Force Majeure Provisions to add to Real Estate Contracts: Do you need one?

 

Generally, a “Force Majeure” clause is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, plague (e.g. COVID-19), or an event described by the legal phrase ‘Act of God’ prevents one or both parties from fulfilling their obligations under the contract.

Before the COVID-19 Pandemic, the standard Contract of Purchase and Sale for real estate contracts in British Columbia did not include Force Majeure provisions.

Realtors, buyers, and sellers now need to consider the use of such provisions within these contracts.

The events that trigger the Force Majeure clause must be clearly defined in the clause. For example, it may not be sufficient to simply reference the phrase “COVID-19”.  It is suggested that more needs to be stated, such as:

“In this contract, a Force Majeure event is deemed to have occurred where, because of COVID-19, any of the following events make it impossible to complete a party’s obligation under the contract:

  • The closure of government offices including without limitation the Land Titles Office including the inability to register transfer or mortgage documents;
  • The closure of banks and credit unions and the inability to obtain financing, cash, credit or immediately available funds in the form of cashier’s cheques, bank drafts or official credit union cheques;
  • The inability to obtain advice from professional consultants including appraisers and engineers;
  • The inability to provide vacant possession because a tenant cannot be evicted until the Pandemic is over;
  • The closure of law and notary offices and the inability to retain and instruct counsel; and
  • The inability of counsel to close the transaction due to a lack of staff or lawyers conversant with the subject matter of the transaction;”

Such an operative clause will act as a shield for the party affected by the event of Force Majeure so that a party can rely on that clause as a defence to a claim that it has failed to fulfil its obligations under the contract.

An Operative Clause should also specifically deal with the rights and obligations of the parties if a Force Majeure event occurs and affects the transaction. In other words, should the inability to complete the transaction only continue as long as the Force Majeure event continues, following which both parties shall promptly resume performance under the contract as soon as is practicable.

 

The following is an example of an Operative Clause:

  1. Neither party is responsible for any failure to perform its obligations under this contract if it is prevented or delayed in performing those obligations by an event of Force Majeure.
  2. Where there is an event of Force Majeure, the party prevented from or delayed in performing its obligations under this contract must immediately notify the other party giving full particulars of the event of Force Majeure and the reasons for the event of Force Majeure preventing that party from, or delaying that party in performing its obligations under this contract and that party must use its reasonable efforts to mitigate the effect of the event of Force Majeure upon its or their performance of the contract and to fulfil its or their obligations under the contract.
  3. Upon termination of those Force Majeure events that have caused a party to be unable to perform, the party affected must as soon as reasonably practicable recommence the performance of its obligations under this contract.
  4. An event of Force Majeure does not relieve a party from liability for an obligation which arose before the occurrence of that event, nor does that event affect the obligation to pay money in a timely manner which matured prior to the occurrence of that event.
  5. Neither party has an entitlement or liability for:
    • any costs, losses, expenses, damages or the payment of any part of the contract price during an event of force majeure; and
    • any delay costs in any way incurred by either party due to an event of Force Majeure.

 

Heath Law LLP provides experienced legal services to realtors, buyers, and sellers. Contact us via phone or email if you require legal advice regarding a real-estate contract.

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.

 

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.

This blog will discuss the disclosure that is required in a real estate transaction when a home has a stigmatized history.

The case which highlights this issue is Wang v. Shao, 2018 BCSC 377.

The facts of this case were as follows:

  • The case surrounded the purchase of an upscale home in Vancouver in 2009 (the “Shaughnessy Home”)
  • The seller of the Shaughnessy Home was Ms. Wang (the “Seller”) who was an immigrant from China
    • The Seller lived with her daughter, Ms. Yuan, Ms. Yuan’s husband Raymond Huang and their children
  • In 2007, Raymond Huang was shot to death on the sidewalk in front of the property
    • It was believed that this was a gang affiliated attack
  • As a result of the murder, the children were asked to leave the private school they were attending and started attending a private school in West Vancouver
  • Yuan then purchased a house in West Vancouver
  • The Seller meanwhile had gone back to China and Ms. Yuan moved to West Vancouver, meaning the Shaughnessy Home was empty and as a result, put on the market
  • When the Shaughnessy Home was put on the market, Ms. Yuan asked the realtor whether it was necessary to disclose the murder to prospective purchasers and the realtor said that unless a prospective purchaser specifically inquired about a death, there was no need to disclose
  • The eventual purchaser was a Ms. Shao (the “Buyer”) who received this answer when asking why the seller was selling:
    • the reason for selling was that the daughter had moved to a school in West Vancouver where she would have a better chance to practice her English
  • Eventually, a contract of purchase and sale dated September 3, 2009 was signed specifying a price of $6,138,000 and a closing date in November, 2009
  • On September 30, 2009, the Buyer learned through a friend that “a death had occurred” at the front entrance of the property. The Buyer then conducted a Google search and discovered that an alleged gangster had been shot fatally near the front entrance of the Shaughnessy Home
  • The Buyer informed the Seller that she would not be not be completing the transaction due to a breach of the Contract of Purchase and Sale
    • The breach being that the Seller expressly stated that there were no latent defects on the property that render the property dangerous or potentially dangerous to the occupants
  • The Seller then initiated a claim against the Buyer for breach of contract and the Buyer filed a counterclaim for fraudulent misrepresentation

