Residential Tenancies Branch

Section 13 

Rent Regulation

Sub-Section 13.9

Rent Review - Non-Profit Life Lease Complex

Legislation

S. 140.1, The Residential Tenancies Act
S. 27(1), The Life Leases Act

Definitions

Operating costs:  for non-profit life lease complexes, an operating cost is a cost incurred to run the complex; it can include: property taxes, insurance, utilities, mortgage interest and capital repair and replacements.

Refund fund:  a fund a landlord sets up to refund entrance fees to tenants when their tenancies end; a refund fund may become "fully funded" when there is enough money in the fund to cover the total amount of all entrance fees the landlord owes to former tenants and the total the landlord would owe to current tenants, if everyone ended their life leases.

Rent review: a process for the Branch to review the rent increases for non-profit life lease complexes; tenants can ask the Branch to review the amount of the proposed rent increase and to ensure that the landlord is using the tenants’ life leases to calculate the tenants’ share of the operating costs.

Reserve fund: a fund a non-profit landlord must set up to pay for repairing and replacing major items like a roof, heating and plumbing systems and parking facilities; a landlord may also use a reserve fund to cover any unexpected cost or shortfall in revenue for a complex.

Policy

When reviewing the rents, the Branch considers the budgeted costs shown in the complex’s life lease agreement. However, the Branch reviews all costs to ensure that the money was spent or will be spent for the benefit of the tenants in the complex.

The Branch may not allow contributions to a refund fund as part of the operating costs. However, this would likely be done only if the refund fund is "fully-funded."

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The Branch may order a landlord to withdraw money from a reserve fund and apply it to the operating costs for a complex or the Branch may not allow a landlord to contribute more money to a reserve fund. When considering this kind of order, the Branch asks the landlord if there has been a reserve fund study done. If there has been a study, the landlord will likely have set aside reserve fund money for a specific repair or replacement. The Branch would usually consider only the excess or "unreserved" portion of the fund. If there is no reserve fund study, the Branch needs to estimate and infer what the balance in the fund needs to be to cover future repair and replacement costs.

Procedure

Overview   

An officer reviews a tenant’s request for a rent review. The officer may ask the landlord to complete a rent review statement. The officer notifies all tenants in the complex of the rent review. The officer reviews the rents for the complex, taking into account the financial information provided and the terms of the life leases, the tenants’ comments and the landlord’s response to them. The officer issues an Order, which includes reasons. The landlord and tenants get copies of the Order.

Steps ▼   

1.   The officer reviews the tenant’s request for a rent review. In some cases,       the officer may find that, although the tenant is asking for a rent review,       they have a problem that can be resolved in some other way. For       example: The tenant’s stove may need repair. If the officer contacts the       landlord about the tenant’s concerns, the landlord may fix the stove. The       tenant may then withdraw their request for a review.

2.   If the officer decides to proceed with a rent review, they will send a letter to       the landlord, asking the landlord to complete a rent review statement and       return it to the Branch within two weeks. The officer will also ask the       landlord for the names and mailing addresses of all the tenants in the       complex.

3.   If the officer doesn’t get the information by the deadline, they will       telephone the landlord. If necessary, they will give the landlord another       five days to submit the information. They will confirm the telephone       conversation by letter. If the officer still doesn’t receive the information       from the landlord, they will make a decision based on the information on       file.

4.   When the officer has all the information required, the officer sends the       tenants a letter to advise them of the rent review. Tenants are invited to       inspect the landlord’s application and to comment on it. Comments must       be in writing.

5.   The officer then invites the landlord to review and comment in writing on       the tenants’ statements.

6.   The officer prepares a worksheet, which shows any changes to the rent       review statement, with a short explanation for each change. The officer       must ensure that the budgeted costs or costs incurred are reasonably       attributable to the operation of the complex for the benefit of the tenants       and that the amounts in the reserve funds are reasonable.

7.   The officer issues an Order to the landlord and tenants that:

• adjusts or disallows any of the budgeted costs;
• requires the landlord to apply money from one or more reserve funds to operating costs;
• disallows future contributions to a reserve fund or refund fund;
• sets the rent that the landlord may charge for the rental units, based on the terms of the life leases.

8.   Either the landlord or tenants can appeal the Order.

9.   If the landlord doesn’t submit the information the officer needs to do a       rent review, the officer may issue an Order disallowing the rent increase.

Forms & Form Letters

X-Referencing

None

Policy Developed

March, 2004

Last Revision

Other Resources

None

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