Residential Tenancies Branch

Section 13 

Rent Regulation

Sub-Section 13.13

Unauthorized Rent Increases

  Legislation

s. 52, 140, 185, The Residential Tenancies Act

  Definitions

Allowable rent: the maximum amount a landlord can charge for a rental unit; this amount is based on:

• the guideline increases the landlord takes after giving a tenant three months’ written notice; or
• an Order the Branch issues, setting the rent.

Anniversary date: the date on which a landlord is entitled to increase the rent on a rental unit. In some residential complexes, all units have the same anniversary or rent increase date. In other complexes, the anniversary dates may be spaced throughout the year. A landlord can usually increase rent for a rental unit only once every 12 months. A landlord can change the anniversary date on a rental unit by waiting more than 12 months between rent increases. For example: The anniversary date on a particular unit was September 1, 2003. The landlord wanted to change the anniversary date to January 1 to coincide with the anniversary dates on the other units in the complex. To change the date, the landlord did not increase the rent on September 1, 2003 but waited for the increase until January 1, 2004.

Annual rent increase guideline: the percentage that a landlord can increase rent without applying to the Branch for approval. The Government sets the amount each year. The guideline takes effect on January 1. For an explanation of how the annual rent increase guideline is calculated, click here. A landlord can apply for a larger increase if they can show that the guideline will not cover their increases in expenses. The guideline applies to most rental units, including apartments, single rooms, houses, duplexes, mobile homes and mobile home lots. The Residential Tenancies Act does not apply to rent increases on land leases.

Order: a written decision the Branch issues when it holds a hearing or determines a matter. The Branch gives written reasons for the decision.

Order to redirect rent: when the Branch orders a tenant or tenants to pay their rent to the Branch, instead of to the landlord; when the tenant receives an Order and pays the Branch, rent is considered paid.

Registry :a Branch computer system that records information on the rents charged for rental units.

Rent: the amount of money paid by a tenant to a landlord for the right to occupy a rental unit and the use of common areas, services and facilities; rent includes any service/facility for which the tenant pays a separate charge (For example: parking, storage locker.)>

Policy

When the Branch receives rent information, including Notice of Rent Increase and Notice to New Tenant forms, the Branch enters the information in its Registry. When the Branch enters the information received, it doesn’t mean the Branch has approved the rent. The Branch can’t approve the rent because it can’t be certain that the tenant received the required notice of the increase and that the information is correct. The Branch can only be certain about the allowable rent after issuing an Order setting the rent.

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The Branch reviews the rent information filed with the Branch if the information suggests that tenants may have been or, are about to be charged, more than the allowable rent.

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The Branch also reviews the rent information if someone has a complaint or question about the rent a landlord is charging.

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The Branch calls this rent review process "rent compliance". Here are some examples of the most common "rent compliance" situations:

• The landlord doesn’t give the tenant three months’ written notice of a rent increase.

• A landlord withdraws or reduces a service that is included in a tenant’s rent, without applying to the Branch to fix the value of the withdrawal.

There are two possible situations:

1.  The tenant is asked to pay extra for the service that was      included in the rent. For example: There is a recreation      room in the building which is open to all tenants. The      landlord installs a security system and tells tenants      they must now buy monthly passes to use the      recreation room.

2.  The tenant continues to pay the same rent, but has a      service or privilege removed or reduced. For example:      The rent includes cable TV. The landlord cancels the      cable service. Or, the landlord reduces the drying time      on the dryers.

• A landlord increases the rent before the anniversary date. For example: The anniversary date on a rental unit is May 1. The landlord increases the rent on April 1.
  

• A landlord increases the rent more than once in 12 months. For example: A landlord increases rent on May 1. The landlord then raises the rent again on September 1.

• The landlord doesn’t give a tenant the information required on a Notice of Rent Increase or a Notice to New Tenant form.

• The landlord increases the rent to the average of other similar units, but the Branch’s registry doesn’t’ have information that is consistent with the amount the landlord shows as the average.
  

• The landlord increases the rent for a new tenant because the complex has fewer than four units, but the Branch’s registry doesn’t have information on the number of units in the complex.

