Rent Increase in Residential Tenancies (19:VIII)

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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