1993 Legislative Session: 2nd Session, 35th Parliament
FIRST READING
The following electronic version is for informational purposes only.
The printed version remains the official version.
HONOURABLE COLIN GABELMANN
ATTORNEY GENERAL
Contents
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HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:
1 (1) In this Act
"court" means the Supreme Court;
"intermediate landlord" means the landlord under a subtenancy agreement;
"premises" means land that is the subject matter of a tenancy agreement;
"subtenancy agreement" means a tenancy agreement between a tenant and a landlord whose interest in the premises arises under a superior tenancy agreement;
"subtenant" means the tenant under a subtenancy agreement;
"superior landlord" means a landlord under a superior tenancy agreement;
"superior tenancy agreement" means a tenancy agreement in which the tenant is also an intermediate landlord under a subtenancy agreement respecting the same premises;
"tenancy agreement" means an agreement that creates the relationship of landlord and tenant between parties to it.
(2) Section 5 of the Offence Act does not apply to this Act.
2 (1) This Act applies to a tenancy agreement respecting premises that are in British Columbia.
(2) Despite subsection (1), this Act does not apply to a tenancy agreement to which the Residential Tenancy Act applies, except to the extent that the Residential Tenancy Act applies this Act.
(3) Except for sections 3 (3) (b) and (5), 5 (3), 9 (3) and 11 (6), this Act applies despite a waiver or agreement to the contrary.
3 (1) Subject to section 54 of the Law and Equity Act, no particular form is required for the valid creation of a tenancy agreement.
(2) A landlord who enters into a tenancy agreement must deliver a document creating it to the tenant in a form registrable under the Land Title Act.
(3) Subsection (2) does not apply where
(a) the tenancy agreement is for a term not exceeding 3 years and there is actual occupation under it, or
(b) the parties otherwise agree.
(4) The doctrine of interesse termini is abolished.
(5) Without limiting subsection (4), and unless the parties otherwise agree, rights under a tenancy agreement take effect from the commencement of its term whether or not the tenant takes possession of the premises.
4 (1) Subject to section 10, the general law of contract applies with respect to the effect which one party's breach of a tenancy agreement has on another party's right to relief and obligation to perform.
(2) Without limiting subsection (1),
(a) subject to section 6, where a landlord or tenant breaches a material provision of the tenancy agreement, the other party may elect to treat the agreement as terminated, but the agreement is not terminated until the party who has breached the material provision is advised of the election, and
(b) where a landlord or tenant becomes liable to the other for damages as a result of a breach of the tenancy agreement, the party entitled to claim damages has a duty to mitigate losses.
(3) The Frustrated Contract Act and the doctrine of frustration of contract apply to tenancy agreements.
5 (1) Every tenancy agreement is deemed to include a provision that if the rent is unpaid for 15 days or more after the date for payment under the tenancy agreement the landlord may re-enter and resume possession of the premises.
(2) Where a landlord exercises a right to re-enter and resume possession of premises under subsection (1), all rights of the tenant as a tenant with respect to the premises, other than rights under section 6, are terminated.
(3) Subsection (1) does not apply where
(a) the parties agree to exclude its application, or
(b) the tenancy agreement expressly gives the landlord a right to re-enter and resume possession after non- payment of rent.
6 A tenant has the right to seek relief under sections 21, 21.1 and 22 of the Law and Equity Act irrespective of the character of the tenant's breach and despite
(a) the landlord's exercise of a right of re-entry and repossession under section 5 (1) or of a similar right given by the tenancy agreement, or
(b) the landlord's election to treat the tenancy agreement as terminated under section 4 (2).
7 (1) In this section "assignment" includes any disposition, whether consensual or by operation of law, but does not include
(a) the creation of a subtenancy agreement, or
(b) an assignment made as security for the performance of an obligation, if the assignee has not asserted rights associated with an estate in the premises to enforce the security.
(2) Subject to section 13, a person who takes an assignment of the interest of a landlord or tenant has the rights, and is subject to the obligations, of the assignor arising under the tenancy agreement.
