And What Landlords, Buyers, and Tenants Should Know

The Residential Tenancy Act in BC has recently undergone some significant changes impacting landlords, buyers, and tenants. This is not an exhaustive breakdown of the changes but these are the key changes that could affect the everyday real estate transaction.

Notice Periods
The most significant change is the extended notice period for tenants. Landlords are now required to give a four-month notice to vacate for personal or caretaker use, up from the previous two months. This change came into effect on July 18th, 2024.

It's important to note that notice is still effective on the final day of your rental period (the day before rent is due). So, if you are in a month-to-month lease paying rent at the beginning of the month and receive notice on September 10th, you won't be required to vacate until January 31st, 2025.

However, it seems the Government of BC acted recklessly by announcing these changes without properly consulting the industries impacted. Initially, the four-month notice period also applied to landlords serving notice on behalf of new buyers intending to move into the home and requesting vacant possession. The issue with including primary residence purchases is that rate holds—when a buyer’s lender pre-approves them at a certain interest rate—are typically valid for only 90-120 days, with rare exceptions. For example, if a buyer was just pre-approved at the end of August, their rate hold would expire by the end of December, leaving them vulnerable to rate shifts that could affect their mortgage qualification. Unfortunately, major banks, being national entities, are unlikely to adjust their policies based on one province’s legislative changes so they would not provide any workarounds. While I understand their intention to enhance tenant protections, the originally introduced extended notice period would disproportionately penalize first-time buyers, who have no options to bridge their mortgage from an existing property. 

The solution? After lobbying from mortgage brokers and the real estate industry, the BC Government announced an amendment reducing the notice period for landlords instructed to provide notice for a purchaser when they or their close family member will live in the property, from four months to three months. This amendment was effective August 21st.

So, if you are in a month-to-month lease and your landlord, after a buyer has removed subjects and instructed them to provide notice to vacate, serves that notice on September 2nd, you would be required to vacate by December 31st, 2025.

Fixed-term tenancies can be served notice to vacate, but the three-month notice still applies, and the effective date to vacate cannot be before the end of their fixed term.

Web Portal: A New Tool for Transparency
Landlords are now required to use the Landlord Use Web Portal to generate the Notice to End Tenancy. This creates a tool for regulators to register and track evictions, increasing transparency in the process. Additionally, notices generated due to a new buyer requesting vacant possession will now require a copy of the Contract of Purchase and Sale to be included.

Initial Length of Use
They have increased the length of time a landlord must use a rental unit for personal or caretaker use following the eviction of a former tenant. This period is up from 6 months to 12 months. If a landlord fails to demonstrate personal use or caretaker use for 12 months, they may be liable to pay an evicted tenant 12 months’ rent as compensation.

Dispute Period
The deadline for a tenant to dispute has also increased to;
-21 days when receiving 3 months notice
-30 days when receiving 4 months notice.

The clock starts as soon as the notice is deemed received. (more info about serving notice here)

Landlords: Navigating the New Landscape
Even with the latest amendment reducing notice to three months, selling a unit with a tenant has gotten stickier. Currently, inventory is above seasonal averages, and most investors are on the sidelines due to high interest rates which means the active buyers are looking for vacant possession not taking over tenants.

Landlords should be aware of the challenges they may face when selling a tenanted property, including:
-smaller buyer pool due to expiring rate holds, risks assuming tenancy
-long completion
-not staged well
-inflexible showing times

In a busier market, your property will still move, but what are you leaving on the table?
In slower markets, your property sitting on the market will only lead buyers to look for more of a deal.

Buyers: Understanding the Risks
Don't shy away from a property just because it is tenanted, but make sure you understand the risk of buying a tenanted property. If you're getting good value, need a long completion, or have found a unique property then I understand but otherwise, why deal with the additional stress of a tenanted property?

Tenants: Leverage the New Rules
Yes, your notice period has extended, which is valuable to help you find a home in a typically terrible rental market. But the blessing in this amendment is your increase in leverage. Once you know of your landlord’s intention to sell; using the knowledge that a vacant home will sell easier, you may be able to get more than the Tenancy Act entitles you to...
How you ask?

Cash for Keys, baby! A Potential Win-Win Solution
The term "Cash for Keys" refers to an agreement where a tenant agrees to vacate a property on a specific date in exchange for a payment from the landlord. This arrangement can be beneficial for both parties:

Sellers/Landlords  have a vacant property that they can stage and market which will no longer deter buyers who are averse to the completion length.

Tenants could leave on their own terms with more money in their pocket to help ease the cost of moving and off-set your potential increase in rent.

Final Thoughts
These changes to the Residential Tenancy Act have shifted the landscape for landlords, buyers, and tenants in BC. It's important to be informed about these changes and understand how they may impact your real estate decisions and the best way to make sure you stay informed is to work with a professional that is on top of the latest regulations and helps you make informed decisions.

https://calendly.com/kadelacasse_realtor/

Again, this is not an exhaustive breakdown; you can find much more information regarding Bill 14 by typing "bill 14 residential tenancy act" into your favourite search engine.

