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BCFSA’s information provides clear, concise, easy-to-read explanations of the requirements for real estate professionals under the Real Estate Services Act (“RESA”), Real Estate Services Regulation (“Regulation”), Real Estate Services Rules (“Rules”), and other applicable legislation.
This information is intended for use by real estate professionals, to support their understanding of the standards they must meet in the delivery of real estate services.
While this regulatory information outline obligations when it comes to residential tenancies, the Real Estate Services Rules also provide exemptions from the legislative requirements for real estate professionals when they rent out a property that they or a specific family member(s) owns.
Real estate professionals representing manufactured home park owners in the leasing of pads for manufactured homes should note that the Manufactured Home Part Tenancy Act has different requirements from the Residential Tenancy Act discussed below.Learn more about the Residential Tenancy Act
Trading services real estate professionals can provide trading services in relation to rental properties but cannot provide rental property management. Trading services can include assisting a tenant to find a rental unit or assisting a landlord to find a tenant for a rental unit. These services do NOT include ongoing rental property management services such as holding deposits, receiving rents, arranging repairs, or conducting move-in/move-out inspections.
(a) Entering a Tenanted Property
Before showing a tenanted property, you need to know when you are able to enter the property and what notice the landlord is required to give the tenant. In many instances, you may be asked to give notice to the tenant to enter the property for the purposes of a showing. As a seller’s agent, you fall within the definition of landlord and must adhere to the provisions of the Residential Tenancy Act (“RTA”).
Note: The Residential Tenancy Act allows the landlord to enter a rental unit for a number of reasons with the tenant’s permission or upon written notice of at least than 24 hours and no more than 30 days. If a tenant is unwilling to allow you to conduct a showing, you will need to inform your client (the landlord) so the landlord can obtain legal advice about their rights under the RTA.
The RTA gives the landlord the right to enter a property with written notice between the hours of 8 a.m. and 9 p.m. As a result, either the landlord or the listing agent may give notice to enter the property. If you are representing a buyer, you do not have the authority to enter the rental unit without the landlord or the landlord’s agent present.
The tenant is permitted to have exclusive possession of the rental unit subject to the landlord’s right to enter. The tenant cannot be forced to leave the property during the showing by either the landlord or you as the agent for the landlord.
(b) Selling a Tenanted Property
You need to ensure that the contract of purchase and sale reflects any tenancy, and the disposition of the tenancy. You must ensure that the contract of purchase and sale clearly indicates whether the tenant will remain on the property or whether the buyer is to receive vacant possession. If the buyer is requesting vacant possession, you need to make yourself familiar with the terms of the current rental agreement to ensure that the seller is able to terminate the tenancy. You should also familiarize yourself with the requirements to notify a tenant that a tenancy will be terminated.
You are reminded that if the property you are selling contains accommodations that are not permitted by the local government, this is considered to be a material latent defect and must be disclosed to potential buyers. Please read the Material Latent Defects Guideline for more information.Learn more about the RTA definition of written notice
Rental property management services real estate professionals can provide trading services in relation to the rental of the real estate on behalf the owner of the rental property. This can include assisting a landlord to find a tenant for a rental unit but does NOT include assisting a tenant to find a rental unit. Rental property managers can also provide ongoing rental property management services on behalf of the owner of the rental property, such as making payments to third parties, negotiating and entering into contracts holding deposits, receiving rents, arranging repairs, managing landlord/tenant matters, or conducting move-in/move-out inspections.
Understanding your obligations under RESA and RTA is critical in providing rental management services to your client. RESA states that you must act in the best interest of your client at all times while also acting with reasonable care and skill. Here are some common issues related to tenancies and your obligations as a rental property manager.
(a) Written Service Agreements
A brokerage must have a written service agreement with the property owner/landlord prior to providing rental management services on their behalf unless the client has waived the requirement for the agreement. Every service agreement must contain specific content as outlined in the Real Estate Services Rules including but not limited to:
- The client’s name and real estate professional representing them at the brokerage;
- The effective date of the contract;
- The providing respecting the use and disclosure of personal information;
- A general description of the services being provided; and
- The remuneration being paid under the agreement.
If your client will not enter into a service agreement, you must decide if you want to continue providing them services given the potential risk. If you choose to provide service, a prudent real estate professional will get the waiver in writing.
Learn more about service agreements, please click here. For information on document retention requirements pertaining to service agreements and invoices need to be retained by the brokerage please click here.
(b) Tenancy Agreements
The RTA requires that a tenancy agreement be in writing and contains the standard terms prescribed in the Residential Tenancy Act Regulation. A tenancy agreement may not be amended to change or remove a standard term. A tenancy agreement may have terms other than standard terms if both the landlord and tenant agree to those terms. A failure to comply with the requirements could result in a termination of the lease and could also be a violation of the duties owed under the Real Estate Services Rules to act in the best interest of your client.
Copies of all tenancy agreements, along with any invoices or expenditures incurred on behalf of your client, must be provided to your brokerage.
