The B.C. Government has announced that the ban on evictions for non-payment of rent will end on September 1, 2020. This means that beginning September 1, 2020, tenants will be required to pay their rent in full. The repayment framework is set out in Order in Council No. 449, which was approved and ordered on July 30, 2020. So what do landlords and tenants need to know when it comes to their repayment obligations?
The Rent is Due
The state of emergency began on March 18, 2020. On March 30, 2020, Ministerial Order M089 came into force and effectively prohibited landlords from serving any end of tenancy notices, including those for non-payment of rent. Tenants who have not paid their rent or utilities in full since March 30, 2020, have been protected from eviction. This protection, however, is being lifted on September 1, 2020. Below is everything landlords and tenants need to know to navigate the re-payment process:
- Landlords must provide tenants with a repayment plan for any outstanding rent.
- Repayment plans must set out the total amount of rent owed, the date the first payment is due, and the amount the tenant will be expected to pay in instalments each month.
- If a landlord and tenant entered into a prior agreement for outstanding rent and the prior agreement does not address the entire amount of outstanding rent, then the landlord must provide the tenant with a repayment plan with respect to the outstanding rent not addressed in the prior agreement.
- Landlords must give tenants until July 2021 to repay all outstanding rent.
- Landlords may cancel a prior agreement by giving tenants a repayment plan for the entire amount of outstanding rent.
- Tenants may cancel a prior agreement by giving landlords a repayment plan for the entire amount of outstanding rent.
- Repayment plans must be served in accordance with section 89 of the Residential Tenancy Act-in person, via registered mail, a method approved by a director's order etc.
- Once provided with a repayment plan, tenants must make their first payment no later than 30 days after they receive the repayment plan. For most renters, the first instalment will be due October 1 (assuming their landlord provides them with a repayment plan before the end of August).
- Each instalment must be paid on the same date that rent is due under the tenancy agreement.
- Landlords and tenants may negotiate a flexible repayment plan, if necessary. For example, the instalment amount due each month may differ or the length of the repayment period may be extended beyond July 2021.
- Landlords and tenants may only amend
the repayment plan in limited circumstances:
- To extend the repayment period;
- To change the amount payable in each instalment if the amount payable in earlier instalments is less than the amount payable in later instalments;
- To change the dates of instalments as long as the date of the first instalment is not earlier than 30 days from the date the repayment plan is served.
- Landlords may serve their tenants with a Notice to End Tenancy for Non-payment of rent in the event that a tenant misses an instalment payment.
No Increase Just Yet Please
Despite the above changes, the ban on rent increases will remain in place until December 2020. For landlords who want to issue a rent increase beginning December 1, 2020, a rent increase may be issued in the interim period; however, it cannot come into effect until December 1, 2020. For residential tenancies, the standard allowable rent increase for 2020 is 2.6%. Landlords should also note that they cannot retroactively apply a rent increase. In addition, landlords may need to adjust their annual rent increase timelines to account for this deferred December date since the Residential Tenancy Act prohibits landlords from increasing the rent more than once in a 12 month period. This means that rent increases which would normally occur every spring or summer will now be pushed to a winter schedule.
What about Common Areas/Amenities?
When the state of emergency began, landlords were provided with the ability to restrict access to common areas/amenities in order to prevent the spread of COVID-19. Moving forward, landlords will continue to be able to restrict access to common areas/amenities with no rent reduction owing to the tenant provided that the restriction is related to these COVID-19 protections.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.