Rent Increase in Residential Tenancies (19:VIII): Difference between revisions

Latest revision as of 08:13, 30 August 2024

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on August 15, 2024.

A. Subsidized Housing is Excluded

For rental units operated by certain public housing bodies whose rent is dependent on the tenant’s income, the tenancy is excluded from the RTA’s provisions on rent increases (RTR, s 2). The affected bodies under this section are:

the British Columbia Housing Management Commission;
the Canada Mortgage and Housing Corporation;
the City of Vancouver;
the City of Vancouver Public Housing Corporation;
Metro Vancouver Housing Corporation;
the Capital Region Housing Corporation; and
any housing society or non-profit municipal housing corporation that has ever had an agreement (including if the agreement expired and was not renewed) regarding the operation of residential property with the following:
- the government of British Columbia;
- the British Columbia Housing Management Commission;
- the Canada Mortgage and Housing Corporation;
- a municipality; and
- a regional district.

B. Payment and Non-payment of Rent

1. Cash Payment Rules

A landlord must provide a tenant with a receipt for rent paid in cash (RTA, s 26(2)). If a tenant makes a cash payment and receives no receipt, the tenant should send a letter to the landlord confirming the payment or pay with a witness present.

2. Non-Payment of Rent

Whether or not a tenant pays rent in accordance with the tenancy agreement, a landlord must not seize any personal property of the tenant or prevent or interfere with the tenant’s access to the tenant’s personal property (RTA, s 26(3)). The only exceptions are if the landlord has a court order authorizing the action, or if the tenant has abandoned the rental unit and the landlord complies with the RTR (RTA, s 26(4)).

C. Allowed Rent Increases

Landlords can raise rents in the following circumstances under section 43(1) of the RTA.

1. Annual Rent Increase

A landlord can unilaterally increase rent by a set amount each year as defined in the RTR (RTA, s 43(1)(a)). The percentage for allowable rent increases is usually the inflation rate (Consumer Price Index, or “CPI”), but it is limited to only 3.5% for 2024 (RTR, s 22.2(2)). The maximum allowable increase changes each year on January 1 and is usually posted in the preceding September on this webpage.

The rent increase formula for Manufactured Home Parks is inflation plus the proportionate amount of the increases to regulated utilities and local government levies (MHPTR, s 32(3)).

2. By RTB Order

Section 43(3) of the RTA permits landlords to apply to the RTB for an order allowing a rent increase greater than otherwise allowed under s 43(1). The circumstances under which these applications may be made are set out in sections 23-23.4 of the RTR. A landlord may impose this rent increase in combination with an annual rent increase, but may only impose an approved additional rent increase from one of the following two categories at a time:

a) Circumstances Other Than Eligible Capital Expenditures

Circumstances in this category are governed by section 23 of the RTR and include:

incurring financial loss from an extraordinary increase in the rental property’s operating expenses (RTR, s 23(1)(a));
incurring reasonably unforeseen financial loss from the financing costs of purchasing the residential property (RTR, s 23(1)(b)); or
the landlord, as a tenant, has received an additional rent increase under this section for the same rental unit (RTR, s 23(1)(c)).

b) Eligible Capital Expenditures

If the landlord, in the 18 months preceding their application for dispute resolution, has made a significant capital expenditure, they may be eligible for an RTB order for a rent increase (RTR, s 23.1(1)). This 18-month window includes expenditures partially paid for outside the 18-month period, as long as the final payment is paid within the 18-month period.

The expenditure must be for installing, repairing, or replacing a major system or component of the rental property that is necessary to achieve one of the following purposes:

maintaining the residential property in a state of repair that complies with the health, safety, and housing standards required by law in accordance with section 32(1)(a) of the RTA (RTR, s 23.1(4)(a)(i));
the system or component has failed, is malfunctioning, or is close to the end of its useful life (RTR, s 23.1(4)(a)(ii));
reducing energy use or greenhouse gas emissions (RTR, s 23.1(4)(a)(iii)(A)); or
improving the security of the residential property (RTR, s 23.1(4)(a)(iii)(B)).

