Renting out a suite in your home or an investment property can be a great way to earn some extra income or afford a property that may otherwise be out of reach, but being a landlord can also be fraught with unanticipated challenges. Inexperienced landlords may not realize the limitations on their ability to do what they want with their property once a tenancy is involved.

Residential tenancies in British Columbia are governed by the Residential Tenancy Act, S.B.C. 2002, c. 78 (the “RTA”), whether or not there is a written tenancy agreement in place. The RTA imposes certain terms on all tenancies, which landlords and tenants cannot contract out of.

One of the most significant restrictions in the RTA is on how a landlord can end a tenancy. Often, landlords believe that they can end a tenancy without a good reason. The RTA sets out the only valid reasons for ending a tenancy, including non-payment of rent, cause, and landlord’s use of property.

Ending a tenancy for cause can prove challenging, except in the clearest of circumstances or where a tenant is repeatedly late paying their rent. For example, the RTA allows a landlord to end a tenancy for cause for material breaches of the tenancy agreement. However, a landlord must have given a written warning to the tenant that they have breached a material term, and give them a “reasonable” amount of time to correct the breach. There is little guidance about which terms may or may not be material, or what may constitute a “reasonable” amount of time.

Where a landlord believes they have cause to end a tenancy, they must deliver a one-month notice, in the correct form, which becomes effective the last day of the next full month. For example, a notice served on March 1 would not be effective until April 30. Given the recent backlogs at the Residential Tenancy Branch (the “RTB”), which has exclusive jurisdiction over most things relating to residential tenancies, if a tenant decided to challenge a notice, the hearing may not be scheduled until many months in the future. Accepting rent without a “use and occupancy only” receipt during this time could cause the tenancy to be inadvertently reinstated.

RTB arbitrations are scheduled for one hour by telephone, and can stretch into multiple hearings if the issues are complex or the evidence voluminous. If the arbitrator grants an order of possession in favour of a landlord and the tenant does not leave voluntarily, the order must be converted to a writ of possession and can only be enforced by a bailiff.

Ending a tenancy for landlord’s use of property comes with its own challenges. Landlord’s use of property means that the landlord or their spouse, child or parent, or purchaser will occupy the property for residential purposes. Steps must be taken within a “reasonable” amount of time to accomplish the stated purpose, and the landlord must continuously use the property for that purpose for at least six months. Notices cannot be unilaterally withdrawn after they are given.

There is a good faith requirement for ending the tenancy for landlord’s use of property, and failure to act in good faith may result in a tenant being granted a compensation order in the amount of 12 times their monthly rent, except where there were extenuating circumstances. Arbitrators have no discretion to vary that amount, so the penalties can be hefty where the monthly rent was significant.

Using a property for a different purpose from that written on the notice will attract the 12-month penalty. Ending the tenancy to turn the rental unit into a short-term rental is not a valid reason to end the tenancy under the RTA, even if used occasionally by the landlord, and will attract the 12-month penalty.

To avoid some of these pitfalls, landlords should screen their tenants carefully, double-check their paperwork, and ensure they get legal advice from someone who practises in the area prior to trying to end a tenancy for any reason.