Tenancy Agreements (19:IV)

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

A. General

A “tenancy agreement” is defined as “an agreement, whether written or oral, express or implied, between a landlord and a tenant respecting possession of a rental unit, use of common areas and services and facilities, and includes a licence to occupy a rental unit” (RTA, s 1). Like any valid contract, there must be an offer, acceptance, and consideration.

A tenancy agreement gives the tenant the right to use, enjoy, and dispose of the property for some duration. The landlord has a freehold in reversion, allowing them to sell their property to someone else. A tenancy continues under the same terms when a rental property is sold in BC. Accordingly, the landlord cannot terminate a lease simply because they want to sell the property; instead, the new owner will take over as the landlord. No new lease is required to be drafted and signed, though this may happen if both parties agree.

1. Two Methods of Creating a Tenancy Relationship

a) By Written Contract

Although section 1 of the RTA contemplates tenancy agreements that are written, oral, or implied, a landlord must prepare in writing any tenancy agreement entered into on or after January 1, 2004 (RTA, s 13(1)).

Vague terms of the tenancy agreement may be framed in the tenant's favour using the principle of contra proferentem, meaning that the agreement will be strictly construed against the party who provided the agreement's wording.

b) By Implied Contract

Notwithstanding the obligation to prepare a written agreement, where there has been offer, acceptance, and some kind of meaningful consideration, the law may imply the existence of a valid tenancy agreement. The law seeks to recognize and validate the relationship where possible, even where the requirement for a written tenancy agreement has not been met.

Oral contracts are hard to prove. If something is important, it should be recorded in writing.

In a fixed term tenancy that does not require the tenant to vacate on the last day, if the landlord and tenant have not entered into a new tenancy agreement, they are deemed to have entered into a month to month tenancy on the same terms (RTA, s 44(3)).

2. Freedom of Contract and the Agreement

Parties may use a standard form tenancy agreement with or without an addendum for additional terms, or they may write their own. Parties are free to add and alter the terms, covenants, and conditions, subject to common law and statute restrictions, which include standard terms that the RTA and RTR require to be in every tenancy agreement.

a) What Tenancy Agreements Must Contain

The standard terms are the clauses that every tenancy agreement must contain (RTR, s 13(1)), and are found in the schedule of the RTR. The standard terms cover key rights and responsibilities of both parties, including repairs, payment of rent, rent increases, security deposits, assignment or sublet, occupants and invited guests, entry of the residential premises by the landlord, locks, ending the tenancy, and the application of the RTA. A tenancy agreement cannot be amended to change or remove a standard term (RTA, s 14(1)), making them a minimum standard that all tenancy agreements must achieve.

All tenancy agreements must comply with the requirements laid out in section 13(2) of the RTA. In addition to mandating that the tenancy agreement include the standard terms, a tenancy agreement must also contain the landlord and tenant’s agreement over certain key terms, such as the parties’ contact information, the duration of the tenancy, the amount and due date of the rent, and the amount and due date of any security or pet damage deposits to be paid.

Form RTB-1 is a standard tenancy agreement form that only contains the standard terms along with fillable boxes to complete the remaining mandatory terms; additional terms can be added as an addendum, or alternatively, the parties could use any other written document that conforms with the requirements from the RTA and RTR. More information about tenancy agreement requirements and Form RTB-1 can be found here.

b) No Contracting Out of Tenancy Legislation

As it is not possible to contract out of the RTA or RTR (RTA, s 5), a tenancy agreement cannot have terms that contradict the RTA or RTR. A tenancy agreement cannot be subsequently amended to change or remove a standard term (RTA, s 14(1)).

A tenancy agreement might purport to contain terms contrary to tenancy legislation, and this may not be identified in some cases until dispute resolution. A tenant is free to argue that a term violates the RTA or RTR and should, therefore, be void.

c) Amendments and Subsequent Contracts

The parties may enter additional or subsequent oral or written contracts on top of the tenancy agreement. If an RTB Arbitrator determines the terms are reasonable and not unconscionable, as defined within section 3 of the RTR, new landlords or tenants that take over or enter into the same tenancy agreement would be bound by the subsequent contract.

Changes in the tenancy agreement must be agreed upon by both the landlord and tenant (RTA, s 14(2)), in writing, and signed and dated by both parties. Generally, changes are only enforceable if both parties offer something in return for the other; however, a change without fresh consideration may be enforceable in the absence of duress, unconscionability, or other public policy concerns (Rosas v Toca, 2018 BCCA 191 at para 183).

d) Pets

If the tenancy agreement is silent about pets, then the tenant can obtain one. Tenancy agreements are allowed to include terms that prohibit pets or restrict the size, kind, or number of pets a tenant may keep on the residential property, or otherwise govern the tenant’s obligations regarding keeping a pet on the rental property (RTA, s 18(1)). This is subject to the Guide Dog and Service Dog Act, SBC 2015, c 17 (RTA, s 18(3)), which in section 3 prohibits a person from denying tenancy or from discriminating with respect to a term of the tenancy against a person who intends to keep a guide dog or service dog in the rental unit.

e) Cannabis

As of October 17, 2018, personal possession of cannabis is legal in Canada. Accordingly, changes to the RTA were implemented around growing and smoking cannabis.

