Mutual Agreement to end Tenancy
There are many ways to end a tenancy, one overlooked option is the mutual agreement to end tenancy. A mutual agreement to end the tenancy is simply an agreement between the Landlord and Tenant to end the tenancy on a specific date.
When should this agreement be considered? It may be used when a tenancy is frustrated and both parties are unable to agree how to correct the disagreement. I have used it in the past when a tenant obtained a pet without permission from the Landlord, which was in violation of the tenancy agreement. The tenant wanted to keep their pet, which required them to find a different rental and they agreed to move out at a mutually agreed upon date. The tenant found a new place to live and the owner was able to have the property back to rent to a new tenant without a pet.
Landlords have asked can we sign a mutual agreement to end the tenancy at the same time we sign the lease? The Residential Tenancy Branch identifies this as inappropriate. Why is this not allowed? In the standard tenancy agreement in BC there is a section where the landlord must identify if the rental is for a fixed term, and what happens at the end of that term. A landlord is only allowed to have a fixed term where the tenant must vacate at the end of the term when the landlord has plans to move back into the property. If they are not reoccupying the property then it would be identified as becoming a month to month tenancy from that point on. Trying to use the mutual agreement to end tenancy stating this date would be circumventing the process of landlord use for vacating a tenant. The Residential Tenancy Branch doesn’t agree with situations that are attempting to find ways around the statute.
There are benefits for both parties to mutually agree on the end of the tenancy. Tenants know they have time to look for alternative living accommodations. Landlords are able to plan for when the tenants vacate the unit. If the unit needs repairs or updating they can begin to make arrangements to have that completed as soon as the tenants vacate. Landlords are able to begin searching for a new tenant knowing when the current tenancy will end.
A benefit of the mutual agreement is it is a less adversarial process and both parties know the end is coming, reducing tension between the two parties. If you have frustrated tenancy consider approaching the tenants, or Landlords and mutually agree to move on.
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Owner repairs
When a tenant moves into a rental property a condition inspection should be completed to identify the condition of the property at that time. During the tenancy there may be some repairs required, some are to be completed by the tenant and others should be completed by the landlord.
The Residential tenancy branch has a guideline that includes items that should be paid for by the landlord. They included things like painting, carpet cleaning and duct cleaning to mention a few. It’s important that an owner understands what they are responsible for when being a landlord.
The guidelines say a landlord is required to paint the rental unit at regular intervals. This doesn’t mean a landlord must paint after every tenancy. It also means a landlord can’t make as part of the tenancy agreement that a tenant is required to paint the property. The only time a tenant is required to paint is to repair damage to a wall or return a wall to an original colour due to the tenant painting the unit without permission. The same can be said for carpets, blinds, appliances, window coverings and many other items in the rental property.
The landlord is required to provide clean carpets at the beginning of the tenancy. It is then expected the tenants leave the carpets in the same condition. During the tenancy this would be a tenants responsibility to clean them not the landlords.
Appliances are also items that must be in working order at the start and repairs are the owners responsibility unless it is clear the tenants actions have caused the item to malfunction. If the light bulb on the oven goes out the bulb should be replaced by the tenants because if they never turned it on it won’t burn out. If the elements stop working that is different. It is unreasonable to expect that an oven element which fails over time is caused by the tenants’ use directly. This would be an owner repair.
In houses one often confusing item is the servicing of a furnace heating system. The guidelines require the heating system be serviced by the landlord as per the manufacturer's specifications, or annually when manufactures specifications are not available. It is the Landlords responsibility to change or at least provide filters for the tenants to change on a regular basis. These are costs a tenant is not required to pay for. Cleaning of the ducts is not heating the home and therefore falls under the tenants requirement to clean the ducts.
It is the landlord's responsibility to provide a property that meets health, safety and housing standards established by law. Failing to provide a property in this condition may provide a tenant the opportunity to apply to the Residential Tenancy Branch for repairs to be completed at the owners cost. Landlords should review the Residential Tenancy Guideline- Responsibility Residential Premises.
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Cartref Properties specialises in managing rental units located within Strata Corporations.
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Why inspections are important.
As a property management company Cartref Properties offers all our clients two inspections annually as part of our services. We have had clients ask us to reduce our fees by eliminating the inspections as they feel they are not needed. We have refused to take on these properties because we feel the inspections have an important value in property management.