There were two issues that the court had to decide on:

  • whether there was a latent defect on the property; and
  • whether there was a fraudulent misrepresentation

On the first issue, the court determined that there was not a latent defect on the property relying chiefly on the caveat emptor doctrine which basically means buyer beware.   The court reasoned that subjective concerns of this kind were not amenable to measurement on an objective standard and would impose an impossible standard of disclosure in circumstances such as this.  The court also said that latent defects dealt with defects or imperfections in respect of the property itself or any measurable condition or quality of the property and that the murder did not affect the property itself.

On the second issue, the court determined that the incomplete representation was a misrepresentation upon which the Buyer relied to her detriment. The court accepted the Buyer’s evidence that she would not have agreed to purchase the property had she known that a reputed gang leader had been murdered at the property’s front gate. The fraudulent misrepresentation vitiated the contract for purchase and sale and the Seller’s action was dismissed.

However, there was an appeal, Wang v Shao, 2019 BCCA 130.

The latent defect issue was not appealed and the fraudulent misrepresentation was overturned.

The court reasoned that If the law were now to be modified to require that upon being asked a general question like the one asked in this case, vendors must disclose all of their personal reasons and explain the causes for those reasons, even when they bear no relationship to the objective value or usefulness of the property, the door would be open to a huge number of claims. Buyers, perhaps unhappy with their purchases, could claim that information was ‘concealed’ or that a misrepresentation by omission had occurred — despite the fact the undisclosed information is, on an objective view, completely irrelevant to the value and desirability of the property.

In conclusion, latent defects are only those defects that affect the actual property and are not discoverable through reasonable inspection and if you have any particular concerns about the property you should ask outright.

It should also be noted that leave to appeal has been filed in the Supreme Court of Canada.

 

Do Good Easements Make Good Neighbours?

In Mending Wall, the American poet Robert Frost famously asked: Do good fences make good neighbours? In the poem, two neighbours are walking in tandem on either side of their fence, laboriously re-stacking fallen stones. The narrator questions this customary practice because their lands respectively contain apple and pine tree orchards. In response, the neighbour reiterates the adage: good fences make good neighbours. Here, Frost hints at the complexity of property rights. But, let’s suppose the fence was intruding two meters into the narrator’s property. What then?

Often, properties are subject to easements which—broadly stated—grant the right of use, enjoyment, and/or access to others. There are two general categories of easements: public and private. First, public authorities can acquire by expropriation an easement-like right of access for the maintenance of public services and utilities, what is known as a statutory right of way. Once established, these rights-of-way may limit where you can build permanent structures on your property (e.g. a patio, pool, carport, etc.).  For example, Frost’s narrator may have powerlines over a portion of his property; this could restrict the size of his orchard to ensure the utility company’s access.

Second, easements may be granted privately between property owners. These agreements run with the land, insofar as the right-of-access (or otherwise) is registered against the granting land (the servient tenement). Consequently, the easement will persist even when the initial property owners have sold their lands. The benefiting lands (the dominate tenement) carries the right for each subsequent owner’s or inhabitant’s enjoyment. For example, the narrator’s neighbour may be so content with fence mending because he inherited lands that benefit from an easement; whereas the narrator questions the custom because he has inherited lands that grant this benefit.