Applications shall not be granted where a tenant can show that the need for the capital expenditures arose because of inadequate repair or maintenance on the part of the landlord, or that the landlord has been paid or is entitled to be paid from another source (RTR, s 23.1(5)). Capital expenditures may not be claimed again for at least 5 years (RTR, s 23.1(4)(c)).

3. By Mutual Agreement in Writing

A tenant may also agree to pay a greater increase than the percentage permitted; this agreement must be writing. RTB PG 37B sets out that a mutually agreed rent increase being recorded in writing should:

clearly set out the rent increase (for example, the percentage increase and the amount in dollars);
clearly set out any conditions for agreeing to the rent increase;
be signed by the tenant, and
include the date that the agreement was signed by the tenant.

Because the RTA otherwise limits the circumstances under which a landlord may increase rent, a tenant is not obligated to agree to a rent increase by mutual agreement if so requested by the landlord.

D. Improper Rent Increase

If a landlord collects a rent increase that does not comply with the RTA, the tenant may deduct the entire increase from the rent. The tenant should communicate the reason for the deduction to the landlord before taking this form of action, or they may risk being served a 10-day notice to end tenancy for non-payment of rent.

A tenant may not apply for dispute resolution to dispute a rent increase that complies with section 43(1) of the RTA. However, especially in the case of rent increases by mutual agreement, it may be possible that a rent increase is invalid due to being unconscionable or otherwise an attempt to avoid the RTA, of no effect pursuant to section 5; in this case, the tenant should apply for dispute resolution at the RTB. This includes if the mutually agreed rent increase was not imposed in compliance with the other requirements governing rent increases (RTB PG 37B).

E. Timing and Notice of Rent Increases

A landlord must not impose a rent increase for at least 12 months after the previous rent increase, or the tenant’s rent has never been increased, at least 12 months after the rent was first payable (RTA, s 42(1)).

Using the approved form, the landlord must give written notice of any rent increase at least three full months before the increase becomes effective (RTA, s 42(2)), including for those mutually agreed to in writing.

If the landlord gives notice of less than three months or does not comply with the 12-month waiting period described above, the notice of rent increase is invalid and of no effect until it does comply (RTA, s 42(4), with its effective date self-correcting to the first day the notice complies with both timing and notice requirements. The tenant should notify the landlord about any self-correcting dates.

1. Exception: Rent Tied to Number of Occupants

In a tenancy agreement conforming to section 13(2)(f)(iv) of the RTA where the monthly rent varies according to the number of occupants, the addition of a new occupant is not subject to these rent increase provisions: the timing and notice provisions only apply to rent increases other than those triggered by a new occupant (RTA, s 40), and the addition of a new occupant does not reset the period the landlord must wait before imposing another rent increase.

As of May 16, 2024, landlords are not allowed to make these occupancy-tied rent increases based on additional occupants who were a minor at the time of entering into the tenancy agreement (RTA, s 22.1). One result of this provision is that a landlord cannot automatically increase rent per due to the birth of their tenant’s child. See RTB PG 37 for other examples of how this provision prevents landlords from relying on an occupant-based rent rate to automatically adjust rent without affecting other rent increases.

F. New Lease with Same Tenant and Location

A landlord and tenant may agree to renew a fixed-term tenancy agreement with or without changes for another fixed term. If a fixed term tenancy does not require the tenant to vacate at the end of the term and no new agreement is entered into, the tenancy automatically continues as a month-to-month tenancy on the same terms (RTA, s 44(3)). Rent can only be increased between fixed-term tenancy agreements with the same tenant if the notice and timing requirements for rent increases are met, so entering into successive fixed-term tenancies does not constitute a mutually agreed rent increase under section 43(1)(c) of the RTA (RTB PG 30).

G. Hidden Rent Increases

If the landlord starts to charge the tenant for a service or facility included in the rent or takes away a service or facility included in the rent without decreasing the rent proportionately pursuant to section 27 of the RTA, that may effectively be a rent increase. The tenant may apply for dispute resolution to recover the effective overpayment.

If the Arbitrator considers that the value of the tenancy agreement has decreased as a result, the Arbitrator can provide relief such as a monetary order in favour of the tenant or an order to restore the terminated service or facility. See also RTB PG 22: Termination or Restriction of a Service or Facility.

