Are Problematic Tenants abusing the system

Below are my thoughts on the petition to change the laws regarding tenancies in BC and why I think they were introduced and won’t be changed.

As a landlord the RTB expects you to have more knowledge of the tenancy laws then tenants. As a licensed property manager in BC the RTB expects you to have more knowledge than the individual owner who is managing their own rental property. These are reasonable expectations. Many of the issues raised here are due to lack of knowledge by the landlords before they become a landlord. 

Is the RTB favourable to tenants?. I advise my clients yes, and the reason is they are trying to not make someone homeless without a valid reason.  A comparable to that would be the banks and mortgages. If you sign a fixed term mortgage with a bank and the next day the rate goes up the bank must honour your rate for the term of the mortgage. Imagine every time the rate changed the banks could change your mortgage. This happens with variable rate mortgages though buyers who sign those are informed of that possibility before making that decision. Variable rates also go down, which is not a positive to the bank, their risk.

What are landlords’ concerns?

1- Tenancy Branch decisions to slow

The petition calls for shorter time frames for the RTB hearings. In general this is a good idea, and the wait times before covid had not really changed for many years, and now that covid is over the times are coming back to those levels. There are two ways to reduce wait times. One is to hire more people, the other is to have fewer hearings.

Hiring more people would increase costs and that would require an increase in direct costs or taxes, which people won’t want. There is a built in wait time to prevent landlords and tenants from abusing the situation just to have someone moved out quickly. 

If more landlords were familiar with the tenancy laws they would not end up in the RTB, reducing the wait times. Landlords feel the RTB is in favour of the tenants and it is. I communicate to my clients it has a mandate of not making someone homeless without good reason. If you read many of the decisions in hearings brought forward by landlords there are many procedural problems identified with their claims. That means they have failed to follow the law. Better education for landlords will reduce the number of claims in the RTB. 

2- Fixed Term Tenancies 

In 2017 the government changed the laws regarding fixed term tenancies. The reason this was changed is due to many landlords abusing the process of increasing rents in excess of the allowable rent increase limits. Many Landlords would require tenants to sign a new lease at a higher rate in order to continue to live in the same property. If they refused then the tenant would have to move. The fixed term tenancy change was brought in to provide tenants with stability to their life. If this is reversed landlords will abuse the system for good tenants when rental rates are increasing rapidly, and cry fould when their tenants move to a lower rate place when rates have decreased. This creates a very unstable rental market, and hinders employers as employees struggle to find housing which creates greater turnover.  

3- Rent Increase

In BC in the 1970’s limits on rental rates were introduced and landlords increased the rent significantly before the limits came into effect. The limits were capped around 10%. In the mid 80’s the limits were removed during a rate of high inflation, and large exodus form the Provice due to lack of employment and affordability. The limits were re-introduced in the early 1990’s and were set at a limt related to the inflation rate. The rates were brought in for various reasons including again to provide stability for tenants and reduce the nomadic movement of tenants, which affects business. When tenants are constantly moving they are more frequently changing employment.  

An unrestricted market of rent increase doesn’t equate to higher rents for landlords. In fact it often equals lower rental rates, higher turnover and higher vacancy rates. Both turnover and higher vacancy rates increase costs to landlords. Currently Vancouver has a vacancy rate close to 1 and this has been the rate for many years. Alberta has a rate of around 4.5 and has lower rental rates for comparable units as competition for units is greater. A lower vacancy rate leads to higher rates at the time or renting the unit.   

4- Collection of unpaid rent

The collection of unpaid rent after a tenant leaves the property is a problem for landlords as tenants are not required to provide information. Having said that, there are people who can find teannts, for a fee and many landlords are unwilling to make the effort to find these tenants. A simple change that could help would be to allow landlords to collect additional personal information including picture identification during the application process. This identificiation could then be used to assist locating these former tenants. 

When a landlord has received a monetary order from the RTB they can collect the funds from the tenants if they can find them. If they are unable to find them there are resources including collection services that can and will find these parties and are able to put these orders on tenants credit ratings. Many landlords are unwilling to take these actions indicating it is an onerous process.   

Creating an insurance or financial pool would need to be for both parties. Meaning many landlords fail to perform their basic duties or repair.  Should the financial pool and insurance be used to pay for repairs that landlords fail to undertake?.

