PART II - Response from Real Estate industry - Re: MASSIVE CHANGES by – vancouver real estate

PART II - Response from Real Estate industry - Re: MASSIVE CHANGES by the BC Gov’t affecting the purchase of tenanted properties

The voice of homeowners and professionals that represent them, Realtors, have pushed back on this legislation by identifying key areas of concern and recommended solutions. Below is an excerpt from BCREA - BC Real Estate Association's press release July 25, 2024. 

 

For Immediate Release

BC Real Estate Association and Canadian Mortgage Brokers Association – BC Identify Significant Issues with Changes to Residential Tenancy Act Vancouver, BC –

July 25, 2024. The BC Real Estate Association (BCREA) and the Canadian Mortgage Brokers Association – British Columbia (CMBA-BC) are calling upon the BC Government to amend and refine recent changes to the Residential Tenancy Act (RTA). Both organizations published open letters outlining concern around unintended consequences and the high potential the changes will negatively impact homebuyers, rental-property owners, and tenants in the province.

 

BCREA noted the following concerns, among others, in its letter to government:

• The new requirement of providing four months' notice – instead of the previous two months' notice – for evictions due to personal or caretaker use is posing a major hurdle. While this is a problem for all buyers, it's particularly problematic for high-ratio buyers, including first-time buyers, who generally need mortgage default insurance to secure their financing.

• The new legislation makes no distinction between a buyer of a tenanted unit who just wants to move into their new home and a landlord who might be using a bad-faith eviction as a tool to raise rents beyond the allowable limit.

• Combining a four-month eviction notice with a 30-day dispute notice produces an effective five month period in which a buyer can't take possession of their new home. This is impractical for buyers moving from one home to another and is too long a period to wait between completions.

• Without default mortgage insurance, lenders require a minimum down payment of 20 per cent for rental properties. First-time buyers typically do not have the financial capacity for such a significant down payment. Furthermore, a default-insured mortgage holder must receive vacant possession to qualify for a default-insured mortgage and cannot close on a purchase where the former tenant has not vacated the home.

• A home must be owner-occupied to be eligible for homeowner insurance and also for mortgage insurance from Canada’s largest providers of mortgage insurance, including CMHC.

• Using a new web portal, landlords will be required to provide personal and confidential details about the persons moving into the home, which will then be shared with the tenant. This new requirement is raising serious implications for the privacy and security of owners.

 

FULL PRESS RELEASE

 

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