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+{{REVIEWED LSLAP | date= August 15, 2024}}
 {{LSLAP Manual TOC|expanded = landlord}}
-CHAPTER 7 REPAIR AND SERVICE
+== A. Subsidized Housing is Excluded ==
-=A. Duty to Provide and Maintain Rental Unit in Repair=
+For rental units operated by certain public housing bodies whose rent is dependent on the tenant’s income, the tenancy is excluded from the ''RTA''’s provisions on rent increases (''RTR'', s 2). The affected bodies under this section are:
-==1. Landlord==
+*the British Columbia Housing Management Commission;
+*the Canada Mortgage and Housing Corporation;
+*the City of Vancouver;
+*the City of Vancouver Public Housing Corporation;
+*Metro Vancouver Housing Corporation;
+*the Capital Region Housing Corporation; and
+*any housing society or non-profit municipal housing corporation that has ever had an agreement (including if the agreement expired and was not renewed) regarding the operation of residential property with the following:
+**the government of British Columbia;
+**the British Columbia Housing Management Commission;
+**the Canada Mortgage and Housing Corporation;
+**a municipality; and
+**a regional district.
-Sections 32(1)(a) and (b) of the RTA provide that a landlord must provide and maintain residential property in a state of decoration and repair that complies with the health, housing and safety standards required by law, and having regard to the age, character and location of the rental unit. It must be suitable for tenant occupation. With respect to a landlord’s obligation to repair, the RTR Schedule states that the landlord must provide and maintain the residential property in a reasonable state of decoration and repair, suitable for occupation by a tenant.
+== B. Payment and Non-payment of Rent ==
-A landlord is responsible for repairing:
+=== 1. Cash Payment Rules ===
-*the rental structure, and roof;
+A landlord must provide a tenant with a receipt for rent paid in cash (''RTA'', s 26(2)). If a tenant makes a cash payment and receives no receipt, the tenant should send a letter to the landlord confirming the payment or pay with a witness present.
-*heating, plumbing, electricity;
-*locks, walls, floors, ceilings;
-*fire doors, and fire escapes;
-*intercoms, elevators; and
-*anything else included in a tenant’s rent, if so identified in the tenancy agreement.
-If a landlord is required to make a repair to comply with the above obligations, the tenant should be advised to notify the landlord of the need for repair (preferably in writing). If the landlord refuses to make the repair, the tenant may seek an Arbitrator’s order. If the tenant fails to notify the landlord and substantial damage results from the lack of repair, the tenant may have breached his or her duty.
+=== 2. Non-Payment of Rent ===
-When a tenant goes to the RTB to request a repair order, they may also request for a rent reduction until the repair is complete.
+Whether or not a tenant pays rent in accordance with the tenancy agreement, a landlord must not seize any personal property of the tenant or prevent or interfere with the tenant’s access to the tenant’s personal property (''RTA'', s 26(3)). The only exceptions are if the landlord has a court order authorizing the action, or if the tenant has abandoned the rental unit and the landlord complies with the ''RTR'' (''RTA'', s 26(4)).
-==2. Tenant==
+== C. Allowed Rent Increases ==
-Tenants must maintain “ordinary health, cleanliness and sanitary standards” in their rental unit. Tenants must also repair damage caused to the rental unit and property (this includes common areas) by their or their pet’s wilful or negligent acts or omissions, or those of a person permitted by him or her on the rental unit or property (RTA, s 32(3)). There is no duty to repair reasonable wear and tear (s 32(4)).
+Landlords can raise rents in the following circumstances under section 43(1) of the ''RTA''.
-=B. Withholding Rent=
+=== 1. Annual Rent Increase ===
-A tenant cannot withhold rent because of repairs needed unless an Arbitrator gives an order permitting it. Another way to seek repairs can be through the local municipality’s Standards of Maintenance bylaw however this is only the case in some municipalities, for example, Vancouver, the City of North Vancouver, and New Westminster. Tenants should check with the municipality to see if there is a Standards of Maintenance bylaw in place. A tenant can call a local municipality and ask for a free inspection if the repair problem relates to structural defects (requiring a building inspector), health problem (e.g. mould or pests), or fire problem (e.g. fire inspection for fire exits, smoke alarms). The inspection may result in a formal report and may require the landlord to conduct repairs. The inspection report can also be important evidence to present at an RTB dispute resolution when seeking a Repair Order or an Order for reduction in rent.
