.
+When a landlord permits a tenant to keep a pet after the tenancy has already started, the landlord and tenant together must inspect the condition of the rental unit on or before the day the tenant starts keeping a pet or on another mutually agreed day (''RTA'', s 23(2)). Failure of the tenant or landlord to participate in the inspection may extinguish the right of the failing party to the rights relating to the pet deposit (s 24). The landlord can request pet damage deposit of no greater than ½ of a month’s rent, regardless of the number of pets.
+'''f) Rent Increases for Additional Occupants'''
+A rental increase for a new occupant can only be imposed if the contract specifically allows for it. Disputes most often arise upon the birth of a baby, as there is no legal mechanism exempting newborn children from being considered tenants.
+=== 3.	 Cannabis Legalization ===
+As of October 17, 2018, personal possession of cannabis became legal within Canada. Accordingly, changes to the ''RTA'' were implemented around growing and smoking cannabis.
+*If a tenancy agreement entered prior to legalization included a “no smoking” clause and did not explicitly allow for smoking cannabis, then the “no smoking” clause is deemed to apply to smoking cannabis. This also applies to any clauses that restrict or regulate smoking. (''RTA'' s 21.1 (2))
+::(1) For ''RTA'' s 21.1 (2), vaporizing a substance containing cannabis is not “smoking cannabis.”
+*All existing tenancy agreements would be implied to have terms prohibiting growing cannabis unless:
+::(1) the tenant is growing in or on the residential property one or more cannabis plants that are medical cannabis,
+::(2) growing the plants is not contrary to a term of the tenancy agreement, and
+::(3) the tenant is authorized under applicable federal law to grow the plants in or on the residential property, and the tenant follows the requirements under that law with respect to medical cannabis.
+:'''NOTE:'''  The RTA allows for landlords and tenants to agree upon terms in new tenancy agreements if they do not violate the RTA.
+{{LSLAP Manual Navbox|type=chapters15-23}}