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VICTORIA, B.C. — Municipal Affairs and Housing Minister Selina Robinson announced today that the provincial government has tabled legislation to close a loophole in fixed-term leases.
Under current rules, landlords are only allowed to increase rental rates by certain percentage set by the government every year. That applies to both fixed-term leases and month-to-month renters. However, if a fixed-term lease includes a clause that requires a tenant to move out on the day that lease expires, then tenants wanting to stay need to sign a new lease at a reassessed rate.
If passed, the amendments will: restrict a landlord’s ability to use a vacate clause in fixed-term agreements to certain circumstances only; and limit rent increases between fixed-term tenancy agreements with the same tenant to the maximum annual allowable amount, which is currently two percent plus inflation.
Robinson says the new legislation will mean landlords can no longer use that loophole to bypass annual rent control, meaning renters will now be protected against massive rent hikes at the end of a lease.
“We are protecting the rights of renters who, for too long, have been left open to unfair and unjustified rent increases,” said Robinson, introducing amendments to the Residential Tenancy Act and Manufactured Home Park Tenancy Act. “By closing this loophole, renters will know they’ll be able to stay in their homes without the threat of skyrocketing rents.”
“Our top priority is eliminating fixed-term tenancies with vacate clauses,” said Andrew Sakamoto, executive director, Tenant Resource and Advisory Centre. “This type of agreement is increasingly being used by landlords wanting to circumvent rent controls and evict tenants for reasons outside of the Residential Tenancy Act – practices that do not align with the spirit and intent of the legislation. We look forward to the provincial government closing this harmful loophole that is exacerbating our rental housing crisis.”
The new rules will apply to both new and existing tenancy agreements.
The ministry has consulted with key stakeholders to identify circumstances where a landlord will be permitted to use a vacate clause in fixed-term tenancy agreements. Among the examples are:
- A person might need to rent out their home during an extended absence for work or travel but has firm plans to return on a particular date; and
- A tenant needs to sublet a rental unit for a set period of time.
There are two situations involving existing fixed-term tenancy agreements where a vacate clause can still be enforced. If, before the day the legislative amendments were introduced:
- A landlord, expecting their tenant to move out at the end of the term, has already entered into a tenancy agreement with a new tenant; and
- A landlord was granted an order of possession requiring a tenant to vacate the unit, but the possession order has not yet taken effect.
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