(3) Subsection (2), without limiting its generality, applies to a right or obligation notwithstanding that the right or obligation
(a) does not touch, concern or have reference to the premises,
(b) became enforceable before the assignment, or
(c) relates to something not in existence at the time the tenancy agreement was created.
(4) No assignor, by reason only of subsection (2), is relieved of liability for any breach of the tenancy agreement, whether occurring before or after the assignment.
(5) Where the interest of a landlord has been assigned, the tenant may continue to pay rent to the assignor until the tenant receives written notice that payment is to be made to the assignee.
8 (1) Where the interest of an intermediate landlord arising under a superior tenancy agreement is merged with the interest of a superior landlord
(a) if the superior tenancy agreement is renewed or replaced by another tenancy agreement between the superior landlord and the same intermediate landlord, the rights and obligations arising under a subtenancy agreement are the same as if the merger had not occurred, or
(b) if the superior tenancy agreement is not renewed or replaced by another tenancy agreement between the superior landlord and the same intermediate landlord, the rights and obligations of a subtenant in relation to the superior landlord are the same as if the subtenant were the tenant of the superior landlord and as if the subtenancy agreement were the tenancy agreement between them.
(2) Where a superior landlord has indicated an intent to assert a right of re-entry or forfeiture under a superior tenancy agreement, the court, on the application of a subtenant, may order that all or part of the term of the superior tenancy agreement, in respect of all or part of the premises, be vested in the subtenant.
(3) An order under subsection (2) may be made subject to any conditions that are fair and equitable in the circumstances, including conditions as to
(a) the execution of any document,
(b) the payment of compensation, or
(c) the giving of security.
9 (1) A provision of a tenancy agreement which prohibits the assignment of the tenant's interest or the creation of a subtenancy by the tenant is void and unenforceable.
(2) A provision of a tenancy agreement that the tenant must not assign the tenant's interest or create a subtenancy without the consent of the landlord is enforceable, but the tenancy agreement is deemed to contain a provision that the landlord must not unreasonably withhold that consent.
(3) The parties may agree on reasonable standards to measure whether the landlord's withholding of consent under subsection (2) was fair.
(4) A landlord is, with respect to a transaction referred to in subsection (2), entitled to claim reimbursement of the landlord's reasonable expenses arising out of
(a) a tenant's request for the landlord's consent to the transaction, and
(b) a change in possession of the premises resulting from the transaction,
but no other fee may be claimed by the landlord in connection with the consent or change in possession.
(5) Subject to subsections (6) and (7), a provision of a tenancy agreement may give the landlord
(a) a right of first refusal, or similar right, with respect to an assignment of the tenancy or the creation of a subtenancy, and
(b) a right to terminate the tenancy rather than approve
(i) an assignment of the tenancy, or
(ii) the creation of a subtenancy which embraces substantially the whole of the tenant's interest.
(6) A landlord may not exercise rights arising under a provision referred to in subsection (5) where the proposed assignment or subtenancy is consequential to, or part of, a bona fide restructuring or sale of the tenant's business and the withholding of the landlord's approval to the proposed assignment or subtenancy would be unreasonable under subsection (2).
(7) If a tenant elects to retain the premises because the assignment or subtenancy is not approved, the landlord may not exercise the right, under subsection (5) (b), to terminate the tenancy.
(8) Where a landlord
(a) authorizes or ratifies an act of a tenant that is otherwise prohibited by the tenancy agreement, or
(b) consents to a transaction under subsection (2),
the authorization, ratification or consent extends only to the specific act or transaction authorized, ratified or consented to, and not to any other act or transaction.
10 (1) A tenant must not refuse to pay rent solely because the landlord has breached a material provision of the tenancy agreement.
(2) Subsection (1) does not affect a right of a tenant, if the right otherwise exists,
(a) to deduct from rent otherwise payable an amount in respect of
(i) a judgment against the landlord for damages or for compensation for a breach of the tenancy agreement, or
(ii) an obligation that arises independently of the landlord and tenant relationship, or
(b) to cease paying rent on electing to terminate the tenancy agreement under section 4 (2).