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When a landlord gives a tenant a Notice of Rent Increase, the landlord must also send a copy to the Branch. In some cases, a landlord may give the tenant the notice, but neglects to send the form to the Branch. If the Branch does a review, its records will not be complete. If the landlord doesn’t send the form to the Branch, the Branch may decide not to roll the rent back if:

• the landlord took only guideline increases; and


• the landlord can demonstrate that they gave the tenant the required notice.

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When the Branch reviews rent, the Branch may consider any possible unauthorized rents the landlord charged in past years. The Branch reviews:

• information from its Registry;


• information gathered from current or previous tenants or their representatives; and


• information received from the landlord.

If the landlord refuses to provide information on request, the Branch may attend the landlord’s place of business to inspect the records for the residential complex. If the landlord continues to refuse access, the Branch might consider, as a last resort, applying to the Courts for an Order authorizing access.

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When the Branch reviews the rent to determine if there’s an unauthorized rent increase, the Branch considers:

• the maximum allowable rent during the relevant period;

• the rent the landlord actually collected during that time;

• the amount of money, if any, the landlord must refund to the current tenant or previous tenants; and

• how the landlord must repay the tenants (i.e. rent setoff or refund).

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If someone is thinking about buying a rental property, they should ask the Branch to check its Registry for information on the property.  A new landlord is liable if a previous landlord didn’t comply with The Residential Tenancies Act. If there is an unauthorized rent increase, the Branch may:

• roll back the rent on the residential complex to the date of the first unauthorized rent increase;

• order the new landlord to repay unauthorized rent to tenants; the new landlord’s liability to repay rent is limited to a period of two years before they took over the property; and

• order the previous landlord to repay unauthorized rent to tenants.

If the landlord can show that the tenants received proper notice of the rent increases, the Branch may allow the landlord guideline increases.

For example: A new landlord purchases a residential complex on March 1, 2004. The new landlord believes the monthly rent on all their units is $472.00. In May 2004, the Branch becomes aware of a possible unauthorized rent increase which happened in 1999. On January1, 1999, the former landlord increased the rent from $375.00 to $450.00. This was an increase above the guideline, but the former landlord didn’t apply to the Branch. The former landlord then took guideline increases from 2000 to 2003. The former landlord provides the Branch with copies of the notices of increase in rent they gave the tenant.

The Branch orders the new landlord to repay the tenants the unauthorized rent collected since March 1, 2002. The Branch also orders the former landlord to repay the unauthorized rent collected from January 1, 1999 to February 28, 2002.

The following chart illustrates the effect of the rent roll back:

Since the former landlord may be directly affected by a Branch Order, the Branch sends them a copy of the Order too.

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If the landlord applies for an increase above the guideline and the Branch is reviewing any of the rents, the Branch won’t process the rent increase application until the review is complete and the landlord adjusts any unauthorized rents.

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If the Branch finds that the landlord improperly increased rent on one unit, the Branch may review and set the rents on other units in the complex too.

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Section 140.0.1 gives the Branch and Commission the discretion, under certain specific circumstances, to allow a landlord a guideline rent increase when the landlord does not meet all the requirements of the Act for giving a Notice of Rent Increase (NORI) or a Notice to New Tenant (NTNT).  This section is intended to give a landlord “one-time relief” from certain requirements of the Act.  The authority under the section will only be used when:

• it is the most reasonable and expeditious method of resolving a compliance matter; and

• there is no unfairness to tenants.

If the Branch/Commission allows the landlord the guideline rent
increase(s), the Branch and Commission will notify the landlord that they must fully comply with the requirements of the legislation for all future NORI and NTNT.  The Branch/Commission will not extend its discretion to the same landlord after rent compliance issues have been resolved under Section 140.0.1

The Branch/Commission may allow a guideline increase if the landlord gave the tenant written notice of the rent increase on an incomplete NORI or in a letter or tenancy agreement renewal.  The Branch/Commission must be satisfied that:

• the tenant received the notice at least three months before the rent was increased; and

• the previous rent increase was at least 12 months before the effective date of the proposed rent increase.

