Published On: Tuesday, 12 December 2017

Provincial Government Closes Rent Increase Loophole

Provincial Government Closes Rent Increase Loophole
Regulatory changes by BC's Provincial Government have eliminated a loophole that allowed significant rent increases.

BC - The Government of British Columbia is beefing up protection for renters by closing a loophole that some landlords used to seek inflated and unfair increases in hot rental markets.

On behalf of Municipal Affairs and Housing Minister Selina Robinson, Vancouver-West End MLA Spencer Chandra Herbert announced that government is eliminating the geographic rent increase clause in the Residential Tenancy Regulation and in the Manufactured Home Park Tenancy Regulation.

Renters have been threatened with huge rent hikes under the existing rules, which is a scary situation for any renter, said Herbert, adding that she has been working to stop this practice since 2008. Tenant Ross Waring said he and some neighbouring renters were threatened with huge rent increases — up to 73 percent.

Eliminating the loophole means that landlords will no longer be able to use this clause to seek large rent increases above the allowable annual rent increase limit. The discontinued clause could be invoked when other units in the area rented for higher amounts.

Robinson said there are near zero vacancy rates in many BC communities, thus too many tenants were living in fear of drastic increases to their rent. Eliminating the geographic rent increase clause closed a loophole some landlords had used to impose large rent increases.

Robinson said other measures taken by the provincial government to protect renters include such as closing the fixed-term lease loophole and increasing resources for the Residential Tenancy Branch.

The removal of the geographic rent increase clause came into effect immediately, on Dec. 11, 2017. Changes to fixed-term leases — restricting fixed-term tenancies with vacate clauses, and limiting rent increases between fixed-term tenancy agreements with the same tenant to the maximum allowable amount — also came into effect Dec. 11.

Andrew Sakamoto, executive director of the Tenant Resource & Advisory Centre, said the centre had received complaints that landlords used the threat of excessive geographic rent increases to bully tenants into lesser but still significant increases that exceeded the annual allowable rent increase. For 2018, the allowable rent increase is 4 percent.

Sakamoto said tenants threatened with a 50 percent geographic rent increase would then agree to a 30 percent increase out of fear. He predicted the change would make housing more affordable and secure for the roughly 1.5 million B.C. tenants.

Recent changes by the provincial government to govern the rental market include:

  • Allocating $6.8 million in new funding for the Residential Tenancy Branch to reduce wait times for tenancy disputes;
  • Establishing a new compliance unit to take action against landlords and tenants who are repeat or serious offenders; and
  • Closing a major loophole in fixed-term leases to improve the rights of renters throughout British Columbia;
    Launching a new online application to make it easier and faster for tenants and landlords to apply for dispute resolution.

Each year, the Residential Tenancy Branch receives between 20,000 and 22,000 applications for dispute resolution.