-NOTE:	There is a risk attached to calling a City Inspector. The inspection could result in the municipality ordering the suite vacated, resulting in an eviction for the tenants.
+A landlord can unilaterally increase rent by a set amount each year as defined in the ''RTR'' (''RTA'', s 43(1)(a)). The percentage for allowable rent increases is usually the inflation rate (Consumer Price Index, or “CPI”), but it is limited to only 3.5% for 2024 (''RTR'', s 22.2(2)). The maximum allowable increase changes each year on January 1 and is usually posted in the preceding September on [https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/rent-rtb/rent-increases this webpage].
-=C. Emergency Repairs=
+The rent increase formula for Manufactured Home Parks is inflation plus the proportionate amount of the increases to regulated utilities and local government levies (''MHPTR'', s 32(3)).
-Before advising any tenant on this course of action, an advocate should be aware that this is a rather complicated area. To qualify, the repairs must fall into the categories below, and must be urgent and necessary for the health and safety of persons or the preservation and use of the property and rental units. Pursuant to s 33, a tenant may conduct emergency repairs without going to dispute resolution if the landlord fails to make repairs within a reasonable time after a tenant has made a reasonable effort on two or more occasions to contact the landlord. Sometimes there is a discrepancy between what a tenant, landlord, and RTB might consider ‘emergency’ repairs. Before a tenant conducts any repairs, he or she should call the Residential Tenancy Branch, speak to an Information Officer, and make note of the Officer’s name and what the Officer tells them. The specific types of repairs that may qualify as emergency repairs are urgent, necessary for the health, safety or preservation of property AND concern:
-*major leaks in the pipes or roof;
+=== 2. By RTB Order ===
-*damaged or blocked water or sewer pipes or plumbing fixtures;
-*malfunction of the central or primary heating system;
-*defective locks that give access to the residential premises;
-*electrical system repair.
-Emergency repair is a complicated area. Tenants must follow the exact procedure under s 33(3) of the RTA or the landlord can make a claim against the tenant. All steps taken should be documented fully. Emergency repairs usually constitute a large repair bill and should only be undertaken by the tenant in the clearest of circumstances. When in doubt, apply first to an Arbitrator for a Repair Order, refer to a Property Use Inspector, or investigate local Standards of Maintenance bylaws.
+Section 43(3) of the ''RTA'' permits landlords to apply to the RTB for an order allowing a rent increase greater than otherwise allowed under s 43(1). The circumstances under which these applications may be made are set out in sections 23-23.4 of the ''RTR''. A landlord may impose this rent increase in combination with an annual rent increase, but may only impose an approved additional rent increase from one of the following two categories at a time:
-=D. Terminating or Restricting Services or Facilities=
+==== a) Circumstances Other Than Eligible Capital Expenditures ====
-A service or facility, as defined in s 1 of the RTA, includes: furniture, appliances and furnishings; parking and related facilities; cable television facilities; utilities and related services; cleaning or maintenance services; maid services; laundry facilities; storage facilities; elevator facilities; common recreational facilities; intercom systems; garbage facilities and related services; and heating facilities or services.
+Circumstances in this category are governed by section 23 of the ''RTR'' and include:
+*incurring financial loss from an extraordinary increase in the rental property’s operating expenses (''RTR'', s 23(1)(a));
+*incurring reasonably unforeseen financial loss from the financing costs of purchasing the residential property (''RTR'', s 23(1)(b)); or
+*the landlord, as a tenant, has received an additional rent increase under this section for the same rental unit (''RTR'', s 23(1)(c)).
-Sections 27(1)(a) and (b) of the RTA provides that a landlord must not terminate or restrict a service or facility if it is essential to the tenant’s use of the rental unit as living accommodation, or providing the service or facility is a material term of the tenancy agreement.
+==== b) Eligible Capital Expenditures ====
