Most landlords in BC require a fixed-term tenancy agreement – commonly referred to as a “lease”. Although you may prefer the flexibility of a month-to-month agreement, you might have to settle for a six-month or one-year lease to secure a home in BC’s competitive rental market.
If you are like most tenants and rent your home on a lease, what happens if life throws you a curve ball and you have to move out early? Are you allowed to give notice to end your lease? Is there a penalty for leaving with months left on your contract?
These are common questions we hear at the Tenant Resource & Advisory Centre (TRAC), a non-profit organization that offers free legal information to help you navigate BC’s challenging rental market.
Read on to learn about the rules regarding breaking a lease in BC – one of the most commonly misunderstood topics among tenants and landlords.
Consequences for breaking your lease
Having to break your lease can be a scary thought, especially if you have several months left on your contract. But the situation may not be as dire as you think.
Although you may end up having to pay your landlord some money for ending your tenancy early, you do not automatically owe the remaining months of rent. It’s possible you may not have to pay anything at all, depending on how quickly your landlord can find a replacement tenant.
Once you have broken your lease, your landlord has an obligation to minimize your loss by trying to re-rent your place at a fair price. This means advertising your unit, scheduling viewings, and otherwise taking reasonable steps to find a new tenant. (Residential Tenancy Branch Policy Guideline 5)
If your landlord ends up losing rental income after making an honest effort to replace you, they might have a case for some compensation.
For example, if it takes your landlord a few weeks to fill the unit, or they have to settle for less rent per month, you might owe them their lost rental income. However, if your landlord finds a replacement tenant without losing any money, they cannot generally ask you for compensation. (RTB Policy Guideline 3)
Before breaking your lease, you should check if your tenancy agreement has a “liquidated damages” clause. If so, you might owe your landlord some money for the costs associated with re-renting your place, such as the time it takes to show your unit to prospective tenants.
Liquidated damages are meant to be a reasonable pre-estimate of the cost of re-renting a unit – not a penalty for breaking a lease. (RTB Policy Guideline 4)
Ending your lease early
Even though the consequences for breaking a lease can be minimal, it is still something you should do your best to avoid – especially if there are other options available.
Here are four situations where you might be able to end your lease early, according to the Residential Tenancy Act (RTA).
- Mutual agreement to end tenancy: The Residential Tenancy Branch offers an official form that a tenant and landlord can use to mutually end their end tenancy. If you have a positive relationship with your landlord, the two of you can agree to end your tenancy on a certain date under your own conditions. (RTA section 44)
- Assignment: An assignment occurs when a tenant moves out and transfers their tenancy agreement to a new tenant. To assign your lease, you need to obtain your landlord’s permission in writing. However, if your lease has at least six months remaining on it, your landlord cannot unreasonably withhold their consent. (RTA section 34(2))
- Breach of material term: You can consider ending your tenancy on short notice if your landlord has breached a “material term” (very important term) and failed to correct the situation within a reasonable period after receiving written warning. The bar is set high when ending your tenancy for breach of a material term, so only rely on this strategy when facing an extremely serious situation, usually related to health and safety. (RTA section 45(3))
- Family violence or long-term care: You can break your lease with one-month written notice if you: (1) need to leave your rental unit to protect yourself or your children from family violence or (2) are assessed as requiring, or are accepted into, a long-term care facility. To legally end a tenancy in these circumstances, you must provide your landlord with a completed Residential Tenancy Branch form, “Ending Fixed Term Tenancy Confirmation Statement”, signed by an authorized third-party verifier. You can review Part 7 of the Residential Tenancy Regulation for a full list of verifiers, but some common examples for both family violence and long term care include a medical practitioner, nurse practitioner, psychologist, and social worker. (RTA section 45.1)
Breaking a lease can be a complicated topic. Visit TRAC’s website, take our online course, or call our Tenant Infoline (1-800-665-1185) for more information.