How BC’s New Four-Month Eviction Notice Rule May Affect First-Time Buyers
The changes to the Residential Tenancy Act were announced by the Province on July 3 and came into effect on July 18.
Source: Howard Chai July 29, 2024 Storeys Real Estate News See full article here
Overview of Changes:
- The BC government announced changes to the Residential Tenancy Act, effective July 18, 2024.
- Landlords now need to provide a four-month notice for evictions related to personal or caretaker use, up from two months.
- Eviction notices must be generated through a new Landlord Use Web Portal.
- Tenants have 30 days to dispute eviction notices, up from 15 days.
Concerns Raised:
- BC Real Estate Association (BCREA) Concerns:
- The changes could disadvantage first-time homebuyers who want to move into their new homes.
- There’s no distinction between genuine buyers and those using evictions to raise rents unfairly.
- First-time buyers often require mortgage default insurance, which is difficult to obtain with longer eviction notice periods.
- Lenders typically require vacant possession for mortgage insurance, making the extended notice problematic.
- The changes could push landlords, especially older ones, to sell their properties due to the complexity of the new portal.
- Privacy concerns arise as buyers’ personal information may be shared with tenants.
- Canadian Mortgage Brokers Association of BC (CMBA-BC) Concerns:
- A four-month notice complicates mortgage approvals, potentially leading to funding denials or increased costs.
- First-time buyers are particularly affected, as they often purchase previous rental properties.
Industry Recommendations:
- Adjust rules to allow vacant possession within three months for conventional mortgage buyers.
- Keep the two-month notice period for high-ratio insured buyers who will occupy the property.
- Add privacy protections to safeguard buyers’ personal information.
- Provide a paper-based alternative to the Landlord Use Web Portal.
- Remove the reporting requirement for buyers intending to occupy their own units.
Impact on the Market:
- The changes might discourage landlords from staying in the rental business.
- Some property owners may choose to sell, potentially reducing the availability of affordable rental units.
- There’s concern that the amendments could worsen the housing shortage in BC by discouraging investment and hindering first-time homebuyers.
Overall, the BCREA and CMBA-BC warn that these changes could have unintended consequences for both landlords and first-time homebuyers, potentially exacerbating the housing shortage in British Columbia.
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