A tenancy agreement is a legal contract between you and the landlord that outlines the terms and conditions for the rental property. Most of the time when we talk about a tenancy agreement, we are referring to a written document, but a tenancy agreement can also be verbal. Although verbal tenancy agreements are covered by the Residential Tenancy Act, we do not recommend them. It is always best to sign a written agreement with your landlord in order to avoid future problems.
It is important that you understand when you have legally entered into a tenancy agreement. It may be sooner than you think. During your housing search, it may be tempting to tell a landlord that you will take a place – even though you are not 100% confident. You may think that it is smart to have a back-up place secured while you try to find a better one, but this can be a risky strategy. If you change your mind and tell the landlord that you no longer want the place, it may be too late. Legally speaking, your verbal commitment to the landlord may be considered a contract. If the landlord has evidence – for example, a witness – that you verbally agreed to rent the place, they may try to go after you for money for backing out of your commitment.
Verbal terms in tenancies apply to both tenants and landlords. If your landlord offers you something that is not included in your written tenancy agreement, it may become an official term of your tenancy, especially if you have been provided with it for an extended period of time. For example, if you are given a storage locker or parking spot at the start of your tenancy, your landlord may not be able to take that right away from you (without reducing your rent), even if those terms are not clearly written in to your tenancy agreement.
The Residential Tenancy Branch is the government department in charge of residential tenancy law in BC. The Residential Tenancy Branch does have a standard tenancy agreement form, although landlords can choose to use their own form. If a landlord decides to use their own form, it should still include all of the standard terms required by law. If you don’t think the landlord’s form meets the legal criteria, you could suggest using the standard form instead.
Whether the landlord uses their own form or the government form, the most important thing to understand is that a tenancy agreement is a legally-binding contract. Be sure to read the entire agreement before signing it. Once the agreement is signed, neither the tenant nor the landlord can make changes unless both agree in writing. If your landlord attempts to change the agreement after it has been signed, you can inform them that that is not allowed. See TRAC’s template letter, Change to Tenancy Agreement.
Your landlord is required to give you a copy within 21 days after signing. Make sure to keep it in a safe place. If you do not receive a copy within 21 days, you can use our template letter – Request for a Copy of Tenancy Agreement.
Although verbal agreements are covered under the Residential Tenancy Act, your landlord should still provide you with a written tenancy agreement. Every tenancy agreement is supposed to include:
- The standard terms (listed on the standard Residential Tenancy Branch tenancy agreement)
- The names of the tenant and landlord
- The address of the rental unit
- The date the agreement is entered into
- The address and telephone number of the landlord or landlord’s agent
- The date the tenancy will start
- The tenancy period – whether it is on a weekly, monthly, or other basis
- If a fixed term tenancy, the date the tenancy ends and whether the tenancy may continue as a month-to-month tenancy, or whether the tenant must move out
- The amount of rent
- How much rent varies depending on the number of occupants
- When rent is due
- What services and facilities are included in rent
- The amount of security deposit or pet deposit required, and the date it was or must be paid
The Residential Tenancy Act (RTA) says that landlords and tenants cannot agree to avoid or contract out of the RTA. In other words, if you agree to an illegal term as part of your tenancy agreement, you don’t have to follow it. For example, a landlord cannot include a term that allows them to inspect your place at any time without giving proper notice. This is because the law clearly states that landlords must give proper notice in writing before entering a rental unit. If your landlord tries to have you agree to an illegal term, you should notify them in writing that they are acting illegally. See TRAC’s template letter, Response to Illegal Term in Tenancy Agreement.
Landlords also can’t include terms in a tenancy agreement that are “unconscionable.” According to the Residential Tenancy Branch’s Policy Guideline #8 – Unconscionable and Material Terms, a term is unconscionable if it is “oppressive or grossly unfair to one party.” An example of an unconscionable term would be a landlord making a tenant pay for electricity, gas, or other utilities for units they do not occupy.
- Is the tenancy month-to-month or fixed-term?