Announced the morning of Oct 16, 2023;
The latest housing legislation introduced by the province is aimed specifically at short term housing within the province as municipalities across the BC deal with long term rental shortages causing record increases in monthly rent. 

The Gov't of BC plans to phase-in the legislation over 2 years. You can find the full details at the link below but here are my highlights;

1. Primary Residents Only: The legislation appears to restrict short-term rentals to primary residents, meaning those who live in the property as their main residence. Secondary suites on the same property may be allowed for short-term rentals.

2. Fines and Data Sharing: The legislation includes provisions to increase fines for operators of short-term rentals. It also requires platforms such as Airbnb and VRBO to share data with local and provincial government authorities, which can help in monitoring and enforcement.

3. Host and Platform Registry: The province plans to establish a provincial host and platform registry by late 2024, which is aimed at enhancing accountability in the short-term rental market.

4. Compliance and Enforcement Unit: A provincial short-term rental compliance and enforcement unit is to be set up. This unit will be responsible for ensuring that the rules and regulations are followed by short-term rental operators.

Enforcement is a significant concern, as many cities, including Vancouver, already have bylaws that are stricter than the ones introduced in this Act. Vancouver, for instance, requires short-term rental operators to be primary residents, have a business license, and restricts the rental of secondary suites unless they are the primary residence. However, enforcement has been a challenge in these municipalities and they have been asking the province for assitance.

The BC Hotel Association's report, authored by McGill University Professor Dr. David Wachsmuth, released in September 2023 highlights that a significant portion of short-term rental revenue comes from commercial operators who do not live in the properties they rent out. If the province can effectively enforce the new regulations and penalize violators, homes could return to the long-term rental market, alleviating a bit of the pressure related to long-term rental shortages and rising monthly rents in major municipalities. 

To stay informed on the latest, make sure to sign up for my newsletter.

Kade

To learn more about new short-term rental rules in B.C., visit: https://gov.bc.ca/ShortTermRentals

Full "The housing impacts of short-term rentals in British Columbia’s regions" report found here:
https://upgo.lab.mcgill.ca/publication/strs-housing-bc-2023-summer/Wachsmuth_BC_2023_08_10.pdf

And What Landlords, Buyers, and Tenants Should Know

The Residential Tenancy Act in BC has recently undergone some significant changes impacting landlords, buyers, and tenants. This is not an exhaustive breakdown of the changes but these are the key changes that could affect the everyday real estate transaction.

Notice Periods
The most significant change is the extended notice period for tenants. Landlords are now required to give a four-month notice to vacate for personal or caretaker use, up from the previous two months. This change came into effect on July 18th, 2024.

It's important to note that notice is still effective on the final day of your rental period (the day before rent is due). So, if you are in a month-to-month lease paying rent at the beginning of the month and receive notice on September 10th, you won't be required to vacate until January 31st, 2025.

However, it seems the Government of BC acted recklessly by announcing these changes without properly consulting the industries impacted. Initially, the four-month notice period also applied to landlords serving notice on behalf of new buyers intending to move into the home and requesting vacant possession. The issue with including primary residence purchases is that rate holds—when a buyer’s lender pre-approves them at a certain interest rate—are typically valid for only 90-120 days, with rare exceptions. For example, if a buyer was just pre-approved at the end of August, their rate hold would expire by the end of December, leaving them vulnerable to rate shifts that could affect their mortgage qualification. Unfortunately, major banks, being national entities, are unlikely to adjust their policies based on one province’s legislative changes so they would not provide any workarounds. While I understand their intention to enhance tenant protections, the originally introduced extended notice period would disproportionately penalize first-time buyers, who have no options to bridge their mortgage from an existing property. 

The solution? After lobbying from mortgage brokers and the real estate industry, the BC Government announced an amendment reducing the notice period for landlords instructed to provide notice for a purchaser when they or their close family member will live in the property, from four months to three months. This amendment was effective August 21st.

So, if you are in a month-to-month lease and your landlord, after a buyer has removed subjects and instructed them to provide notice to vacate, serves that notice on September 2nd, you would be required to vacate by December 31st, 2025.

Fixed-term tenancies can be served notice to vacate, but the three-month notice still applies, and the effective date to vacate cannot be before the end of their fixed term.

Web Portal: A New Tool for Transparency
Landlords are now required to use the Landlord Use Web Portal to generate the Notice to End Tenancy. This creates a tool for regulators to register and track evictions, increasing transparency in the process. Additionally, notices generated due to a new buyer requesting vacant possession will now require a copy of the Contract of Purchase and Sale to be included.