There are three elements required for an easement to be valid. First, there must be servient and dominate tenements. Private easements cannot exist in gross (“thin air”). These lands need not be contiguous, but they must be close enough to allow the one to benefit the other. Second, because easements impose a burden on the servient tenement, courts will not enforce one unless it improves the dominate land somehow. Third, an easement must be capable of forming the content of a grant. In other words, easements may only concern property rights, such as access to or use of lands. It cannot grant the right to a spectacular view, for instance. Nor can an easement impose a positive obligation on the servient tenement-holder. In Frost’s Mending Wall these three elements appear to be satisfied. Does that mean the narrator’s neighbour can fence the easement lands? Maybe.

Easements grant a property right, not a type of ownership. As such, they never grant the benefiting landowner exclusive possession of the subject lands. Where sufficient access remains for the servient tenement-holder, a dominant tenement-holder may fence easement property—provided it contributes to the easement’s purpose. In Beyer v. Clarke, for example, the B.C. Supreme Court permitted such a fence because it improved the land’s safety for the dominant-tenement holder and their dog. The easement at issue granted a general right of use and enjoyment. To that end, the dominant tenement-holder constructed an ornate garden. Because the fence contained a gate which allowed garden access to the servient tenement-holder and because the fence contributed to the easement’s general purpose, the court refused to order its removal. From this precedent, the narrator’s neighbour may fence the easement lands, provided it contains a gate and contributes to the easement’s purpose.

How do easements end? First, the tenement-holders may agree to remove the easement from the land titles registry. Second, the benefitting landowner may abandon the easement. This requires more than mere disuse. Rather, it requires an action which clearly demonstrates their intention to abandon the right. They may, for example, fence over their access route. And lastly, the easement’s purpose may be rendered obsolete.  An easement allowing for septic truck access, for instance, may become obsolete when a city installs sewage lines.

As Robert Frost’s Mending Wall suggests, property law is complex. Maintaining good relations with your neighbour often requires more than a fence. If your property is subject to an easement and you are hoping to make changes, call our office for more information about your rights and your property’s restrictions.

Renovictions in BC

In April 2018, Premier John Hogan created a Rental Housing Task Force, comprised of three MLAs: Spencer Chandra Herbert, Adam Olsen, and Rae Leonard. One of their major recommendations regarding the issue of “renovictions” has been adopted by the Provincial government and came into force in May 2018. A renoviction occurs when a tenancy agreement is prematurely ended for renovations or repairs. While this is permitted under 49 of the Residential Tenancy Act, the Task Force’s public consultations suggested that this section was often misunderstood or abused by landlords. For example, cosmetic upgrades and minor renovations to electrical or plumbing systems were often being cited as justifications for evicting tenants. The Task Force claimed that this created housing insecurity for renters. To mitigate this issue, they recommended that agreements should persist where possible. Where health and safety concerns necessitate the tenant’s absence from the property, the Task Force further suggested that they receive a right of first refusal upon the work’s completion. The Province quickly adopted these recommendations, as follows:

  • Landlords must provide 4-months’ notice to end a tenancy for demolition, renovation or repair, or conversion. The tenants have 30 days to dispute this notice at the RTB.
    • Before the notice is filed, the landlord must have all the applicable permits and approvals to renovate.
  • If the landlord ends the tenancy under section 49 (landlord’s use) and they do not:
    • take steps towards accomplishing the stated purpose within a reasonable time;
    • use the property for less than 6 months after the tenancy ends;

they will be required to compensate the tenant for 12 months’ rent; unless an arbitrator finds that extenuating circumstances excuse the landlord of liability.

  • Where major renovations require the tenant to vacate the property, the tenant will have a right of first refusal to re-enter the property under a new tenancy agreement.
    • However, this only applies to tenancies within a residential property with more than five or more rental units.
    • Should the landlord fail to recognize this right by not giving the tenant 45 days’ notice of availability and a new tenancy agreement, they will be required to compensate the tenant 12 months’ rent (again, subject to a valid excuse from extenuating circumstances).

For commercial residential rental companies, these new rules introduce a risk of significant liability when renovating or repairing a building, for each tenant has a potential claim of 12 months’ rent. With five tenants at $1,000 per month, the landlord may be liable for $60,000 for failure to adhere to these rules. As such, we recommend seeking legal advice before issuing notices and swinging hammers.

The Speculation and Vacancy Tax Act

The Speculation and Vacancy Tax Act (the “Act”) was enacted by the British Columbia provincial government on November 27, 2018. The purpose of the Act is to combat speculation in the residential housing market and turn empty houses into homes for BC residents.

