Real Estate Bulletin
On July 16, 2020, the Province of British Columbia (the "Province") introduced a repayment framework (the "Repayment Framework") for residential landlords to recover unpaid rent and utilities during the COVID-19 pandemic. This plan is in response to the Province's moratorium on evictions due to non-payment of rent, which is expected to be lifted on September 1, 2020.
The Repayment Framework is designed to both enable landlords to recuperate their losses and allow tenants to maintain their housing. The Province also announced that the restriction on rent increases will be extended until December 2020, and landlords will continue to have the ability to restrict access to common spaces. See our bulletins on the moratorium on evictions and the housing initiative.
Highlights from the Repayment Framework include:
1. End of Moratorium on Evictions for Non-Payment of Rent - The Province will lift the moratorium on evictions for non-payment of rent by September 1, 2020. Landlords will now be able to issue a Notice to End Tenancy for unpaid rent or utilities if the tenant fails to pay full rent on September 1, 2020. A tenant cannot be issued a Notice to End Tenancy for unpaid rent during the emergency period (March 18, 2020 and ongoing) (the "Emergency Period") unless the tenant has defaulted on the repayment plan (as described below). Furthermore, a landlord cannot charge a late fee for any unpaid rent during the Emergency Period.
2. Rent Repayment Plan - Landlords are required to provide a written repayment plan (the "Repayment Plan") to tenants who have not paid full rent and/or utilities since the beginning of the Emergency Period (March 18, 2020). The repayment plan allows tenants to make monthly payments for outstanding rent. The repayment plan will set out:
- the total amount of rent and/or utilities still owed to the landlord from the Emergency Period;
- the amount of the monthly installment payments; and
- the date the first installment payment is due and the time of the month where each installment would be paid.
If the landlord and the tenant previously entered into a prior agreement for unpaid rent, such agreement can be replaced with a new agreement for all arrears.
3. Flexibility in Amending the Repayment Plan - In recognition of existing agreements between landlords and tenants for repayment of unpaid rent, the Province is allowing some flexibility for landlords to adjust the Repayment Plan. The landlord and tenant may only amend the Repayment Plan to:
- extend the end date of the Repayment Plan past July 2021;
- change the monthly installment amount to allow earlier installments to be lesser amounts; and
- delay the start of the repayment installments beyond 30 days.
4. Notice of Repayment Plan - A landlord must provide the tenant with 30 days' notice of the repayment plan before the first installment payment. This means that most repayment installments will not begin until October 1, 2020, assuming that the Repayment Plan is provided by the Landlord before the end of August 2020.
5. Length of Repayment Period - A tenant has until July 2021 to repay any outstanding rent (at the earliest), as long as the monthly installments are paid.
6. Default of Repayment Plan - A tenant cannot be issued a Notice to End Tenancy for unpaid rent during the Emergency Period unless the tenant has defaulted on its Repayment Plan.
7. Restricted Rent Increases - Annual rent increases continue to be restricted. A landlord may give notice for a rent increase, but such rent increase will not come into effect until December 1, 2020.
8. Restricted Use of Common Areas - A landlord can continue to reasonably restrict or schedule the use of common areas to support physical distancing during the COVID-19 pandemic.
Originally published 03 August, 2020
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.