Initial Length of Use
They have increased the length of time a landlord must use a rental unit for personal or caretaker use following the eviction of a former tenant. This period is up from 6 months to 12 months. If a landlord fails to demonstrate personal use or caretaker use for 12 months, they may be liable to pay an evicted tenant 12 months’ rent as compensation.

Dispute Period
The deadline for a tenant to dispute has also increased to;
-21 days when receiving 3 months notice
-30 days when receiving 4 months notice.

The clock starts as soon as the notice is deemed received. (more info about serving notice here)

Landlords: Navigating the New Landscape
Even with the latest amendment reducing notice to three months, selling a unit with a tenant has gotten stickier. Currently, inventory is above seasonal averages, and most investors are on the sidelines due to high interest rates which means the active buyers are looking for vacant possession not taking over tenants.

Landlords should be aware of the challenges they may face when selling a tenanted property, including:
-smaller buyer pool due to expiring rate holds, risks assuming tenancy
-long completion
-not staged well
-inflexible showing times

In a busier market, your property will still move, but what are you leaving on the table?
In slower markets, your property sitting on the market will only lead buyers to look for more of a deal.

Buyers: Understanding the Risks
Don't shy away from a property just because it is tenanted, but make sure you understand the risk of buying a tenanted property. If you're getting good value, need a long completion, or have found a unique property then I understand but otherwise, why deal with the additional stress of a tenanted property?

Tenants: Leverage the New Rules
Yes, your notice period has extended, which is valuable to help you find a home in a typically terrible rental market. But the blessing in this amendment is your increase in leverage. Once you know of your landlord’s intention to sell; using the knowledge that a vacant home will sell easier, you may be able to get more than the Tenancy Act entitles you to...
How you ask?

Cash for Keys, baby! A Potential Win-Win Solution
The term "Cash for Keys" refers to an agreement where a tenant agrees to vacate a property on a specific date in exchange for a payment from the landlord. This arrangement can be beneficial for both parties:

Sellers/Landlords  have a vacant property that they can stage and market which will no longer deter buyers who are averse to the completion length.

Tenants could leave on their own terms with more money in their pocket to help ease the cost of moving and off-set your potential increase in rent.

Final Thoughts
These changes to the Residential Tenancy Act have shifted the landscape for landlords, buyers, and tenants in BC. It's important to be informed about these changes and understand how they may impact your real estate decisions and the best way to make sure you stay informed is to work with a professional that is on top of the latest regulations and helps you make informed decisions.

https://calendly.com/kadelacasse_realtor/

Again, this is not an exhaustive breakdown; you can find much more information regarding Bill 14 by typing "bill 14 residential tenancy act" into your favourite search engine.

Announced the morning of Oct 16, 2023;
The latest housing legislation introduced by the province is aimed specifically at short term housing within the province as municipalities across the BC deal with long term rental shortages causing record increases in monthly rent. 

The Gov't of BC plans to phase-in the legislation over 2 years. You can find the full details at the link below but here are my highlights;

1. Primary Residents Only: The legislation appears to restrict short-term rentals to primary residents, meaning those who live in the property as their main residence. Secondary suites on the same property may be allowed for short-term rentals.

2. Fines and Data Sharing: The legislation includes provisions to increase fines for operators of short-term rentals. It also requires platforms such as Airbnb and VRBO to share data with local and provincial government authorities, which can help in monitoring and enforcement.

3. Host and Platform Registry: The province plans to establish a provincial host and platform registry by late 2024, which is aimed at enhancing accountability in the short-term rental market.

4. Compliance and Enforcement Unit: A provincial short-term rental compliance and enforcement unit is to be set up. This unit will be responsible for ensuring that the rules and regulations are followed by short-term rental operators.

Enforcement is a significant concern, as many cities, including Vancouver, already have bylaws that are stricter than the ones introduced in this Act. Vancouver, for instance, requires short-term rental operators to be primary residents, have a business license, and restricts the rental of secondary suites unless they are the primary residence. However, enforcement has been a challenge in these municipalities and they have been asking the province for assitance.

The BC Hotel Association's report, authored by McGill University Professor Dr. David Wachsmuth, released in September 2023 highlights that a significant portion of short-term rental revenue comes from commercial operators who do not live in the properties they rent out. If the province can effectively enforce the new regulations and penalize violators, homes could return to the long-term rental market, alleviating a bit of the pressure related to long-term rental shortages and rising monthly rents in major municipalities. 

To stay informed on the latest, make sure to sign up for my newsletter.

Kade

To learn more about new short-term rental rules in B.C., visit: https://gov.bc.ca/ShortTermRentals

Full "The housing impacts of short-term rentals in British Columbia’s regions" report found here:
https://upgo.lab.mcgill.ca/publication/strs-housing-bc-2023-summer/Wachsmuth_BC_2023_08_10.pdf