Oct 25, 2012

Imbalance in residential tenancy rights enforcement in BC


Yesterday some media outlets reported that the Residential Tenancy Branch has conditionally waived the first (and to my knowledge only) administrative penalty it has issued.

BC’s Residential Tenancy Act was amended in 2006 to allow the Branch to issue administrative penalties, essentially monetary fines, against landlords or tenants that contravene the Act or repeatedly ignore Branch orders. The fines can be substantial: up to $5000 per day of infraction. Normally, if the Branch issues an order against a party, the only way to enforce that order is through court. One of the purposes of the penalties was to provide an enforcement mechanism within the Branch system, so that parties do not need to proceed to court to enforce orders already made by adjudicators at the Branch. The penalties created a clear consequence for failing to comply, a very positive change if widely implemented.

The Branch imposed its first administrative penalty in March 2012 against a landlord who had ignored previous Branch orders to make repairs to an apartment building with ongoing water ingress issues. The penalty was significant: a total of $115,000, or $500 per day for the 220 days the Branch found the landlord to be in violation of its order. However, the Branch has now made public that it has entered into an agreement with the landlord to waive the entire penalty if he now completes the apartment building repairs within a set timeframe and is not subject to further administrative penalties in the next two years.

The case highlights an existing problem within the residential tenancy legislation in BC. The current legislative scheme, designed to strike a balance between landlords and tenants while recognizing that a contract for residential housing is fundamentally different than other consumer contracts, fails to strike balance when it comes to the consequences for landlords and tenants. While the Act sets out clear obligations and rights for both parties, the means to enforce those rights, and the consequences for ignoring them, are not well balanced.

If tenants breach their tenancy contract or the Act, for example by failing to pay their rent, the consequences are clear and they are swift. The Branch can issue an eviction order (often enforceable in as little as two days) and if the tenant fails to vacate the rental unit, there is a summary process available for the landlord to hire a bailiff and evict the tenant.

However, if a landlord fails to meet his obligations, like providing a rental unit in reasonable repair that complies with health, safety and housing standards, the primary remedy for a tenant is a Branch order that the landlord meet his obligations. Because such an order is enforced as an order of the BC Supreme Court, the process is not straight forward and likely requires significant legal assistance. While the Branch can also award a partial rent reduction to individual tenants who apply and can show they are directly impacted by the repair or maintenance issue, such an order for one or a handful of tenants does little to persuade a landlord to undertake major building repairs.

This difficulty in enforcement is precisely why the administrative penalties were added to the Residential Tenancy Act. They were designed to be “the stick” (monetary fines) that creates an incentive for landlords or tenants to comply with orders that would otherwise be very difficult to enforce. Unfortunately, in the four years since the penalties became available, the Branch has only issued one penalty as far as I know. Even more concerning, it seems that the Branch has now waived that one penalty in exchange for the landlord simply complying with the order that was made 18 months ago, and complying with the Act going forward. In other words, there have been no tangible consequences for this landlord ignoring the Branch’s order that he comply with his obligation to provide healthy and safe rental units in a reasonable state of repair. One wonders what incentive a landlord now has to complete expensive ordered repairs if, at worst, the Branch will waive any penalty imposed in exchange for him eventually completing the repairs, and at best, the Branch may not impose any penalty at all.

To a tenant who may have been trying to get his landlord to make much needed repairs to his rental unit for years, and who is then evicted by a bailiff because he is unable to pay his rent on time, the balance the Residential Tenancy Act attempts to strike between the rights of landlords and tenants rings hollow.

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