Tenancy Agreements (19:II)

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. 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.

The Residential Tenancy Branch provides a fillable and printable 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.

B. General

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 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. Two Methods of Creating a Tenancy Relationship

a) By Formal Contract

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 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

An agreement or circumstances may create something other than a tenancy. A person may be a tenant at will, a tenant on sufferance, a licensee, or a mere occupant.

An occupant or person in possession who is not a tenant has no agreement with the landlord concerning that possession or occupation. In the case of a licensee or occupant living in a home by permission of a main tenant (when the landlord/owner lives off-site), the main tenant is responsible for all obligations, including paying rent (and utilities if required). If the licensee or occupant is sharing a kitchen or bathroom with the landlord, the parties can seek remedies in Small Claims Court.

3. Formal Requirements

a) Essential Elements of the Agreement

A landlord must prepare in writing every tenancy agreement entered into on or after January 1, 2004 (RTA, s 13(1)). A tenancy agreement must comply with any requirements prescribed in the regulations and must set out all the requirements in RTA s 13(2). These requirements are available at the UBC Law Library, in the LSLAP resource files, or on the RTB website (see contact information in Section I.B.1.b: Resources and Policy Guidelines).

Where these elements are absent, vague, or unclear, the agreement may be void (as a result, no interest would be created). However, if the tenant is in possession and has paid money (i.e. rent) then there is a tenancy agreement. If a tenancy has been created (i.e. the tenant has possession and is paying rent), any vague terms of the tenancy agreement can be framed in the tenant’ s favour using the principle of contra proferentem (i.e. the agreement will be strictly construed against the party seeking to rely on the contract), and perhaps even principles of statutory interpretation. The law seeks to recognize and validate the relationship where possible, even where the requirement to have a written tenancy agreement has not been met. 4.Agreements for Lease (Also Known as Agreements to Lease, or Agreements for Tenancy) “Agreements for tenancy” are executory contracts in which the lessor promises that he or she and the lessee will enter into a written tenancy agreement at a later date. For an executory contract to have effect, generally the agreement must be in writing and must contain the essential elements of a lease. While the law states that the agreement must be in writing, this requirement is not always enforced. Consequently oral agreements may be considered valid. Also, the payment of money may point to the fact that a contract has been entered into. It should be noted that since this is simply an agreement to agree, the RTA does not yet apply. At this point, any money paid is a processing fee, holding deposit, or administration fee. Section 15 of the RTA prohibits fees to consider or process an application for tenancy. If the money paid is part payment of rent or the security deposit (as distinct from a processing fee, holding deposit or administration fee), it is important to clearly identify that on the receipt at the time of payment (see definition of a security deposit). Until the tenant comes into possession, he or she has only a contractual interest, which applies only to “tenancy agreements”. Thus, failure to give the tenant possession is a breach of contract and not a violation of a property interest or breach of a tenancy covenant. When the tenant acquires possession, the agreement for lease is treated as a lease agreement, and the court may order the lessor to execute a lease (specific performance): see Horse and Carriage Inn Ltd. v. Baron, [1975] 53 DLR (3d) 426 (BCSC). Recording the initial exchange of money as “rent”or as “security deposit” is important to create a basic tenancy agreement in situations where