Increasing the security deposit to two months rent will kill the rental market. People will move to other locations where this is not in place. Other places dont have more than one month’s rent for a deposit as it is onerous for a tenant to provide that amount prior to moving into the unit. 

5- Publish Tenancy Branch Decisions

The main reason the names are not published at this time is the lack of trust from the government that landlords will not use this information to discriminate against applicants in the future. Just because a tenant has a claim in the RTB against a landlord doesn’t mean they will be a problem tenant at the next property. Tenants already feel hesitant to make a claim against landlords while they live in the property due to a fear of retribution from the landlord. If the names are published tenants will not make claims or just settle with landlords and move, meaning it is not a fair and equitable system. If names are published then both tenant and landlord names must be published, so tenants can also search for bad landlords.   

Landlords complain that if a landlord files a claim against a tenant bad tenants will cause damage to their property. The awsner to that is, don’t rent to them in the first place. A good landlord will perform proper due diligence and keep communication open during the term of the tenancy making the tenants feel comfortable asking the landlord for assistance.   

Privacy laws in BC prevent landlords from discriminating against a party who has a criminal record PIPA regulations. When in doubt don’t rent to the party.   

6- Reduce cost of Eviction 

Eliminating the process of filing in court the order from the RTB and hiring a bailiff would lead to many confrontational situations that will not end well. Having the police attend instead of a bailiff is a waste of police resources and would in the end be more costly. The owner should be responsible for these costs as it is their “business”. The RTB is not the legal court and this is suggesting we circumvent the legal reights of individuals. I advise my clients it is comparable to not paying your mortgage with the bank. If you miss one payment they don’t repossess your house in five days. Many landlords fail to understand they are running a busines and there are inherent risks to running any business. Retail owners must repair broken storefront glass, when they didn’t break it.    

7-Definition of Close Family Member

The reason behind a tight definition of close family member is, how do you verify that the person who moved in is actually a third cousin, blood relative of the owner. This is already abused even though there are significant penalties for not following the law. This may have been a solution if the government didn’t remove the restrictions in the strata property act to allow more housing to be used by family members. This would just become an excuse to move more tenants out of properties.   

8- Notice and Compensation

The reasoning behind this is to provide the tenants the ability to have the funds to pay for the security deposit they are renting. It may seem unfair to the landlord, but the only reason the tenant is moving in these situations are landlords requesting they vacate the property, having the tenant to incur moving costs they were not anticipating to have. When the tenant vacates the property the landlord has every right to rent the property the very next month the tenant vacates, losing no rental income.  

If the tenant withholds the rent and causes damage there are processes in place for landlords to recover that compensation. Many landlords are lazy and unwilling to follow through on these processess. 

9- Abandonment of Property 

This I agree needs to be amended. There is a process in place for tenants when vacating the property and the requirement of them to remove all belongings. If after they have vacated the property and there are belongings left behind landlords should be allowed to do with it as they wish. They should not need to incur further costs to store these items. Having said that, if they do, these costs can be added to a claim in the RTB to recoup the costs.  

10- Make Service of Documents Easier 

It took many years for the laws to change allowing email to be a form of communication. Adding text messaging and social media would be difficult to monitor as well. Social media accounts are always changing and often don’t even use the parties legal names. Text messaging is not the best format for sending documents which is part of the process of filing for a hearing. It would be hard to send a hearing package through texting and social media apps.

If you are at a hearing you have the required address for service, as there is a requirement to send the hearing package to the tenant in order for the hearing to proceed, which eliminates the need for having both parties provide a forwarding address. It could be neccessary if the tenant has moved from the location where the hearing package was sent and in that case it should be part of the decision process. Both landlords and tenants’ addressess should be part of the hearing decision delivered to each party.  

In my opinion many landlords fail to understand the basic fundamental of being a landlord is that you are operating a business. They don’t treat it like a business and then wonder why they are having a negative experience. 

Landlords should have the objective of having a positive experience for both the tenants and themselves during the tenancy. Positive doesn’t mean you are entitled to the maximum allowable rent at all times. Like any other business there are ups and downs, costs and laws are always changing. Businesses adapt to the changes as they go along. 

I would like to see the government create a basic testing system for landlords to take before renting their own property to increase the education level of self managing landlords. This won’t happen though it is worth considering. 

Need assistance managing your rental property. 

Cartref Properties can assist you, call today to discuss your needs. 

You can find more information about us at: www.cartrefproperties.com