In BC there are two types of tenancies – month-to-month tenancies (periodic) and fixed-term tenancies (often called “leases”). A month-to-month tenancy does not have a specific end date. The tenancy continues until the tenant gives notice to move out, or until the landlord has a valid reason to end the tenancy.
A fixed term tenancy – often called a “lease” – has a specific end date, most commonly after one-year. If you are entering into a fixed term tenancy, you’ll need to pay close attention to what the tenancy agreement says will happen at the end of the term. There are two possibilities:
- The tenancy may continue on a month-to-month basis, or
- the tenant must move out, or sign a brand new tenancy agreement in order to stay
Many tenancies begin as one year fixed-term agreements, but then become month-to-month after the first year. It is important to know ahead of time if you have the option to continue your tenancy, or if you need to move out and find somewhere new to live.
If possible, we recommend signing an agreement that will convert to month-to-month after the fixed-term. If you have an agreement that requires you to move out, the landlord might make you to sign a new agreement with different terms in order to stay.
- How much is the rent, when is it due, and how should it be paid?
Paying rent in full and on time is a tenant’s most important responsibility. Being even one day late paying rent can lead to an eviction notice. Ask your landlord how they would like to receive rent, and make sure you pay it by the due date – usually the 1st of each month.
You’ll also want to check if the rent will increase if another person moves in with you. Landlords are allowed to increase the rent if an additional person moves in, but only if the tenancy agreement states how much it will increase by.
- What is included in the rent?
Remember, there may be extra costs in addition to your basic rent. Does your tenancy agreement include the appliances and amenities that are important to you? Laundry? Parking? Storage? Utilities?
- Have you asked your landlord about unique requirements?
Are there special rules or policies about pets, smoking, roommates or accessibility? These are not mandatory terms that all tenants and landlords need to discuss, but for some tenants these will be very important factors to consider.
- Does your tenancy agreement include any fees?
Look for any fees that your landlord has included in your tenancy agreement. For example, if you have a “liquidated damages” clause and you end your tenancy early, you may have to pay the costs associated with re-renting your unit. Or, if you will be living in a strata property, you may have to pay move-in and move-out fees. Remember what we said about paying rent being a tenant’s number one responsibility? Well the law allows a landlord to charge a $25 fee for late payment of rent if the tenancy agreement includes a term about that.
A month-to-month tenancy does not have a specific end date. The tenancy continues until the tenant gives notice to move out, or until the landlord has a valid reason to end the tenancy.
Ending the Tenancy
You are required to give one full month written notice. For example, if you want to move out on July 31st, you must give written notice by no later than June 30th. See our page on Moving Out for more information. Remember that service provisions also apply when giving your landlord written notice. Your landlord may end a month-to-month tenancy for various reasons, but also must give you proper notice in writing. See our page on Evictions for more information.
Raising the Rent
Your landlord may raise the rent by the allowable annual amount (set out in the Residential Tenancy Regulation) once every 12 months. The rate is established each year based on the formula = inflation + 2%. See our Rent Increases page for more information.
Sometimes tenants are allowed to temporarily transfer their tenancy agreement to a new tenant. For example, if a tenant would like to travel for a few months but not end their tenancy, they can their landlord for permission to allow a new tenant (e.g. friend or family member) to live in their unit and pay rent until their return. See our page on Sublet and Assignment for more information.
For month-to-month tenancies, tenants must get their landlord’s written permission before subletting, and a landlord is not required to allow a sublet.
A fixed-term tenancy, often referred to as a “lease”, has a specified start and end date. The tenancy agreement should state what will happen at the end of the term. The possible outcomes are:
- The tenant may remain in the rental unit and the tenancy continues as a month-to-month tenancy
- The tenant is required to move out
- The tenancy agreement says that the tenant must move out at the end of the term, but the landlord allows the tenant to stay if they sign a brand new tenancy agreement
If a fixed-term tenancy agreement does not specify what will happen at the end of the term, it automatically continues on a month-to-month basis.
Ending the Tenancy
Unless your landlord has breached (did not follow) a material term of the tenancy agreement, you are not allowed to end the tenancy before the end of the fixed-term. A material term is a term so important that a breach of that term would mean the tenancy could not reasonably continue.
