Geographic Increase Clause Removed from the RTA Effective December 11, 2017

On Monday December 11th, 2017 the Residential Tenancy Branch (RTB) published an amendment to the regulations removing the landlord’s ability to apply for an above guideline rent increase because the rent is significantly below average rent in its geographic area. This change does not affect standard rent increases, nor does it affect the other reasons a landlord can apply for an additional rent increase.

LandlordBC has been working with the Honourable Selina Robinson, Minister of Municipal Affairs and Housing to ensure that professional and responsible landlords can operate in a business environment whereby they can be assured that all landlords are adhering to the highest ethical standards.  We have been disappointed to learn that a growing cohort of our industry is deliberately abusing the geographic increase clause of the RTA through intimidation and other inappropriate tactics. This behavior is not only unnecessarily harmful to good tenants, it is harmful to the broader rental housing industry. We understand the reasoning for the Minister’s decision and support it.

Technical Information Landlords Need to Know

Rent increases in British Columbia are controlled by the Residential Tenancy Act (RTA) and Residential Tenancy Regulations. Rent can be increased once every 12 months and at an amount prescribed in the regulations, 4% for 2018. There is also a process landlord’s can use to raise rent above the regulated percentage with the approval of the Residential Tenancy Branch.

The application for an Additional Rent Increase utilizes the Dispute Resolution process though it has a higher application fee of $300 plus $10 for each affected rental unit to a maximum of $600. This process allows a landlord to apply for a higher than regulation rent increase in strictly defined situations. These reasons are:   NOTE: ONLY SECTION A. REMOVED EFFECTIVE DECEMBER 11, 2017:

  1. after the rent increase allowed under section 22 [annual rent increase], the rent for the rental unit is significantly lower than the rent payable for other rental units that are similar to, and in the same geographic area as, the rental unit;
  2. the landlord has completed significant repairs or renovations to the residential property in which the rental unit is located that
    1. could not have been foreseen under reasonable circumstances, and
    2. will not recur within a time period that is reasonable for the repair or renovation;
  3. the landlord has incurred a financial loss from an extraordinary increase in the operating expenses of the residential property;
  4. the landlord, acting reasonably, has incurred a financial loss for the financing costs of purchasing the residential property, if the financing costs could not have been foreseen under reasonable circumstances;
  5. the landlord, as a tenant, has received an additional rent increase under this section for the same rental unit.

If you are a member of LandlordBC and require additional information about the December 11th, 2017 revision, please contact our dedicated Help Line.