-Section 27(2) of the RTA provides that a landlord may terminate or restrict a service or facility other than one referred to in ss 27(1)(a) or (b) if the landlord gives 30 days written notice, in the approved form, of the termination or restriction, and reduces the rent in an amount that is equivalent to the reduction in the value of the tenancy agreement resulting from the termination or restriction of the service or facility. The tenant may dispute the restriction or termination on the basis that the service being restricted or terminated constitutes an essential service.
+If the landlord, in the 18 months preceding their application for dispute resolution, has made a significant capital expenditure, they may be eligible for an RTB order for a rent increase (''RTR'', s 23.1(1)). This 18-month window includes expenditures partially paid for outside the 18-month period, as long as the final payment is paid within the 18-month period.
-See RTB Policy Guideline 22: Termination or Restriction of a Service or Facility.
+The expenditure must be for installing, repairing, or replacing a major system or component of the rental property that is necessary to achieve one of the following purposes:
+*maintaining the residential property in a state of repair that complies with the health, safety, and housing standards required by law in accordance with section 32(1)(a) of the ''RTA'' (''RTR'', s 23.1(4)(a)(i));
+*the system or component has failed, is malfunctioning, or is close to the end of its useful life (''RTR'', s 23.1(4)(a)(ii));
+*reducing energy use or greenhouse gas emissions (''RTR'', s 23.1(4)(a)(iii)(A)); or
+*improving the security of the residential property (''RTR'', s 23.1(4)(a)(iii)(B)).
-=E. Bedbugs=
+Applications shall not be granted where a tenant can show that the need for the capital expenditures arose because of inadequate repair or maintenance on the part of the landlord, or that the landlord has been paid or is entitled to be paid from another source (''RTR'', s 23.1(5)). Capital expenditures may not be claimed again for at least 5 years (''RTR'', s 23.1(4)(c)).
-Bedbugs are an increasing problem in British Columbia, particularly in the West End and Downtown Eastside of Vancouver. Bedbugs are small (about 1/5 inch long) parasites that tend to live in and around bed frames, cracks in walls, along baseboards, and under carpet edges. They are active at night, coming out to feed on sleeping people before returning to their crevices and crannies. Bedbugs are extremely difficult to get rid of, and the extermination process can be frustrating for both landlords and tenants.
+=== 3. By Mutual Agreement in Writing ===
+A tenant may also agree to pay a greater increase than the percentage permitted; this agreement must be writing. RTB PG 37B sets out that a mutually agreed rent increase being recorded in writing should:
+*clearly set out the rent increase (for example, the percentage increase and the amount in dollars);
+*clearly set out any conditions for agreeing to the rent increase;
+*be signed by the tenant, and
+*include the date that the agreement was signed by the tenant.
-==1. Landlord Obligations==
+Because the ''RTA'' otherwise limits the circumstances under which a landlord may increase rent, a tenant is not obligated to agree to a rent increase by mutual agreement if so requested by the landlord.
-Under s 32(1) of the RTA, landlords must maintain the property in a state of repair that complies with health standards and is suitable for human occupation. Although bedbugs are not a public health risk (they do not transmit infectious diseases), they are still considered a pest and an infestation creates unsuitable living conditions. Some municipalities, such as Vancouver, have Standards of Maintenance bylaws that require landlords to get rid of pest infestations. If a landlord is refusing to treat the infestation, a tenant can call their municipality for an inspection and for an order that the building be treated. Each municipality’s bylaws will vary, so it is best to call city hall.
+== D. Improper Rent Increase ==
-Landlords are obligated to bear the cost for treatment of an infestation, provided the tenant cooperates with treatment (see Tenant Obligations below). In Vancouver, the Health Bylaw mandates that only a trained and certified person can spray pesticides in a multiple-unit dwelling. The landlord should not, and legally cannot, do it themselves. There are also other requirements in the Health Bylaw, such as notification in writing 72 hours prior to spraying. The pesticide technician should also adhere to the label on the pesticide bottles.
+If a landlord collects a rent increase that does not comply with the ''RTA'', the tenant may deduct the entire increase from the rent. The tenant should communicate the reason for the deduction to the landlord before taking this form of action, or they may risk being served a 10-day notice to end tenancy for non-payment of rent.
-==2. Tenant Obligations==
