Navigating New Residential Tenancy Regulations Effective July 18

On July 18th, important changes to the Residential Tenancy Act came into effect. These changes were introduced by the Provincial Government to protect residential tenants from landlords who end tenancies in bad faith. Currently, property owners (landlords) are required to give their tenants 60 days’ notice of their intention to use the property for personal use. This right to give notice to tenants in a month-to-month tenancy also extends to the buyer of the property who needs to occupy the property.

Once the buyer of a seller’s property is in a contract with the seller and has removed all their subjects, the buyer can request that the seller (landlord) give notice to the tenant to end the tenancy if the use is required for personal use. Landlords should be aware that these changes are significant and should take care to comply, as landlords have specific new requirements and increased penalties for non-compliance.

Key Changes Effective July 18th, 2024:

  1. New Web Portal for Notice to End Tenancy:

    • Landlords must now use a new web portal to generate a notice to end tenancy for personal or caretaker use.
    • Landlords will need to set up an ID to use the system and provide details about the persons moving into the home.
    • These details will be shared with the tenant to create more transparency in the process.
    • The system will remind landlords of the required conditions for ending a tenancy and the penalties associated with ending one in bad faith.
    • "Bad faith" can be described as an intentional dishonest act by not fulfilling legal or contractual obligations, misleading another, entering into an agreement without the intention or means to fulfill it, or violating basic standards of honesty in dealing with others.
    • Some dishonest landlords have used their ability to evict their tenants for personal use to evict them with the intention of renting the home to another tenant at a higher rent.

  2. Extended Notice Period:

    • The notice period required for landlords to give their tenants has been extended from 2 months to 4 months.
    • This extended notice period has significant implications for sellers and buyers of tenanted properties.
    • Landlords have the right to reoccupy their homes or sell them to a buyer who wishes to move in for personal use.
    • The extended notice period creates uncertainty for buyers, especially when considering financing which is often approved for only 90 days (mortgage commitment and rate guarantee).

Scenario Example:

  • A buyer purchasing a tenanted property in mid-July would likely have subjects/conditions requiring 10 days to 2 weeks to fulfill.
  • The landlord cannot give notice to end tenancy for the personal use of the buyer until all conditions are removed and the transaction is firm, usually by the end of July.
  • Counting 4 months from the end of July: August, September, October, November. The buyer buys in July and moves in December if the tenant does not dispute the notice.
  • The tenant’s time frame to dispute the notice has been extended from 15 days to 30 days, potentially delaying the process further.

Considerations:

  • Licensees must devise provisions within the contract of purchase & sale to address potential disputes and delays.
  • Closing/possession dates might need to be extended, but the length of the extension is uncertain due to backed-up dispute resolution proceedings and the potential for tenants not vacating as required.
  • The provincial government's measures to address bad-faith evictions aim to protect tenants but also create challenges for landlords and buyers.
  • Landlords should be aware that even if they give notice to end tenancy in good faith and their circumstances change, the Residential Tenancy Act expects the landlord to occupy the property for at least 12 months.
  • Penalties for bad faith evictions can be up to 12 months of rent.

Conclusion:

Landlords must navigate these new regulations carefully to avoid penalties and ensure compliance. The changes aim to protect tenants but add complexity and uncertainty for landlords and buyers of tenanted properties.


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Warmest regards,

Deborah Moore

Broker Owner

RE/MAX Orchard Country