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.