Renovictions

As a Realtor sometimes I get to participate in some very complex problems and issues arising from tenancies. I have some experience from being a landlord myself and have helped my clients in guiding them to get proper resources in dealing with tenancies. I am not a licenced property manager so I’m not an expert in this field that’s why I strongly recommend and warn you to do your own research before you commit to being a landlord. Whether you are a tenant or landlord it’s very important to know the rules of the game. My assumption is that majority of landlords are honest, decent and responsible people. I also assume the same great qualities apply to the tenants. Of course there are small groups of people that play outside of the norm and don’t play by the rules and that’s why it’s important to familiarize yourself with the rules of the game if you intend to participate.
 

I understand that the tenancy act appears at first to be very complex but when you look deeper it’s actually very easy to understand and there are simple rules to follow based on the principle of “just do the right thing”


Here’s a brief summary of new rules that came into effect on July 1, 2021.


How can a landlord increase rent? Currently due to factors such as current health crisis the government has put a freeze on rent increases until December 31, 2021. So legally you can’t increase rent this year. The maximum allowable rent increase for next year will be publicly announced at the end of the summer.


What if you evicted your tenant so you can do some renovations and then rent it out to a new tenant at a higher market rent? This is referred commonly as a “Renoviction”. This is a very hot topic and I feel that it needs to be analyzed in depth to make sure you understand it clearly.


As of July 1, 2021 under new legislation if a landlord wants to end a tenancy for extensive renovations the landlord will have to apply for “order of possession” from the Residential Tenancy Branch. There will be a process of dispute resolution where an arbitrator will decide if ending the tenancy is the only way to complete this work.

The most important factor is to prove that the renovation you’re trying to do will require the tenant to move out. Simple replacing of kitchen cabinets, installation of flooring, or painting is considered cosmetic repairs and do not constitute as “extensive” repairs.

“Section 49.2 of the Residential Tenancy Act establishes four basic requirements to end a tenancy for renovations or repairs:

  1. the landlord has all the necessary permits and approvals required by law and intends in good faith to renovate or repair the rental unit(s) 
  2. the renovations or repairs require the unit(s) to be vacant
  3. the renovations or repairs are necessary to prolong or sustain the use of the rental unit(s) or the building where the rental unit(s) are located
  4. the only reasonable way to achieve the necessary vacancy is to end the tenancy agreement

If the above requirements are met, a landlord can apply to the RTB (Residential Tenancy Branch) for an order of possession to end a tenancy. There will be a hearing where the landlord and tenant can provide their evidence and the arbitrator will make a decision. 

After July 1, 2021 the only reason a landlord can serve a Four Month Notice to End Tenancy is:

  1. convert the residential property to strata lots under the Strata Property Act;
  2. demolish the rental unit;
  3. convert the residential property into a not for profit housing cooperative under the Cooperative Association Act;
  4. convert the rental unit for use by a caretaker, manager or superintendent of the residential property; or
  5. convert the rental unit to a non-residential use.”

The violation of laws by the tenant under normal circumstances could result in termination of lease and/or losing your damage deposit. In my next article I would like to address this in more detail.
The landlord has more to lose however because if the landlord is found in violation of rules can face a penalty of up to 12 months of rent to be payable to the tenant. That can be a big hit to some people, and sometimes it’s the only way of getting rid of an undesirable tenant.

There is no way around rules and some of the most common scenarios won’t be acceptable, like:

  1. A landlord ends a tenancy to occupy the rental unit and then changes their mind.
  2. A landlord ends a tenancy to renovate the rental unit but did not adequately budget for the renovations and cannot complete them because they run out of funds.

If you need further information I highly recommend going to the government website (link provided below). It contains all the information that you need. https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies

We are in a housing crisis and avoiding the subject won’t solve the problem. Shelter is the basic human need as shown in the Maslow’s Hierarchy of needs, and I feel it’s very important to treat it as such.
I strongly believe that education and free information is a step in the right direction. The Residential Tenancy Branch offers a lot of help to both tenants and landlords before problems arise, I highly suggest you contact them directly. They are very helpful and professional.

Being a landlord is hard because you bought an investment that cost you a lot of money and in some circumstances the financing for your home was subject to you having a rented unit to supplement your mortgage payments. You are financially, emotionally and physically attached to your property. This may be just an investment but you want to rent it out to someone that will take care of it as much as you would. This is a trap that will get every landlord in trouble. Tenants don’t have these bonds as you do and having the expectation of tenants to care as much about your property as you do, is simply just not realistic. Spare yourself some nerves, tears and disappointments. Just don’t expect your tenant to be like you. Most tenants are very decent people and they will treat your property as what it is, YOUR property.
Not every tenant is a low-life with a low paying job, or a young person that is starting out in life. Today a lot more people are choosing to be tenants. Being a home owner when you look just at the numbers have been wonderful and a guaranteed “win” especially if you base your opinion on the last 40 years or longer. The question remains if this trend will continue and what is the true cost of owning a home today. Don’t get me wrong, I strongly believe that owning is better than renting BUT not always, and not in every market. I believe in analyzing your budget, having long term goals and planning your future carefully. The constant balance between supply and demand of housing is what dictates the prices and also vacancy rates of rental units. We have been very fortunate that the constant influx of new immigrants and high demand for housing has been very favorable to home owners. As long as this continues things will be just peachy.


