Insights and best practices for property managers

Under the BC Residential Tenancy Act (Part 3), a landlord may increase the rent in only two circumstances. 

1. First, a landlord may increase a tenant’s rent if at least 12 months have passed since that tenant’s last rent increase for those premises, or since the tenant started to rent the premises. 
2. Second, a landlord may raise the rent any time the premises are re-rented to new tenants, even though it may have been raised less than 12 months prior to the re-rental. However, when a change of tenant occurs, if the rent is not raised at that time, a landlord must wait until the new tenant has occupied the premises for 12 months before collecting a higher rent. The rent cannot be increased merely because a new landlord buys the premises. A change of landlord does not give a right to raise the rent. 

Written notice of an increase must be given to a tenant at least three months before it becomes effective. If insufficient notice is given, or if the increase is imposed earlier than allowed by the Act, the notice is deemed to take effect on the earliest date that would comply with the Act. The Act has been amended so that landlords must now use a prescribed form when serving a notice of a rent increase. 

Under the Residential Tenancy Act Regulation, landlords may increase rent on an annual basis up to an amount equal to the Consumer Price Index (CPI) for British Columbia. Each year, the Residential Tenancy Branch publishes the maximum allowable rent increase based on BC’s CPI at that time. The Act also stipulates that tenants may not dispute at arbitration any increase that complies with Part 3. In certain circumstances, as set out in the Regulation, landlords may apply for approval of additional rent increases. For example, when the landlord has completed significant repairs or renovations or has incurred a financial loss from an extraordinary increase in the operating expenses of the residential property, the landlord may apply to the Residential Tenancy Branch to approve an additional rent increase. Finally, a tenant may agree to a rent increase greater than the prescribed amount. If a landlord collects a rent increase that does not comply with the Regulation, a tenant may deduct the increase from future rent payments or otherwise recover the increase (section 43(5)). 

Rents can no longer be increased above the maximum annual allowable amount between fixed-term tenancy agreements with the same tenant. This protects tenants by preventing landlords from significantly increasing rent from year to year, at the end of the fixed term. Furthermore, landlords are no longer able to apply for an additional rent increase on the basis that the rent is significantly lower than other similar rental units in the same geographic area.