COVID-19 and Residential Tenancies

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The tenant/landlord relationship is based on the tenant living up to certain obligations such as paying rent and keeping the rental unit in an acceptable condition and the landlord having the ability to evict the tenant if they fail to live up to those obligations.  However, due to COVID-19, a tenant may be unable to adhere to certain obligations that are expected of them.  Do landlords still have the ability to evict tenants during the State of Emergency caused by COVID-19?

Normally, landlords have the ability to evict a tenant for a variety of reasons pursuant to the British Columbia Residential Tenancy Act (the “Act”).  Some of the more common reasons are:

  • Non-Payment of Rent;
  • Damaging the rental unit;
  • Landlord’s use of the rental unit; and
  • Landlord selling the rental unit.

If a landlord wants to evict a tenant, the landlord has to serve the tenant with a Notice to End Tenancy.  After the tenant has received the Notice to End Tenancy, the tenant can dispute the Notice to End Tenancy within a certain timeframe which is prescribed by the Act.  If the tenant does not dispute the Notice to End Tenancy, the tenant is deemed to have accepted that the tenancy will end after the notice period provided in the Notice to End Tenancy has elapsed.

Due to COVID-19, the Government of British Columbia (the “Government”) has created special rules regarding the eviction of residential tenants.  One of these rules concerns the validity of Notice to End Tenancies given by landlords.  If the Notice to End Tenancy was given on or after March 30, 2020, it can be ignored by the tenant as the notice is of no force or effect.  If the Notice to End Tenancy was given before March 30, 2020, the notice is valid and statutory timelines for disputing the Notice to End Tenancy are in effect.

If the tenant does not leave the rental unit after the notice period has ended, a landlord cannot remove a tenant by force.  The landlord must apply to Court for an “Order of Possession”. The Government has stated that Orders of Possession are not being enforced until the State of Emergency has ended except under exceptional circumstances.  Examples of exceptional circumstances include situations where the tenant has:

  • Significantly interfered with or unreasonably disturbed another occupant or the landlord of the residential property;
  • Seriously jeopardized the health or safety or a lawful right or interest of the landlord or another occupant;
  • Put the landlord’s property at significant risk;
  • Caused extraordinary damage to the residential property; or
  • Engaged in illegal activity that has;
    • Caused or is likely to cause damage to the landlord’s property;
    • Adversely affected or is likely to adversely affect the quiet enjoyment, security, safety or physical well-being of another occupant of the residential property; or
    • Jeopardized or is likely to jeopardize a lawful right or interest of another occupant or the landlord.

To summarize, if a tenant received a Notice to End Tenancy before March 30, 2020, it is valid and, once the State of Emergency ends, the landlord will be able to apply for and execute on an Order of Possession.  If you have any questions or concerns regarding your tenancy or a Notice to End Tenancy you received, please call Heath Law LLP at 250-753-2202.

 

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Defaulting Commercial Tenants

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COVID-19 Pandemic – Commercial Retailers Defaulting Rental Payments Increases

In the face of the global COVID-19 pandemic that is currently plaguing the world, some commercial retailers have been forced to close their doors.  With no income, the likelihood of these commercial retailers defaulting on their rental payments increases.  What should the commercial landlord do with the defaulting tenant taking into account the world at large?

The commercial landlord has many options available.  The landlord should first provide a default curing period.  Often there are stipulations in the tenancy agreement itself which supply the curing period, but if there isn’t, the landlord should consider extending a curing period unless the landlord seeks to immediately terminate to regain possession of the premises.

The landlord should also consider a variety of tenant concessions unless as stated previously, the landlord wants to regain possession of the premises.  Some examples of concessions would include:

  • Basic Rent abatement or deferral;
  • Basic Rent suspension for defined periods (i.e. 3-6 months or longer depending on the nature of the tenancy);
  • Basic Rent deferrals for a defined period and a corresponding increase in Basic Rent at a point in the future to make up for the Basic Rent deferral;
  • Either eliminating or reducing the obligation to pay Basic Rent and replacing it with the requirement to pay Percentage Rent for a defined period of time;
  • Abating or suspending both Basic Rent and Operating Costs. Typically landlords like to recover at least their out of pocket expenses such as realty taxes, insurance, utilities still and maintenance costs;
  • Reduction or elimination of administrative fee and/or management fee component of operating cost charge;
  • Reduction or elimination of promotional and marketing fees;
  • Reduction of services offered and performed at the property to effect a reduction in operating costs to be charged to tenants during the COVID pandemic;
  • Depending on the size of the property, number of tenants and nature of the tenancies in a given property, a landlord can consider a reduction of services provided to tenants during the state of emergency, which would potentially reduce operating costs;
  • If the landlord would rather that a particular tenant vacate its premises, then the landlord may consider building in an automatic termination or an option to terminate for the landlord.
  • Ensure that any concession you agree to clearly provides the following:
    • a consideration clause;
    • when the concession expires;
    • that the lease is otherwise in full force and effect and remains unamended;
    • time shall continue to remain of the essence;
    • the concession is not a waiver of any other clause in the lease;
    • an indemnitor signature, if applicable.

Further options available to the landlord include terminating the lease, suing for arrears and distraint.

If the landlord elects to terminate the lease, the tenant will have to vacate the premises.  This remedy would not be advisable if the landlord wants the tenant to remain in the premises, does not have a replacement tenant for the premises or if the landlord does not intend to use the premises themselves.

If the landlord sues for arrears, this action affirms the tenancy meaning the landlord can’t sue for arrears and then terminate the lease for failure to pay those same arrears.