General Information about the Act

Unless exempted, all owners of residential property in designated regions must pay the speculation and vacancy tax (the “Speculation Tax”). The designated regions include most of the Capital Regional District and Metro Vancouver, the Cities of Abbotsford, Chilliwack, Kelowna, West Kelowna, and Nanaimo, as well as the Districts of Mission, and Lantzville.
Every owner of a residential property on December 31 in those regions must make a declaration by March 31 of the following year, even if the owner no longer owns the property.

The Speculation Tax is calculated as follows:
Tax payable = (tax rate) x (owner’s interest) x (assessed value of the property)

For 2018, the tax rate for all owners is 0.5%. For the 2019 calendar year and beyond, the tax rate will be 0.5% for Canadian citizens and permanent residents who are not members of Satellite Families (defined below). Foreign owners and members of Satellite Families will be charged a tax rate of 2%. “Satellite Families” are households who declare less than 50% of their total income for the year on Canadian income tax returns.

Owners who owe taxes must pay by July 2 of the year following the assessed year. For the 2018 calendar year, the Speculation Tax must be paid by July 2, 2019. Failure to pay on time may result in interest and penalties.

Exemptions
If an owner qualifies for one of the following exemptions, they will not have to pay the Speculation Tax. However, failure to declare will result in being assessed at the highest tax rate (2%), even if the owner would have otherwise been exempt. Below is a list of some, but not all, of the exemptions under the Act.

1. Principal Residence
Owners are exempt if the residential property is their principal residence. If owners own multiple properties, they can only claim this exemption for the place they lived the longest in. Spouses cannot claim two different places unless there is a specific reason, such as work, medical leave, or divorce. Foreign owners and members of a Satellite Family cannot claim this exemption. If the owners do not live in the residence for the necessary time, they may still be able to claim the exemption if they were absent for certain reasons, such as medical leave or residential care.

2. Tenants
If the property is occupied by a tenant for periods of at least 30 days and for a total of 6 months (3 months for 2018), the owner can claim an exemption. There must be a written tenancy agreement, unless the tenant has a non-arm’s length relationship with the owner (e.g. close friend of family member).

3. Under Construction or Renovation
If the property is uninhabitable for a period of at least 90 days due to construction or renovations, the owner may be able to claim this exemption. The owner must demonstrate that they have taken reasonable steps to ensure that the building activity continues without undue delay, or that any undue delay was beyond their control.

Other Information
The Speculation Tax is completely separate from an owner’s other taxes, including income tax, property tax, and the Vancouver Empty Homes Tax.

The Speculation Tax attaches to the owner, not the property. This means that a new buyer does not have to worry about hidden liability when they buy a house and that the seller may be liable to pay the Speculation Tax even after they sell a house.

Owners may be able to claim tax credits against any Speculation Tax assessed. BC residents who are not members of a Satellite Family get tax credits of $2,000 per property and per person, which means that the first $400,000 of a property will usually be tax free.

If you have any questions about how the Speculation and Vacancy Tax Act may apply to you, please contact Heath Law LLP at 250-753-2202 or toll free: 1-866-753-2202.

BC Limitations Act

In 2013 the new BC Limitation Act (“BCLA”) came into force.  There are many differences between the BCLA and the old BC Limitation Act.  Two of these differences are in relation to s. 14 and s. 15 of the BCLA.

S.14 of the BCLA relates to the limitation period for demand obligations. S. 14 states: “A claim for a demand obligation is discovered on the first day that there is a failure to perform the obligation after a demand for the performance has been made.” In other words, the countdown period for the limitation period does not start until the borrower under an agreement fails to pay an obligation once a demand has been made.  The old BC limitation act had a six year limitation period for demand obligations in which the countdown period for the limitation period would start from the date the initial obligation arose.

S.15 of the BCLA relates to the limitation period for realizing or redeeming security.  S. 15 states: “A claim to realize or redeem security is discovered on the first day that the right to enforce the security arises.”  This is a marked difference from the old BC Limitation Act which had a six year limitation period for bringing action on collateral that was not in the secured party’s possession.  Lenders in secured transactions need to be aware of this striking change.

These two provisions of the BCLA were judicially scrutinized for the first time since their enactment in the recent British Columbia Court of Appeal decision Leatherman v 0969708 BC Ltd., 2018 BCCA 33.  This case is illustrative of the wariness lenders should have in regards to the new BCLA.

