As per the new changes in Residential Tenancy Act, the amount of eviction notice from landlord to tenant on the basis of personal use has been raised from 2 to 4 months. And, the amount of time tenants have to dispute the eviction notice has been increased from 15 to 30 days. In addition, the new mandate also requires landlords to generate the eviction notice using the new Landlord Use Web Portal. Now, less than half a month later, the BC Real Estate Association (BCREA) has voiced concerns about the new changes.
The changes in the Residential Tenancy Act that British Columbia announced on July 3 came into effect on July 18. A hint about these changes was first given in April. However, nobody knew at the time how much of an increase it would be.
Expressing its concern, BCREA wrote in the open letter, “The new legislation makes no distinction between a buyer of a tenanted unit who just wants to move into their new home and a landlord who might be using a bad-faith eviction as a tool to raise rents beyond the allowable limit. This lack of clarity alone has been the subject of consternation among buyers who aren’t evicting tenants for some nefarious purpose. The conflating of these two very distinct purposes is unfair to buyers who just want to occupy the homes they have purchased within a reasonable timeframe.”
The Association further added, “While this is a problem for all buyers, this is a particular problem for high-ratio-insured buyers, including first-time buyers, who generally need mortgage default insurance to secure their financing. Mortgage insurers do not insure rental properties, and the extended notice period makes it especially difficult for buyers to get vacant possession of their properties within the time allowed by financial institutions. Without the mortgage insurance in place, buyers, and especially first-time buyers, will not be able to secure the financing they need to complete their purchase.”
Canadian Mortgage Brokers Association of British Columbia (CMBA-BC) echoed the concerns raised by BCREA. CMBA-BC also sent an open letter addressed to the Ministry of Housing.
CMHA-BC said, “In practical terms, most lenders allow for a 90-120-day rate hold period when approving mortgages for real estate purchasers. Adding a four-month notice period to terminate tenancies complicates the mortgage approval process, potentially leading to funding denials or increased costs for purchasers. These changes will impact first-time homebuyers the most as these are the most typical buyers of previous rental properties.”
BCREA made a series of suggestions to improve the new rule including:
- Conventional mortgage buyers to be allowed for vacant possession within three months
- High-ratio insured to be allowed to continue to have a two-month notice period
- Introduce new privacy protections
- Paper-based alternative to the Landlord Use Web Portal
- Eliminate the requirement for buyers to report who intended to occupy their own unit.
[Editor’s Note: The Province made an announcement on August 1 regarding the shortening of the eviction notice period from four months to three months and the dispute period from 30 days to 21 days, effective August 21 (only when the eviction notice is issued on behalf of a purchaser). The four-month and 30-day dispute period rule that came into effect on July 18 will still apply to evictions for personal or caretaker use.]