Distraint allows a landlord to seize the tenant’s goods on the premises with a view to eventually having those goods sold to pay for the arrears of rent.  There are special rules that a landlord must adhere to when exercising their right of distraint.  They must only seize and sell those goods necessary to pay the rent arrears, there has to be an appraisal of the goods and the goods that are seized have to be the tenant’s goods. Also, similar to suing for arrears, if this option is chosen, then the lease will have been affirmed and the landlord cannot terminate for that same breach.

If you need legal advice with regard to a commercial tenancy please contact Heath Law LLP at 250-753-2202.

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Exclusion of Liability Clauses

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Ski-hill Lift Tickets – Liability, Unilateral Contracts, Negligence Exclusion

In certain situations, such as obtaining a lift ticket for a ski-hill, “unilateral contracts” are used by one of the parties to the contract (i.e., the ski hill) which set out specific conditions the other party (i.e., the consumer) must accept if the consumer wants to proceed with using the ticket.  Are all the terms and conditions of these unilateral contracts binding on the consumer even if the consumer did not sign or have any part in the formation of the contract?

A recent case from the British Columbia Court of Appeal (“BCCA”) Apps v. Grouse Mountain Resorts Ltd., 2020 BCCA 78 [Apps] addressed the requirements for unilateral contracts to be binding when the consumer does not sign a contract.

The unfortunate facts of Apps are as follows.  The plaintiff was a snowboarder who became a quadriplegic after attempting a large jump at Grouse Mountain in Vancouver, BC.  The plaintiff was an Australian who was living, working and snowboarding in Whistler, he was only 20 at the time of his injury.

The plaintiff alleged that the jump was negligently designed, constructed, maintained and inspected by Grouse Mountain. Grouse Mountain, in defence, relied on an exclusion of liability waiver which it said constituted a complete defence. The British Columbia Supreme Court (“BCSC”) dismissed the plaintiff’s action. The BCCA overturned the BCSC’s decision.

The type of waiver Grouse Mountain was relying on was an “own negligence exclusion”.  This type of exclusion not only excludes liability for the risks inherent in the use of Grouse Mountain’s product or service, but also liability for negligence caused by Grouse Mountain itself.

The BCCA stated that “own negligence exclusions” are among the more onerous conditions to be placed into contracts, meaning that for Grouse Mountain to rely on the exclusion it must have taken reasonable steps to bring the exclusion to the attention of the Plaintiff.

The BCCA concluded that not enough had been done by Grouse Mountain to bring the “own negligence exclusion” to the plaintiff’s attention before he entered into the contract. The exclusion was included in a posted sign above the counter where the lift tickets were sold, but the text was difficult to read, and the “own negligence exclusion” was not emphasized.  This would be considered the pre-contractual notice (before the ticket was purchased).  Post-contractual notice (after the ticket was purchased) of the “own negligence exclusion” appeared on the back of the lift ticket and on a sign in the terrain park.  The BCCA concluded that post-contractual notice has no bearing on whether Grouse Mountain gave sufficient notice to the Plaintiff.

Grouse Mountain also attempted to rely on the plaintiff’s knowledge of the presence of these types exclusions due to his previous employment at Whistler and having signed such an exclusion for his Whistler’s Season Pass.  The BCCA found that the plaintiff’s previous experience with “own negligence exclusions” from his experiences at Whistler did not mean he had actual knowledge of Grouse Mountain’s specific clause.

The BCCA therefore overturned the BCSC decision and allowed the plaintiff to continue his action.

For businesses that are concerned about what proper notice would look like, the BCCA provided some indicators of proper notice.  To rely on any type of waiver which will result in the consumer losing legal rights, a service provider should, before contract formation, ensure that the “own negligence clause” is clearly brought to the attention of the consumer by using large, colorful and bold text and literally mention the “own negligence clause” to the consumer.

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Do Spousal Support Obligations Survive Death?

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What happens to spousal support when the person making the payments (the “Payor”) passes away?  Does the spousal support die along with the Payor or does the obligation survive, binding the estate of the Payor?

When married or common-law couples end their relationship, sometimes spousal support arises.  Spousal support is payment from one spouse to the other in recognition that one of the parties to the relationship may have sacrificed their own financial independence to help the overall landscape of the relationship whether that was providing care to the children of the marriage or giving up opportunities they would have otherwise been able to pursue had they not been supporting their partner.  Spousal support is usually paid pursuant to a separation agreement or a Court order.

Pursuant to s. 170(1)(g) of the Family Law Act of British Columbia (the “Act”), an order respecting spousal support can provide for payment after the death of the Payor.  S. 171(1) of the Act provides the elements that have to be present before a Court will order spousal support after the death of the Payor:

  • that the person receiving child support or spousal support has a significant need for support that is likely to continue past the death of the person paying child support or spousal support;
  • that the estate of the person paying child support or spousal support is sufficient to meet the need referred to in paragraph (a) after taking into account all claims on the estate, including those of creditors and beneficiaries; and
  • that no other practical means exist to meet the need referred to in paragraph (a).

If there was an agreement or order in place that provides for spousal support after death, then those provisions will have full force and effect and will bind the Payor’s estate until the period of payment provided for in the agreement or order expires.  To end the spousal support payments before the agreement or order expires, the Personal Representative of the Payor’s estate can apply under s.171(2) of the Act to set aside the agreement or order.

If the agreement or order for spousal support is silent as to whether spousal support survives death, the person receiving support can apply under s.171(3) of the Act to get an order requiring the Payor’s estate to continue to pay spousal support.

What about spousal support payments that are in arrears at the time of the Payor’s death?  Any spousal support payments in arrears at the time of the Payor’s death, will constitute a debt of the Estate: L.S.M.K. v. J.W.K., 2019 BCSC 2025.

Please contact Heath Law LLP at 250-753-2202 if you have any questions regarding spousal support or have any other Family Law related concerns.

 

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