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B.C. moves to stop landlords from using lease loophole to increase rents

Laura Hope was living this apartment building in Victoria for two years with her husband and their infant son when their landlord announced they were jacking up rent by 24 per cent by using what some describe as a loophole in fixed-term leases. The B.C. government has announced an end to the tactic.

Chad Hipolito/The Globe and Mail

A week before the provincial election last May, Laura Hope's landlord told her and her husband that they had two options as the lease was set to expire on their one-bedroom apartment just outside downtown Victoria: stay and pay an extra $230 a month – an increase of about 24 per cent – or move out.

Ms. Hope's landlord was using what some described as a loophole in the law, in which landlords push tenants to sign a form of fixed-term lease to skirt provincial rent-control rules. "When we got that, my husband I were both totally infuriated," she said. "We are in a fortunate situation where it wasn't going to make us destitute to make us have to pay that extra $200 – we also had other options of going and living with friends – but there's people in that building that are seniors and retirees."

Such leases include a clause that kicks in at the end of the term, typically a year, allowing landlords to demand entirely new leases – with unlimited rent increases that violate the provincially mandated limits. The tactic has been a controversial topic in Metro Vancouver, where renters make up close to half the population of some communities, and prompted the New Democrats to campaign in the spring election to get rid of them.

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On Thursday, the NDP government introduced legislation to that effect. The bill would amend the provincial Tenancy Act to immediately roll fixed-term leases into month-to-month tenancies and hold them to the province's existing rent-control rules, which allow for one rent increase every 12 months. The limit is 3.7 per cent this year. With vacancy rates hovering around zero, renters in the Vancouver and Victoria regions feel they often have little choice but to accept a landlord's terms, even if they're problematic – or illegal.

"We have one and a half million renters in this province and they need protections now," Housing Minister Selina Robinson told reporters at a news conference held after she introduced the new rules Thursday afternoon.

The bill, expected to pass next month, would mean landlords would only be able to evict a renter if they are moving a family member into the unit or doing renovations.

The New Democrats made housing for renters a central issue in its spring election campaign, although there has been no progress on its main promise for renters: a $400-a-year rebate.

A spokesperson for Ms. Robinson did not respond Thursday to a question on when this could be expected.

Todd Stone, the Liberal critic for housing and aspiring party leader, said Thursday that he and fellow opposition members might support the bill but first must study whether it will help make life more affordable for people.

Mr. Stone said his party "missed the mark" on this and other housing-affordability issues affecting Metro Vancouver during the past election.

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"So we have to be open-minded moving forward to an issue that will address those affordability challenges," he told reporters Thursday afternoon.

David Hutniak, chief executive officer for LandlordBC, told reporters at a joint news conference with Ms. Robinson that his organization has condemned the abuse of vacate clauses and fixed-term agreements, and the proposed changes would prevent bad landlords from taking advantage of renters.

Ms. Robinson said there are no official figures on how many people have been affected by the fixed-term loophole, but a renter advocate at the press conference said in recent years it has become the most common complaint among tenants.

Ms. Robinson says her motion would also beef up funding for the Residential Tenancy Branch, which handles disputes for aggrieved renters and landlords.

Calls to the agency have increased in recent years, from 268,000 in the 2013-14 fiscal year to roughly 307,000 in 2015-16. The budget for the agency stayed constant at about $8-million for the past decade under the B.C. Liberals. In September, the NDP increased funding to the RTB to $9.2-million this fiscal year and $11.6-million the following two.

The RTB only has one bricks-and-mortar office, located in Burnaby, so the majority of complaints are funnelled into a phone system where, government records showed last year, almost a quarter of all people dropped their call rather than wait the average hold time of 34 minutes.

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