Rent Regulation |
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Sub-Section 13.6 |
Rent Discounts |
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Definitions |
Allowable rent: the maximum amount a landlord can charge for a rental unit; this amount is based on:
Rent: the amount of money paid by a tenant to a landlord for the right to occupy a rental unit and the use of common areas, services and facilities; rent includes any service/facility for which the tenant pays a separate charge (For example: parking, storage locker.) Rent discount: a contractual arrangement between a landlord and tenant allowing a tenant to pay less than the allowable rent on their rental unit. A rent discount must be set out in a written agreement and can:
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Policy |
A rent discount agreement must be in writing. A landlord may either:
The landlord must give the tenant a copy of the written agreement. <><><><> A rent discount on a fixed-term tenancy agreement applies for the full term of the agreement, unless there is a written time limit. For example: The tenancy agreement is from January 1 to December 31. The agreement specifies that the discount only applies from January 1 to June 30. If the landlord chooses to remove or reduce the discount when renewing the tenancy agreement, the landlord must give the tenant written notice. The landlord must give this notice at least three months before the tenancy agreement ends. For example: If the landlord is removing the discount on a tenancy agreement that is being renewed effective July 1, the landlord must give the tenant written notice of the removal on or before March 31. Eliminating the discount on a tenancy agreement renewal is not a rent increase. <><><><> On a month-to-month agreement, a discount is in effect until the landlord gives the tenant three months' written notice to remove or reduce the discount. Landlords may offer tenants conditional discounts for a variety of reasons, such as an incentive to enter into a fixed term tenancy agreement or to pay the rent on time. If a discount is conditional and a landlord chooses to discontinue offering a discount or to reduce the amount offered each month, the landlord must give the tenant three months' written notice to remove or reduce the discount. If a discount is conditional for example: a $20.00 discount each month for paying rent on time and the tenant does not meet the condition one month, the landlord is not required to offer the discount that month. However, the landlord would be required to continue offering the discount for future months, until they give the required notice to remove it. There is one exception. The landlord would not be required to give further notice to remove the discount if the discount agreement states clearly that, if the tenant breaches the condition for the discount, the tenant will no longer be entitled to receive the discount in the future. In some cases, if a tenant fails to comply with a condition to pay rent on time, the landlord intends that the tenant shall lose the discount not only for the current month, but for all the previous months of the agreement. In other words, the tenant has to pay back all previous discounts received from the start of that agreement. To enforce such a condition, the landlord's discount agreement must show clearly that the tenant will be responsible to pay the landlord back for all discounts received since the start of the current discount agreement. Here is some sample wording:
Ø will lose the rent discount for that month; and Ø must pay back, to the landlord, all discounts received since the start of this agreement. When making a determination on a claim by a landlord for the return of a discount, the Branch may consider:
If the Branch determines that the tenant must pay the landlord back for previous months' discounts, it will only include the discounts the tenant received under the most recent agreement. <><><><> Some tenancy agreements may state that a tenant is entitled to a discount only if they live in the rental unit for a specific period of time. For example: The tenant is entitled to a rent discount of $50.00 per month as long as they live in the rental unit from October 1, 2004 to September 30, 2005. If the tenant doesn’t fulfil their obligation to stay in the unit for the specified time, the landlord may want to make a claim against the tenant for the amount of the discount for the months the tenant lived in the unit. For example: The tenant receives a discount of $50.00 per month on the condition the tenant live in the unit for 12 months. The tenant leaves after four months. The landlord wants the tenant to pay back $200.00 (4 x $50.00). To make a claim like this, a landlord must be able to show that the tenant knew they would have to pay back their rent discount if they didn’t live up to the agreement. If a tenancy agreement or discount agreement is conditional, it must be very clear what will happen if the tenant breaches the agreement. For example: The tenant is entitled to a rent discount of $50.00 per month. To be entitled to this discount, the tenant agrees to live in the rental unit from October 1, 2004 to September 30 2005. The tenant understands that if they move out of the rental unit before September 30, 2005, they must pay back the discount they receive for the months they occupy the unit. <><><><> A landlord may use the allowable rent to calculate a rent increase, instead of the lower, discounted amount. For example: The allowable rent is $550.00 per month. The tenant pays $500.00; the $50.00 rent discount is recorded in the tenancy agreement. The landlord calculates the rent increase on $550.00. <><><><> When a landlord applies for a rent increase above the guideline, the landlord may want to say to the tenant that the amount of the discount will depend on the rent increase the Branch allows. A landlord can do this as long as they clearly explain their plan to the tenant. For example: A landlord applies to increase the rent from $650.00 to $725.00. The landlord’s Notice of Increase in Rent and tenancy agreement show that, if the Branch approves the increase, the landlord plans to offer a $50.00 discount. On the forms, the landlord also clearly shows that, if the Branch allows a smaller rent increase, the landlord will re-calculate the amount of the discount. If, in the Order, the amount of the rent is lower, the landlord should send the tenant a letter to confirm the amount of the discount. This should help avoid any misunderstanding on how much rent the tenant is to pay. To remove or reduce a discount, a landlord must give a tenant three months' written notice. <><><><> If a landlord charges a tenant a lower rent than the allowable on a unit, but doesn’t record the discount in writing, the landlord reduces the allowable rent on that unit. The landlord must calculate future rent increases on the lower amount. For example: The allowable rent on a rental unit is $550.00. The landlord rents the unit to a tenant for $500.00. The landlord doesn’t have a written agreement to show that the rent is discounted by $50.00 per month. Since there isn’t a written agreement, the allowable rent is reduced to $500.00. When the landlord increases the rent, they must calculate the increase on $500.00, not $550.00. After the tenant moves, the landlord may be able to put the rent back to $550.00 if they notify the new tenant of the rent increase. (See Rent Increase for New Tenant in this section.) <><><><> |
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Overview |
This policy is included as information for landlords, tenants and officers. If tenants and landlords aren’t able to solve a problem with rent discounts on their own, they can ask the Branch for help. |
Steps ▼ |
1. The officer encourages the landlord and tenant to share information and to discuss the problem, to try to come to some agreement. 2. When a landlord or tenant asks the Branch for help with a rent discount problem, the officer follows set procedures for:
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Forms & Form Letters |
Notice of Rent Increase....................Form 1A/Residential Rent Regulation |
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X-Referencing |
For procedures on mediation, see Section 1. |
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Policy Developed |
September, 1992 |
Last Revision |
August, 2015 |
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Other Resources |
None |
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