(3) Where a landlord breaches a material provision of the tenancy agreement and the tenant does not elect to terminate the agreement under section 4 (2), the tenant may apply to the court for an order that the rent payable under the tenancy agreement
(a) be reduced
(i) by an amount equal to the reduction in value of the premises to the tenant because of the breach, or
(ii) by an amount sufficient to compensate the tenant for expenses incurred in repairing the breach, or
(b) be diverted in whole or part to any person by or through whom the breach can be remedied.
(4) An order under subsection (3) may be made subject to any conditions that are fair and equitable in the circumstances.
11 (1) Where a tenant ceases to occupy premises during the term of the tenancy agreement and the landlord is entitled to exercise a right to re-enter and repossess the premises, then, except as permitted by this section, no cause of action lies and no proceeding shall be instituted for
(a) the value of rent not in arrears at the time occupation ceased,
(b) rent payable through the operation of an acceleration provision, or
(c) damages or other compensation determined with reference to rent not in arrears at the time occupation ceased.
(2) Subsection (1) applies whether or not the landlord
(a) exercises the right to re-enter and repossess the premises, or
(b) elects to affirm or to terminate the tenancy agreement.
(3) In the circumstances described in subsection (1), the landlord is entitled to compensation equivalent to the amount by which
(a) the total, calculated without reference to the operation of an acceleration provision, of
(i) the rent in arrears, and
(ii) the present value of rent payable in the future
exceeds
(b) the total of
(i) the present value of the rent paid or payable by the new tenant if the premises have been re-rented to any extent, and
(ii) the present value, if any, of any portion of the premises which has not been re-rented for any part of the remaining term of the original tenant's tenancy.
(4) In the circumstances described in subsection (1), the landlord is under a duty to make reasonable efforts to re-rent the premises to a suitable tenant at a reasonable rent and, where the landlord fails to do so, the compensation to which the landlord is entitled under subsection (3) is reduced to the extent that the failure contributed to the loss for which compensation is claimed.
(5) For the purposes of subsection (4), the making of reasonable efforts to re-rent the premises does not require a landlord to re-rent the premises in preference to other property.
(6) Where the application of a provision of the tenancy agreement would limit the landlord's recovery from the tenant to an amount less than that determined in accordance with subsections (3) and (4), the compensation recoverable under subsection (3) is limited to that lesser amount.
12 Where a tenant continues to occupy the premises after the tenancy agreement has expired or been terminated in accordance with the tenancy agreement or this Act, the landlord may recover from the tenant
(a) compensation for use and occupation of the premises, and
(b) indemnity for any liability resulting from the landlord's inability to deliver vacant possession of the premises to a new tenant or a purchaser.
13 (1) The interpretation section of the Bankruptcy and Insolvency Act (Canada) applies to this section.
(2) Where a tenant becomes a bankrupt, the trustee, despite a provision of the tenancy agreement, may retain possession of the premises until the earlier of
(a) 3 months from the date the trustee assumes powers with respect to the tenant's estate, and
(b) the expiration of the tenancy,
on the same terms and conditions as the tenant would have held the premises had the tenant not become a bankrupt.
(3) Commencing from the date the trustee assumes powers with respect to the tenant's estate, the trustee must pay the landlord rent, calculated on the basis of the tenancy agreement and payable in accordance with its provisions, for the period during which the trustee has, or is entitled to, possession of the premises, whether that possession, or the right to possession, arises under the tenancy agreement or under subsection (2).
(4) The trustee's liability under subsection (3) for the first month the trustee has, or is entitled to, possession does not exceed the value of the bankrupt's property available for distribution, but the trustee is personally liable for rent after that.
(5) Where a tenant becomes a bankrupt and the tenancy agreement does not provide that the tenancy is terminated by the bankruptcy, the trustee may transfer or dispose of the tenant's interest under the tenancy agreement for the unexpired term to as full an extent as could have been done by the tenant had the tenant not become a bankrupt.