Performing inspections during a tenancy is often overlooked for its importance in ensuring a positive tenancy. Potential clients have indicated they don’t need inspections because the tenant always pays the rent on time. There are three stages of a tenancy, in suite inspections are part of stage two, management of the property.
An inspection provides multiple options for a landlord to engage with the tenant in a positive manner. Often tenants are reluctant to inform the landlords of potential repairs required, partly in fear the landlord may charge them for the cost of the repairs. They also fear the landlord will take the opportunity to identify something they are doing wrong in the tenancy and try to evict them. We communicate clearly to “applicants” that we perform these inspections for multiple reasons. One is to be proactive with potential repair issues, and the other is to ensure the tenants are following all the clauses of the tenancy agreement which includes not doing anything illegal.
Tenancy agreements have many different clauses and payment of rent is only one of them. Other common clauses are no pets, no subletting and no smoking. One is unable to determine if tenants have not acquired pets, is the correct person residing in the property or the tenant is not smoking by collecting rent alone. Performing regular inspections provides Landlords the opportunity to verify all the terms of the tenancy agreement are being met.
With the development of short term accommodations I have heard of cases where people rent a property to an individual, who then turns and rents it through short term accommodation websites. If this is in a Strata Corporation which prohibits short term accommodations, you the Landlord may be considered in violation of the bylaws and subject to fines imposed by the Strata Corporation. Performing regular inspections provides owners the opportunity to verify tenants who aren’t adhering to all the terms of a tenancy agreement.
Owners often say it’s a waste of time to perform inspections as tenants must be informed prior to the inspection. Tenants have the right to be informed of the inspection. During an inspection one can usually identify contraventions of the tenancy agreement by observing how the occupant is living. A person staying short term will live differently then a person who is residing there permanently.
During the inspection process it is best to not point out all the concerns you have at that time, make notes for later reference. If the unit is messy, you can make a comment, or ask a question if you see someone there you're not familiar with. Violations of the tenancy agreement should be put in writing which provides tenants the opportunity to respond to the issue. It also documents the issue for future reference in the event there is a need to attend a hearing.
If you suspect an issue but are unsure, continue to perform inspections until you find the information you require. Section 29 of the Residential Tenancy Act permits Landlords permission to inspect a rental unit monthly. Tenants who aren’t in violation of the agreement are usually receptive and welcome inspections.
Our experience is when you are proactive with communication, the tenants are more receptive to the inspections. They are prepared, meaning they keep the property clean for the inspection, if only for that day, they have taken the time to clean the property which is difficult to do if they don’t live there or are not naturally clean people. They are more willing to share information about repair needs, which if you fix them before they completely fail will reduce costs for repairs. Better communication with tenants also leads to more receptiveness of rent increases. If they see you are maintaining the property they understand better there is a cost to keeping up the property. We find better communication with all these issues leads to a positive tenancy.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specialises in managing rental units located within Strata Corporations.
“Helping owners find tenants a place they call home”
www.cartrefproperties.com
Fixed Term Lease
In 2017 the BC Provincial Government made a change to the Residential tenancy regulations regarding fixed term tenancies. Section 97.2 a.1 outlines when a fixed tenancy can include a term requiring a tenant to vacate the property at the end of the tenancy.
Before the change in 2017 a landlord could have a tenant sign a fixed term tenancy agreement which required the tenant to vacate the property at the end of the term. When rents are increasing a fixed term was used by landlords to increase rents beyond the allowable limits outlined by the government. Landlords would request tenants sign a new lease at a higher rate to continue residing at the property, or have tenants move out so landlords could rent to another tenant for a higher rate. The 2017 change limits when a fixed term clause can be used. Section 13.1 of the residential tenancy regulations identifies two requirements for a fixed term clause. One the landlord must be an individual, second the person moving into the rental unit after the tenant vacates must be a close family member as defined in section 49 of the Residential Tenancy Act. A close family member is identified as a parent, spouse or child of the owner. Or the parent, child or spouse of the spouse of the owner.
The only reason a landlord can have a fixed term that requires the tenant to vacate the property at the end of the tenancy is for the landlord's use. This is similar to the two month notice to vacate for landlord’s use and requires landlords occupy the property for a minimum of 6 months before being able to rent the property to other tenants. Failing to meet this occupancy requirement could result in a claim by a past tenant for compensation to a maximum of 12 months rent.