It is important to understand what your agreement says about what happens at the end of the fixed-term. If your agreement does not require you to move out at the end of the fixed-term, you must give one full month’s notice if you intend to move out at the end of the term. If your agreement does require you to move out at the end of the term, then you have already established the move out date and do not need to give your landlord written notice.
You and your landlord may end the tenancy early if you both agree in writing. You should use the Residential Tenancy Branch’s Mutual Agreement to End Tenancy form.
If you do not fulfill your legal responsibilities as a tenant, your landlord can issue you a 10 Day Eviction Notice for Non-Payment of Rent or a One Month Eviction Notice for Cause. They are not, however, allowed to issue you a Two Month Eviction Notice for Landlord Use of Property.
By signing a fixed-term tenancy agreement, you are entering into a legal contract to pay rent until the end of the term. If you are unable to pay rent, or decide to move out early, you may face significant financial consequences. For example, if your landlord is unable to rent your unit to someone else, or if they are only able to rent it at a lower rate, you could be responsible for the losses they incur.
If you need to end your fixed-term tenancy early, see our page on Breaking a Lease for more information.
Some fixed-term tenancies have a liquidated damages term. This is a term that says that the tenant must pay a certain amount of money if they end their fixed-term tenancy early. The amount is meant to be an estimate of the costs the landlord will incur by having to re-rent the unit (advertising costs, showing the unit to prospective tenants, etc.), and is usually not allowed to be an automatic forfeiture of the security deposit.
Raising the Rent
Some fixed-term tenancy agreements require the tenant to move out at the end of the term. If this is the case, the landlord will usually require the tenant to sign a new tenancy agreement if they wish to continue living there. Because this may be considered a brand new tenancy, the landlord may be allowed to set the rent at any new amount. TRAC does not support this practice, as it can be used as a strategy to avoid the rent control provisions set out in the Residential Tenancy Act. If your landlord tries to do this, we would love to hear from you – give us a call!
Some fixed-term tenancy agreements state that the tenancy will continue on a month-to-month basis at the end of the term. If this is the case, your landlord is only allowed to raise rent by the allowable annual rate, which is established each year based on the formula = inflation + 2%. See our page on Rent Increases for more information.
Sublet and Assignment
Sometimes tenants are allowed to either temporarily or permanently transfer their tenancy agreement to a new tenant. See our page on Sublet and Assignment for more information.
Landlords may not unreasonably deny a tenant the right to sublet or assign a rental unit if is the tenancy agreement is for a fixed-term of at least 6 months. However, you are still required to get your landlord’s written permission before subletting or assigning. Your landlord is allowed to issue a One Month Eviction Notice for Cause if you sublet or assign your unit without their permission.
Acceleration Terms Not Allowed
An acceleration term is a term in a fixed-term tenancy agreement that requires the tenant to pay all remaining months’ rent if they end their fixed-term tenancy early or breach a term of the agreement. This is illegal. According to Section 5 of the Residential Tenancy Act (RTA), a landlord is not allowed to avoid or contract out of the RTA.
- RTA Section 5 – This Act Cannot be Avoided
- RTA Section 6- Enforcing Rights and Obligations of Landlords and Tenants
- RTA Part 2 Division 1 – Creating a Tenancy Agreement
- RTA Part 2 Division 2 – Other Specific Terms in a Tenancy Agreement
- RTR Part 2- Requirements for Tenancy Agreements
- RTR Schedule- Standard Terms
- RTA Section 44 – How a tenancy ends
- RTA Part 3 – Rent increases
- RTA Section 22 – Acceleration terms prohibited
- Policy Guideline #4 – Liquidated Damages
- Policy Guideline #8 – Unconscionable and Material Terms
- Policy Guideline #19 – Assignment and Sublet
- Policy Guideline #20 – Illegal Contracts
- Policy Guideline #30 – Fixed-Term Tenancies
- Policy Guideline #37 – Rent Increases
- Residential Tenancy Agreement
- Tenant Survival Guide Chapter 2 – Making Your Agreement