The Real Estate Services Rules require that every service agreement entered into by a brokerage contain provisions for how security and pet damage deposits are dealt with. Records of each tenant’s deposit(s) must be retained in the brokerage file.
The RTA requires that a security deposit cannot exceed one half of one month’s rent under the tenancy agreement. A landlord can also provide for a pet damage deposit that does not exceed half of one month’s rent. An overpayment of a pet damage or security deposit can be deducted by a tenant from their rent to compensate for the overpayment.Learn more about Deposits
(d) Condition Inspection Reports
RESA defines rental property management services to include any of the following services provided to or on behalf of an owner of real estate:
- (a) Trading serves in relation to the rental of the real estate;
- (b) Collecting rents or security deposits for the use of the real estate;
- (c) Managing the real estate on behalf of the owner by:
- (i.) Making payments to third parties;
- (ii.) Negotiating or entering into contracts;
- (iii.) Supervising employees or contractors hired or engaged by the owner; or
- (iv.) Managing landlord and tenant matters.
Condition inspections, also known as move-in and move-out inspections are included in the management of landlord tenant matters. You must be a licensed rental property manager to conduct condition inspections and prepare the associated reports.
As a rental property manager, you have an obligation to act in the best interest of your client. As such, you must ensure that condition inspection reports are completed in accordance with the RTA. Failure to complete a move-in inspection per the RTA could result in a loss of security deposit owed to your client (landlord) should damages occur over the course of the tenancy.
(e) Notice to End Tenancies
The RTA permits landlords to end tenancies for a number of reasons. Landlords and their agents must ensure they give proper notice to tenants if they plan to end a tenancy – there are different notice forms required for different situations:
- Unpaid rent or unpaid utilities if the tenant is required to pay utilities to the landlord;
- For cause;
- End of employment with the landlord;
- Landlord’s use of property;
- Tenant ceases to qualify for subsidized rental unit; and
- Demolition, renovation, or conversion of the rental unit to another use.
(f) Entering a Tenanted Property
In many instances you may be asked to give notice to the tenant to enter the property for the purposes of a showing, for an inspection of the unit, or for a repair. The RTA gives the landlord or agent the right to enter a property, with written notice, between the hours of 8:00 a.m. and 9:00 p.m. You must always remember that while you must follow the lawful instruction of your client, you must also adhere to the RTA provisions.
(g) Collecting Rent
A tenant is required to pay rent and all funds collected on behalf of a client must be paid promptly to the brokerage.
If you encounter a tenant who has defaulted in payment of rent, you must provide the relevant information to your client and seek their lawful instruction on how to proceed. Depending on the situation, you may also wish to advise your client to seek legal advice. Remember that rent and deposits are held on behalf of an owner by your brokerage and are not held as stakeholder funds.
(h) Repairs and Maintenance
As a rental property manager, you must meet the terms of the service agreement entered into with your client. This may include regular maintenance of the property, as well as emergency repairs. It is important to have written limits of any repair work to reduce the risk of disputes over costs or limits to the project being undertaken because there is a duty owed to only act within the scope of the authority given by the client.
For emergency repairs, the RTA requires a landlord, and by extension an agent for the landlord, to provide to a tenant (or to post in a conspicuous place) the name and telephone number of the person the tenant must contact for emergency repairs.
While strata managers deal the strata councils and owners of units in a strata development, there may be tenants who have rented units either directly from the property owner, or from a rental property management brokerage representing the owner.
(a) Rental Restrictions
Strata properties can have restrictions on rentals that inhibit an owner’s ability to rent out their unit.
It is important to understand how rental restrictions are implemented and how to know if a violation of that rental restriction has occurred. The Strata Property Act (“SPA”) provides for the timing of the effectiveness of rental restriction bylaws.
Pop-up or Sidebar: The Strata Property Act provides that a new bylaw that prohibits or limits rentals does not apply to a strata lot until the later of one year after an existing tenant has vacated the strata lot or one year after the bylaw is passed.
Whether the strata restrictions are based on a number or percentage of units rented, rental restrictions will not apply if the tenant is a family member as defined by the SPA.
(b) Form K
The SPA requires all landlords to provide their tenants with a Notice of Tenant’s Responsibilities, often referred to as a Form K, along with a copy of the current bylaws and Real Estate Services Rules. This form must be signed by the landlord and tenant and provided to the strata corporation within two weeks of the renting of all or part of the strata lot. The form should be retained in the brokerage file.
The Form K cannot be amended to include additional information. BCFSA has been made aware that some strata corporations/managers use their own Form K, implying that emergency contact info, cell phone numbers, licence plate and car insurance info are required by the SPA, these items are not required.
Commercial tenancy transactions are often more complicated than residential tenancy transactions.
The Commercial Tenancy Act governs commercial tenancies. It is not as prescriptive as the RTA. Most of the rights and obligations between a landlord and tenant are governed by the terms of their agreed-upon leases.
It is important that all commercial rental property managers refer to the Commercial Tenancy Act to ensure they and their clients are in full compliance with the Act in addition to the obligations noted above for RESA.