+A tenant may not apply for dispute resolution to dispute a rent increase that complies with section 43(1) of the ''RTA''. However, especially in the case of rent increases by mutual agreement, it may be possible that a rent increase is invalid due to being unconscionable or otherwise an attempt to avoid the ''RTA'', of no effect pursuant to section 5; in this case, the tenant should apply for dispute resolution at the RTB. This includes if the mutually agreed rent increase was not imposed in compliance with the other requirements governing rent increases (RTB PG 37B).
-Under s 32(2) of the RTA, the tenant is also obligated to maintain the property in a sanitary condition. This includes notifying the landlord of any suspected infestation. Upon discovery of a bedbug infestation, the tenant is obligated to cooperate with the landlord in treating the infestation. If tenants do not cooperate, they could be found liable for the cost of treatment, or be evicted.  The landlord is obligated to get rid of the infestation unless it can be proven the tenant brought the bedbugs with them when they moved in.
+== E. Timing and Notice of Rent Increases ==
-If a landlord refuses to have the suite or building treated, the tenant can apply to the RTB for an order compelling the landlord to do so, or as noted above can get an order from a city inspector. Vancouver Coastal Health no longer does inspections, but is available to answer questions over the phone at 604-675-3800.
+A landlord must not impose a rent increase for at least 12 months after the previous rent increase, or the tenant’s rent has never been increased, at least 12 months after the rent was first payable (''RTA'', s 42(1)).
+Using the approved form, the landlord must give written notice of any rent increase at least three full months before the increase becomes effective (''RTA'', s 42(2)), including for those mutually agreed to in writing.
+If the landlord gives notice of less than three months or does not comply with the 12-month waiting period described above, the notice of rent increase is invalid and of no effect until it does comply (''RTA'', s 42(4), with its effective date self-correcting to the first day the notice complies with both timing and notice requirements. The tenant should notify the landlord about any self-correcting dates.
+=== 1. Exception: Rent Tied to Number of Occupants ===
+In a tenancy agreement conforming to section 13(2)(f)(iv) of the ''RTA'' where the monthly rent varies according to the number of occupants, the addition of a new occupant is not subject to these rent increase provisions: the timing and notice provisions only apply to rent increases other than those triggered by a new occupant (''RTA'', s 40), and the addition of a new occupant does not reset the period the landlord must wait before imposing another rent increase.
+As of May 16, 2024, landlords are not allowed to make these occupancy-tied rent increases based on additional occupants who were a minor at the time of entering into the tenancy agreement (''RTA'', s 22.1). One result of this provision is that a landlord cannot automatically increase rent per due to the birth of their tenant’s child. See RTB PG 37 for other examples of how this provision prevents landlords from relying on an occupant-based rent rate to automatically adjust rent without affecting other rent increases.
+== F. New Lease with Same Tenant and Location ==
+A landlord and tenant may agree to renew a fixed-term tenancy agreement with or without changes for another fixed term. If a fixed term tenancy does not require the tenant to vacate at the end of the term and no new agreement is entered into, the tenancy automatically continues as a month-to-month tenancy on the same terms (''RTA'', s 44(3)). Rent can only be increased between fixed-term tenancy agreements with the same tenant if the notice and timing requirements for rent increases are met, so entering into successive fixed-term tenancies does not constitute a mutually agreed rent increase under section 43(1)(c) of the ''RTA'' (RTB PG 30).
+== G. Hidden Rent Increases ==
+If the landlord starts to charge the tenant for a service or facility included in the rent or takes away a service or facility included in the rent without decreasing the rent proportionately pursuant to section 27 of the ''RTA'', that may effectively be a rent increase. The tenant may apply for dispute resolution to recover the effective overpayment.
+If the Arbitrator considers that the value of the tenancy agreement has decreased as a result, the Arbitrator can provide relief such as a monetary order in favour of the tenant or an order to restore the terminated service or facility. See also RTB PG 22: Termination or Restriction of a Service or Facility.
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