If you have any questions or suggestions, please don’t hesitate to contact me directly at home at

250-285-2141 I’m here to serve you better.

Roman Krzaczek REALTOR ®
Quadrarealty.ca

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June in Real Estate:

Craziest thing happened: a client of mine wanted to invest in Bitcoin. The bank loaned him $320,000 of his $400,000 purchase; he just had to come up with the $80,000, and then he owned $400,000 worth of Bitcoin! Can you believe they loaned him the money at 2.75% interest?! Crazy! His monthly payment on that loan with fees was about $1600, but then he rented the Bitcoin out to people for $2,400/mo, and made $800 each month and still got to keep his Bitcoin!! Even though he didn't own it free and clear, he was still able to charge other people to use his Bitcoin every month! 


At tax time, he was able to write off any interest he paid on his taxes, and depreciate his asset on his taxes to wipe out any gains, and he even got a 100% guarantee that there will be a demand for his asset as long as he owns it!!


Can you believe that; an asset that goes up in value AND that allows you to cashflow while you hold it??


Oh wait, I misunderstood his story. That wasn't Bitcoin, it was Real Estate... 

You can’t do this with any other asset class. Real Estate rules!


CAMPBELL RIVER

The Vancouver Island Real Estate Board’s latest report indicates that “inventory is rising slightly, which opens up a few more opportunities for buyers, but it is still historically tight on Vancouver Island. Although active listings of single-family homes dropped by two per cent from May, condo apartment and row/townhouse inventory rose by 16 and 23 per cent, respectively. The British Columbia Real Estate Association (BCREA) forecasts that market conditions may begin to even out somewhat by the end of the year. However, it would take approximately 2,500 new listings in the VIREB area to create an actual balanced market if activity continues at this pace. More inventory is certainly good news for buyers, even if the increases are slight,” says 2021 VIREB president Ian Mackay. “We’re also relieved to see a few more conditional offers again, which means the frenzied fear-of-missing-out mentality is tempering a bit.”

In Campbell River, the benchmark price of a single-family home hit $627,600 in June, up by 29 per cent from the previous year.

This morning- July 05, as I write this article, I checked the MLS to see what’s happening locally (as I do every single day). I’m noticing lately more and more price reductions on listings in our area. This could be an indication of the market finding its new normal. The price decreases are minor however and are usually used to refresh the listings and get more buyers’ attention.


METRO VANCOUVER

According to the Real Estate Board of Greater Vancouver monthly report for June,
Metro Vancouver’s housing market sets a steady, calmer pace to begin the summer season.
“Metro Vancouver’s housing market continues to experience strong seller’s market conditions, although the intensity of demand has eased from what we saw throughout most of the spring,” Keith Stewart, REBGV economist said. “The past two months have shown a market that’s shifting toward more historically typical conditions.” This is making multiple offers less common, allowing subjects to be seen on offers more frequently again, and is making new price records less likely.”

Sales of detached homes in June 2021 reached 1,262, a 45.7 per cent increase from the 866 detached sales recorded in June 2020. The benchmark price for detached properties is $1,801,100. This represents a 22 per cent increase from June 2020 and is virtually unchanged from May 2021.


CALGARY

Calgary’s housing market is showing few signs of letting up, as sales reached 2,915 units in June – a record high for the month. “It is taking time for supply to catch up with the demand in the market,” said CREB® chief economist Ann-Marie Lurie.

“Through the early spring market, many buyers did not have a lot of choice, but the recent improvements in supply are providing more options for those purchasers and supporting the strong sales we continue to see in June. At the same time, gains in inventory are taking some pressure off the market as it starts to trend towards more balanced conditions.”

The unadjusted detached benchmark price totalled $537,200 in June, nearly one per cent higher than last month and 13 per cent higher than last year’s levels.


TORONTO

The Toronto Regional Real Estate Board hasn’t posted their monthly report yet for some reason so I can’t provide you with accurate information but from what I’m reading and talking to agents in the region the same trend is happening there as well. In fact, the market slowdown has started in Toronto 3 months ago and it’s been gradually showing the same across the country.



Why is the market cooling? In my opinion, it is most likely the fact that the economy and travelling is opening up again and a lot of people don’t want to spend time and money on moving. A lot of people will choose to enjoy a trip to places like Quadra Island and Cortes Island to enjoy the tranquil nature and… no traffic (except the ferry traffic). I feel blessed and fortunate to live here during these difficult times. It has given me a renewed perspective on life and the appreciation for the little things in life. I appreciate all the tourists that are coming to visit our “rock” and support our small businesses. It is truly helping our community and I’m sure I’m not the only one thinking that. If you are a visitor here to our beautiful Quadra Island- Thank you! We appreciate YOU.

If you are interested in information about real estate in the area, contact me directly at home @ 250-285-2141. I network with lot of agents across the country and in the USA. I can help you to connect with great agents in your area and make your move easier. Visit my website for lots of interesting resources: https://quadrarealty.ca/


Enjoy the sun everyone!


Roman Krzaczek REALTOR ®

Home number: 250-285-2141


for more articles visit 

the "Discovery Islander" local paper where I write an article every two weeks. 
http://www.discoveryislands.ca/news/

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