If you have a fixed tenancy agreement and are an individual owner your tenant may have a right to not vacate the rental unit at the end of the fixed term. This prevents landlords from manipulating the tenancy to increase the rent above the allowable limits provided by the provincial government. Before signing a fixed term tenancy agreement with your tenants review these sections of the Residential Tenancy Act and Regulations to ensure you are in compliance.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specialises in managing rental units located within Strata Corporations.
www.cartrefproperties.com
Stage three of the tenancy, the ending of a tenancy.
A tenancy can end in many ways, the most common is when the tenant provides notice to vacate the property. After a tenant provides notice there are steps the Landlord must take to complete the tenancy. Here we are going to talk about the move out inspection process.
Tenants are required to provide notice with specific details which include the following, Tenants name, Date, Address of the property, date they are leaving and their signature. This suggests the notice must be in writing, which in today's world can be by email, text or other electronic communication as well as pen and paper. The first thing a Landlord must do is acknowledge the tenants notice to vacate.
Many tenants today provide notice electronically through email, text msg or other technology. As a landlord it is important to reply to this message and respond identifying you have received the notice on the specified date acknowledging when it was received. This could be important if the notice is sent after a time frame when the notice should be provided. In BC your tenants are required to provide a full calendar month notice to vacate the property. If the notice is received after this specific time, you as the landlord may be entitled to unpaid rent for the next month as notice was not provided in the appropriate time frame.
After acknowledging to the tenants the notice is received the landlord is required to schedule a move out inspection to complete the move out report with the tenants. A Landlord must make at least two attempts to schedule the move out inspection. The Residential Tenancy Act in BC states tenants are required to vacate the property by 1pm on the last day of the tenancy. If the end of the month is June 30th then they must vacate by 1pm on June 30.
Send the tenants a letter, email or our preferred method a calendar invite to a meeting to complete the move out inspection scheduled for June 30 at 1pm. By sending the calendar invite the tenants can reply by accepting the invite, which means they have agreed to the time of the meeting, and you receive an electronic confirmation of their acceptance.
If they don’t accept the invite then you must make a second attempt to schedule a meeting for the move out. Often the original time which is set may be changed with both parties agreeing. Using the electronic communications provides a reply that can be used as confirmed communication for the move out inspection. Failing to meet or making two attempts may lead to concerns with the Residential Tenancy Branch if the situation ends up in a hearing. It would be viewed by the Residential Tenancy Branch as the landlord failing to meet their obligations.
What happens if the tenant doesn’t respond to the meeting requests or doesn't show up to the move out. The landlord should complete the report on that date they had arranged without the tenant present. On the move out form there are two important sections, one identifies the costs that a Landlord thinks the tenant should be responsible for, including damage and cleaning costs, replacement of lost key or fobs, and the tenant and landlord must agree or disagree this amount should be kept from the damage deposit. When there is a disagreement the Landlord must file with RTB within fifteen days to retain any portion of the damage deposit funds.
The other important section is where the tenant provides their forwarding address, which is required for them to provide if they want to receive the damage deposit. Tenants may provide the forwarding address in a different format, or after they left the property, and the landlord should enter it on the move out form when it is received.
When there is a dispute regarding the amount of deposit to be returned then the Landlord must file a claim with RTB to keep a portion or all of the deposit funds. The deposit must be returned or a claim filed within 15 days of the end of the tenancy when you have the tenant’s forwarding address. When a tenant emails their forwarding address on the tenth day after they left the property a Landlord has five days left to return it or file a claim. It would be beneficial to have the move out form completed to submit as evidence for your claim and not have to rush around to find the details in that short period of time. Failing to return the deposit within fifteen days could result in the tenant having the right to request double the deposit be returned.
When Cartref Properties receives a notice to vacate we acknowledge the notice, send a letter with our cleaning checklist which forms part of the tenancy agreement, expectations of how the property should be cleaned, and then send an invite to a meeting for the move out inspection. Missing these steps can result in difficulties with a hearing with the Residential Tenancy Branch.
Need assistance managing your rental property? contact us for an evaluation of your needs.
Cartref Properties specializes in managing rental units located within Strata Corporations.
www.cartrefproperties.com