Investing in a rental property in British Columbia can be a lucrative venture, but it requires careful consideration of recent legislative changes that impact property use and tenancy and the risks associated with those changes. Notably, the introduction of the Short-Term Rental Accommodations Act (STRAA) and amendments to the Residential Tenancy Act (RTA) 2024 have significant implications for potential investors in BC.
Understanding the Short-Term Rental Accommodations Act (STRAA)
Effective May 1, 2024, the STRAA imposes new regulations on short-term rentals with the stated purpose to increase the availability of long-term housing. Key provisions include:
- Principal Residence Requirement: In most BC communities with populations over 10,000 or adjacent to larger municipalities, short-term rentals are limited to the host’s principal residence plus one secondary suite or accessory dwelling unit (with some exceptions).
- Regional District Authority: Regional districts now have the power to license short-term rentals outside municipal boundaries.
- Data Sharing and Enforcement: Short-term rental platforms are required to share data to aid in monitoring and enforcing these rules.
- Removal of Grandfathering Provisions: Legal non-conforming use protections for existing short-term rentals have been eliminated, requiring all operators to comply with current regulations.
- Provincial Registry: A registry for short-term rentals has been established to ensure compliance.
These regulations set a baseline, and municipalities may enforce stricter rules. For instance, the City of Kamloops has prohibited short-term rentals as a secondary use in all zones.
Amendments to the Residential Tenancy Act (RTA)
Changes to the RTA, effective July 18, 2024, initially extended the notice period for evictions due to personal or caretaker use from two to four months and increased the dispute period from 15 to 30 days. However, following feedback from industry stakeholders, the government amended these requirements on August 21, 2024:
- Personal-Use Evictions: The notice period was adjusted to three months when a landlord gives notice on behalf of a purchaser.
- Dispute Period: The period for tenants to dispute such notices was set at 21 days.
Key Considerations for Prospective Investors
When purchasing rental property in BC, consider the following:
- Compliance with STRAA: Ensure the property aligns with the principal residence requirements and other provisions of the STRAA. Verify whether the property’s location is subject to additional municipal restrictions.
- Due Diligence on Tenancies: If acquiring a tenanted property, understand the current tenancy agreements and the implications of the RTA amendments on eviction notices and dispute periods.
- Municipal Bylaws: Research local bylaws, as they may impose stricter regulations than provincial legislation. Some municipalities have opted in or out of certain provisions, affecting rental operations.
- Strata Regulations: If investing in a strata property, review the strata bylaws for any restrictions on rentals, including short-term accommodations. Check out our article on Strata Properties HERE.
- Financial Implications: Assess how these legislative changes impact the property’s revenue potential, especially if you intend to operate short-term rentals.
- Professional Advice: Consult with real estate professionals and legal advisors to navigate the complexities of these regulations and ensure informed decision-making.
Staying informed about legislative changes and conducting thorough due diligence are essential steps in successfully investing in rental properties in British Columbia. If you need assistance or have any questions, our Real Estate Law team is here to help.