In Leatherman a mortgage was granted to secure a debt.  Under the mortgage the loan was payable on demand, with payments of interest to be paid annually.  The Mortgagor failed to make a required interest payment on Oct 31, 2013.  This is effectively the date of default.  No further action was taken by the mortgagees until Nov, 2015.  At that time correspondence was exchanged between the parties in relation to the debt and its repayment.  A demand was made by the mortgagees on Nov 9, 2016.

The Court stated “This Mortgage, like most mortgages, includes both a covenant to pay and security for the debt. The covenant to pay the principal, considered on its face, and alone, is a demand obligation. With respect to it, s. 14 applies; that is, it is not payable until demand. The obligation to pay interest, however, is not a demand obligation because it was payable without demand on October 31 of each year. The Mortgage also provides that the property mortgaged is security for the debt. With respect to security for the debt, s. 15 of the Act applies. The right to realize on the security arises upon discovery of that right.”  In other words, the mortgage became enforceable as of the date of default, Oct 31, 2013, and would be statute barred two years later.  However, the mortgagor was still liable for his personal covenant as two years has not elapsed since demand for payment was made.

Going forward, where there is a default on a mortgage a lender must foreclose within two years of that default even if the loan, which is supported by the mortgage, is payable on demand, and no demand has been made.

The limitation period could be extended beyond two years after default where a mortgagor acknowledges liability.  This is governed by s.24 of the BCLA.  S. 24(1)(a) states “If, before the expiry of either of the limitation periods that, under this Act, apply to a claim, a person acknowledges liability in respect of the claim, the claim must not be considered to have been discovered on any day earlier than the day on which the acknowledgement is made.”

Acknowledgement under s .24 includes a debtor’s performance of an obligation under or in respect of a security agreement (s. 24(8)).  In other words, for a conventional mortgage where there are specified payments, when the mortgagor under a mortgage makes a payment after their initial default this will postpone the date of discovery to the date on which the mortgagor made the after default payment.

Tent Cities have been popping up in British Columbia, some in large urban areas such as Victoria and Vancouver and others in smaller communities such as Abbotsford and Nanaimo.  Advocates of these tent cities state that tent cities act as a community for homeless people providing enhanced safety and a sense of belonging.  How have the BC Courts treated these tent cities?

In British Columbia v Adamson, 2016 BCSC 584 the application for removal of the tent city by interim injunction failed.  The Province applied unsuccessfully for the removal of the tent city which was located on Victoria Courthouse property.  The Court determined that the Province failed to meet the test for granting an interim injunction which is laid out in RJR MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311.  The test in which all elements have to be passed is as follows:

  1. Has the applicant demonstrated that there is a fair question to be tried;
  2. Will the applicant suffer irreparable harm if the injunction is not granted; and
  3. Does the balance of convenience favour granting the injunction?

The Court found that there was a fair question to be tried but the Province did not fully demonstrate they would suffer irreparable harm nor did the balance of convenience weigh in favour of the Province.

The court based its decision on a great deal of evidence which demonstrated this particular tent city to be a safe-haven for the homeless that were living there.  The evidence proffered described the tent city as a community with rules and governance.

A second application was heard for an interim injunction on the Victoria Courthouse tent city.  The Court’s decision on this second application is recorded as British Columbia v. Adamson, 2016 BCSC 1245.  In this application the Province was successful.  The Court based its decision on the changes occurring in and around the tent city.  The tent city governance had fallen apart as well concerns began to crystalize relating to the health and safety of the surrounding community.  The Court ordered that the tent city residents were to vacate the premises as soon as additional housing from the Province became available.

In another British Columbia Court decision Vancouver (City) v. Wallstam,

2017 BCSC 937 an application for an interim injunction to dismantle a tent city was heard.  Again, the RJR MacDonald test was used.  The Court determined that the applicant City was unable to prove that irreparable harm would be suffered.  The evidence spoke similarly to Adamson in that this tent city was a safe-haven for the homeless.  The tent city was vital in maintaining the homeless people’s security of the person.

The decisions mentioned above support the view that only once a tent city begins to negatively impact the surrounding community will an interim injunction be granted.  As long as the tent city remains a civilized community, they are allowed to stay.  The availability of alternative housing is another factor that the Courts have considered in allowing or disallowing the injunctions to dismantle a tent city.

From these decisions there is much left unclear about the public’s rights in relation to these tent cities.  Perhaps future decisions will tender a new legal test to be applied in these tent-city circumstances.