If a tenancy agreement entered into prior to legalization includes a clause prohibiting or limiting smoking and did not explicitly allow for smoking cannabis, then that clause is deemed to apply to smoking cannabis in the same way (RTA, s 21.1(2)). Vaporizing a substance containing cannabis is not “smoking cannabis” (RTA, s 21.1(3)).

Most tenancy agreements entered into prior to legalization are deemed to contain a term prohibiting growing cannabis plants in or on the residential property. There is an exemption for existing operations in or on the residential property that met the following conditions on the day before legalization:

• the tenant is growing one or more medical cannabis plants (RTA, s 21.1(4)(a));
• growing the plants is not otherwise a violation of the tenancy agreement (RTA, s 21.1(4)(b));
• the tenant is authorized under federal law to grow the cannabis plants in or on the residential tenancy (RTA, s 21.1(4)(c)); and
• the tenant is in compliance with federal law with respect to the medical cannabis (RTA, s 21.1(4)(c)).

3. Operation of Tenancy Agreement Terms

A term in a tenancy agreement consists of a promise by a person that a certain thing must or must not be done.

a) Material Terms

From RTB PG 8, a material term is defined as a term of the tenancy agreement that, at the time of entering into the tenancy agreement, both parties agree is so important that the most trivial breach of the term entitles the other party to terminate the agreement.

Not all terms of a tenancy agreement are material terms. The circumstances surrounding the creation of the tenancy agreement and the importance of the term in the tenancy agreement as a whole are more relevant to whether the term is material; meanwhile, the consequences of a breach are less relevant. Although RTB PG 8 states that whether the tenancy agreement declares the term to be material is less relevant, Arbitrators are likely to consider a term material if the agreement flags it as such. The same clause can be a material term in one tenancy but not material in another.

b) Express, Implied and Statutory Terms

Valid express terms override any implied terms or “usual terms” that might otherwise apply at common law. For residential tenancies, the RTA deems some express terms to be unenforceable. Furthermore, the terms that the RTA deems to be terms in every agreement override any express or implied term to the contrary.

For tenancies not governed by the RTA, a court will find implied obligations and insert the usual terms if the parties have failed to expressly agree to certain matters.

c) Unenforceable Terms

A term of the tenancy is unenforceable if:

• the term is inconsistent with this RTA or the RTR (RTA, s 6(3)(a));
• the term is unconscionable (RTA, s 6(3)(b)); or
• the term is not expressed in a manner that clearly communicates the rights and obligations under it (RTA, s 6(3)(c)).

The definition of “unconscionable” for the purposes of determining whether a term of a tenancy agreement is enforceable is “if the term is oppressive or grossly unfair to one party” (RTR, s 3). Some of the factors determining whether a term meets this standard can include (RTB PG 8):

• whether it grossly impacts the health and living quality of one party;
• whether there is a rational basis for the term to exist in the agreement; or
• whether the term is so one-sided that it oppresses or exploits the party with weaker bargaining power.

The following are examples of express terms that are void and unenforceable:

• a term purporting to hold that the RTA does not apply to the agreement or attempts to avoid the RTA (RTA, s 5);
• that the next payable rent becomes immediately due if a tenant fails to comply with a term of the tenancy agreement (RTA, s 22);
• that the landlord can seize the tenant’s personal property for rent owing (RTA, s 26(3)(a));
• terms that impose unreasonable restrictions on guests or impose a fee for having guests stay overnight (RTB PG 8); or
• for a fixed term tenancy, any vacate clauses that require the tenant to move out at the end of the tenancy unless:
  • The tenancy agreement is a sublease agreement; or
  • The fixed term tenancy was created in circumstances where the landlord or landlord’s close family plans in good faith to occupy the unit after the tenancy ends (RTR s 13.1).

B. Protecting the Tenant During Agreement Formation

A third party may accompany a potential tenant during a rental unit showing, so there is a witness as to the landlord’s representations made during the showing. Tenants should get the landlord’s promises in writing if possible, but note that landlords are not obligated to provide them in writing.

After establishing the tenancy and before the tenant moves their personal possessions into the rental unit, the landlord and tenant must jointly conduct a condition inspection and fill out and sign the RTB’s Condition Inspection Report (RTA, s 23). This report notes the condition of various elements of the rental unit, such as what needs to be repaired. It is a good idea to take photographs at the initial move-in inspection as well as the move-out inspection. The landlord must provide the tenant with a copy of the Condition Inspection Report within fifteen days (RTA, s 23(5)).

1. Illegal Application Fees

A potential landlord cannot ask a renter or potential renter for application or processing fees relating to the following:

• accepting a tenancy application (RTA, s 15(a));
• processing the application (RTA, s 15(b));
• investigating the applicant’s suitability as a tenant (RTA, s 15(c)); or
• accepting the person as a tenant (RTA, s 15(a)).

If someone has paid an application fee and the landlord will not give it back, they can apply for dispute resolution to have it returned. Applicants will need to know the landlord’s proper name and address and have proof that the fee was paid. If a landlord does this as a business practice, the tenant should report this to the director of the RTB, or to the RTB’s Compliance and Enforcement Unit (CEU), who can launch an investigation. For more information about the CEU, see here.

© Copyright 2024, The Greater Vancouver Law Students' Legal Advice Society.