(6) A trustee of a bankrupt tenant may surrender possession of the premises to the landlord at any time.
(7) A surrender under subsection (6) constitutes a disclaimer of the tenancy agreement and, despite section 11, terminates the liability of the trustee and the bankrupt's estate for the payment of rent accruing after the surrender.
(8) A provision of a tenancy agreement that prohibits the sale or liquidation of a bankrupt tenant's property on the premises is enforceable against the trustee.
14 (1) The court may, on application, make one or more of the following orders:
(a) an order that the landlord or the tenant recover
(i) possession of the premises, or
(ii) damages or other relief resulting from a breach of the tenancy agreement or a breach of this Act;
(b) an order that the landlord recover
(i) arrears of rent,
(ii) compensation under section 11 (3),
(iii) compensation for use and occupation under section 12 (a), or
(iv) indemnity under section 12 (b);
(c) an order
(i) that the landlord comply with section 3 (2),
(ii) declaring that a tenancy agreement has been validly terminated under section 4 (2) (a),
(iii) for the relief of a subtenant under section 8 (2),
(iv) declaring that the landlord's consent to an assignment or the creation of a subtenancy has been unreasonably withheld,
(v) for the diversion or reduction of rent under section 10, or
(vi) for the relief of a tenant under section 21, 21.1 or 22 of the Law and Equity Act.
(2) An application for an order under subsection (1) may be by petition.
(3) This section does not affect the jurisdiction of the Provincial Court to hear any claim for the payment of rent or damages.
15 The Lieutenant Governor in Council may make regulations.
16 (1) Except as provided in subsection (2) or (3), this Act applies to tenancy agreements made before this subsection comes into force.
(2) Sections 8 (2) and 10 (3) apply only where the event which gives rise to a right to apply for relief occurs after this subsection comes into force.
(3) Section 11 applies only where the tenant ceases to occupy the premises after this subsection comes into force.
17 The Commercial Tenancy Act, R.S.B.C. 1979, c. 54, is repealed.
18 Section 21.1 of the Law and Equity Act, R.S.B.C. 1979, c. 224, is amended
(a) in subsection (1) by striking out "or" at the end of paragraph (c), adding "or" at the end of paragraph (d) and adding the following paragraph:
(e) a tenancy agreement to which the Commercial Tenancy Act applies, , and
(b) in subsection (3) by striking out "subsection (1) (a) to (d)" and substituting "subsection (1) (a) to (e)".
19 Sections 21.1 (4), 23, 24 and 25 are repealed.
20 The following section is added:
64 (1) In this section "recurring entitlement" includes salary, annuity, rent or other amount payable periodically.
(2) For the purpose of ascertaining rights or obligations under a recurring entitlement at a time when the right to a particular payment has not fully matured, the entitlement is deemed to accrue from day to day and is apportionable in respect of time on that basis.
(3) Subsection (2) does not apply to a recurring entitlement if the agreement, instrument or authority under which it arises stipulates
(a) that no apportionment is to take place, or
(b) that a different apportionment rule is to apply.
21 Sections 5 (2), 7 (3) and 34 of the Property Law Act, R.S.B.C. 1979, c. 340, are repealed.
22 Section 46 (1) of the Residential Tenancy Act, S.B.C. 1984, c. 15, is amended by striking out "sections 11 to 13 and 32 of the Commercial Tenancy Act apply" and substituting "sections 3 (2) and (3) and 13 of the Commercial Tenancy Act apply".
23 This Act comes into force by regulation of the Lieutenant Governor in Council.
This Act repeals and replaces the Commercial Tenancy Act, R.S.B.C. 1979, c. 54.
The Act being replaced is a collection of provisions from various British statutes dating back over many centuries. Many of its provisions are obscure, archaic and confusing.
The new Act is based on a 1989 Report of the Law Reform Commission of British Columbia. The new Act reorganizes and simplifies the Act, replaces outdated language and modernizes many provisions.
Some of the ways in which provisions are modernized are as follows:
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