Residential Tenancies Branch

no legislative references

Definitions

Option to Purchase agreement: a tenant lives in a rental unit with an option to purchase the unit, usually by a specific date. The landlord may apply some of the tenant’s rent to the purchase price, but this isn’t always the case. For example: If the tenant buys the house, the landlord will apply 10% of the rent paid to the purchase price.

Rent-to-own agreement: a tenant pays rent and an additional monthly payment towards the purchase of the house.

Tenancy agreement: a contract between a landlord and a tenant for a tenant that sets out the basic rules for living in a rental unit. It can be written, oral or implied.

Option to Purchase and rent-to-own agreements are residential tenancies.

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As long as only part of the money the tenant pays goes towards the purchase price of the unit, it is a landlord and tenant relationship. If all the money goes towards the purchase, it is not a tenancy.

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When preparing a rent-to-own agreement, a landlord should clearly show how much of the tenant’s payment is considered rent. For example: The tenant is required to pay $600.00 each month. The landlord will apply $200.00 of each payment to the purchase price of the unit. The tenant’s monthly rent is $400.00.

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If a tenant on a rent-to-own agreement doesn’t pay, the landlord may file a claim with the Branch. However, the Branch only has the authority to deal with a claim for unpaid rent. Again using the figures above, the Branch could only award a maximum of $400.00 each month.

Procedure

Overview

An officer reviews the rent-to-own contract and helps mediate the dispute. If an agreement can’t be reached, the officer makes a decision and issues an Order.

If the agreement is not a tenancy agreement, the officer refers the buyer and seller to their lawyers.

Steps ▼

1.If a landlord or tenant, in a rent-to-own agreement, asks the Branch for help, an officer will:

• review the agreement; and
• get more information from the landlord and tenant.

2.If it isn’t clear whether the agreement is a tenant and landlord contract, the officer may schedule a hearing.

3.If it is a landlord and tenant agreement, the officer will:

• give the tenant and the landlord the information they need;
• offer mediation as a way to resolve problems;
• refer the file for a decision and Order, if mediation isn’t successful.

4.If the agreement doesn’t create a landlord and tenant contract, the owner and buyer should talk to their lawyers about how to proceed .

Forms & Form Letters

X-Referencing

For information on Mediation, see this section.
For details on rent increases, go to Section 13.
For more information on Claims for Compensation see Section 9.

Policy Developed

September, 1992

Last Revision

March, 2004

Other Resources

None

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