If the landlord did not give the required notice on time or increased the rent before the anniversary date, the Branch/Commission may adjust the date of the rent increase during its review.

The Branch/Commission must also be satisfied that the landlord’s failure to give the required notice has not resulted in unfairness to tenants.  When appropriate, the Branch/Commission may contact the current tenants of a rental unit/complex.  The Branch/Commission will ask tenants about the rent increase notice they received and invite them to submit any comments they want the Branch/Commission to consider.  In some cases, the Branch/Commission may also speak with previous tenants. In determining whether there was any unfairness, the Branch/Commission may consider:

• if the notice the landlord provided to the tenant contained, at the very least, the date of the proposed increase and the amount of the new rent;

• whether or not the tenant would be prejudiced by a guideline rent increase; and

• any other factors that the Branch/Commission consider relevant.

Once the Branch/Commission completes its review, it may issue an order setting the rent for the rental unit and ordering the landlord to return any resulting overpayments to the tenants.

Procedure

Overview   

The Branch receives information that suggests a landlord may have charged or has proposed to charge more than the allowable rent. An officer collects, reviews and verifies information. The officer calculates the correct rent. If there is an overpayment, the officer tries to get an agreement with the landlord to refund the overpayment to the tenant. If the landlord won’t agree, or doesn’t comply with an agreement, the officer issues an Order.

Steps ▼   

1.     An officer receives information that suggests tenants may have been, or         are about to be charged, an unauthorized or incorrect rent.

2.     The officer compares the information received with rent information         currently on file.

        If the rent charged is the allowable rent, the officer notes that the rent is         correct and closes the file.

3.     If there appears to be a problem, the officer contacts the landlord to         confirm the information currently on file. The officer may contact the         landlord by phone, mail or e-mail. The officer asks the landlord for         information on the amount of rent charged in past years, and the dates         of rent increases. The officer may also explain what the landlord must do         to correct any possible unauthorized rents.

4.     If the landlord doesn’t correct the rent or send in the required         information, the officer calculates the correct rent and overpayment         refund, using available information.

        The officer sends the landlord a letter, along with these detailed         calculations. The landlord has two weeks to:

• agree with or accept the officer’s calculations; or
• send in new information that changes the calculations.

5.     If the landlord agrees with the officer’s calculations, the landlord must         tell the officer, in writing, that tenants have received refunds for any         overpaid rent. If the landlord can’t find a tenant, they must send the         money to the Branch to be held for the tenant. The Branch holds the         money for two years. If the tenant doesn’t claim the money, the Branch         deposits it in the Security Deposit Compensation Fund.

6.     If the landlord doesn’t agree with the officer’s calculations or send in         new information within two weeks, the officer sends a second letter. This         letter states that if the landlord doesn’t reply or agree to correct the rent         within 5 days, the officer will contact the current tenant to verify the rent         information on file.

7.     If the landlord does not agree or send in new information, the officer         asks the tenant for more information. For example:

• rent receipts;
• cancelled cheques;
• a copy of a tenancy agreement;
• a tenant’s written and signed declaration or statement of the rent paid;
• notices of any rent increases;
• notices to new tenants.

        The officer may also get in touch with former tenants to find out what they         paid and what services were included in the rent.

8.     Once the officer has the necessary information, the officer issues the         Order. The Order will:

• set the rent to the correct amount;
• identify the amount, if any, the landlord is to refund to tenants;
• authorize current tenants to deduct the overpayment from their rent;
• tell the landlord to pay previous tenants. If the landlord can’t find a previous tenant, the landlord must send the money to the Branch.

9.     If the landlord appeals the Order, the officer attends the appeal hearing         to provide information on the Branch’s file and ask the Commission to         confirm the Branch’s Order.

10.   If the landlord doesn’t pay previous tenants, and the tenants ask the         Branch to enforce the Order, the officer may issue an Order to         Redirect Rent from current tenants.

Forms & Form Letters

X-Referencing

None

Policy Developed

September, 1992

Last Revision

August, 2015

Other Resources

None

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