1993 Legislative Session: 2nd Session, 35th Parliament HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
TUESDAY, JULY 13, 1993
Morning Sitting
Volume 12, Number 4
[ Page 8557 ]
The House met at 10:04 a.m.
Prayers.
U. Dosanjh: I have the honour to present a report from the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills. I move that the report be read and received.
Motion approved.
Law Clerk:
"Your Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills begs leave to report as follows:
"The preamble to Bill Pr401, intituled Lower Fraser Valley Exhibition Association Amendment Act, has been proved, and the committee recommends that the bill proceed to second reading.
"All of which is respectfully submitted. U. Dosanjh, Chair."
U. Dosanjh: Hon. Speaker, by leave I move that the rules be suspended and the report adopted.
Leave granted.
Motion approved.
Hon. M. Sihota: I call second reading of Bill 67.
RESIDENTIAL TENANCY AMENDMENT ACT, 1993
(continued)
The Speaker: The hon. member for West Vancouver-Capilano.
J. Dalton: Thank you.
The Speaker: My mistake. I am just trying to find the notice. Did the hon. member for Malahat-Juan de Fuca adjourn debate? Please proceed, hon. member.
R. Kasper: Just to follow up on the continuation of debate from the other evening, I think it would be remiss on my part not to acknowledge the efforts of members of the third party and the opposition during my review of manufactured-home laws in British Columbia. I had a great deal of discussion with those members, in particular the members from the Okanagan and Kelowna areas. I know that they have raised concerns dealing with tenancy arrangements of manufactured-home owners on native land, and I feel that with the commitment made by the minister and the Minister of Aboriginal Affairs, those issues will shortly be resolved. Again, it's a matter of consultation with the aboriginal community and the third-party process, in dealing with future negotiations on self-government and land negotiations. The third-party interests of manufactured-home tenants will in fact be addressed.
I know that the members of the third party -- who were members of the previous government -- passed on what they had done in the past and the issues that were raised. I felt that there was a great deal of cooperation when working with those individuals.
I would urge all members of this House to support the important steps the government has taken to address the inequities that have been allowed to go on for too long. In closing, I urge members to support this bill.
[E. Barnes in the chair]
J. Dalton: There are a few particular points in this bill that I'm going to comment on. Generally speaking, both I and the opposition intend to be supportive of the intent of the bill. There are certain things in here that are long overdue.
The first point I will comment on is the return of the security deposit. I'm pleased to see that the time for the landlord to return the deposit to the tenant has been reduced from 30 days to 15. However, I have some concern as to how the return of the deposit is actually going to be carried out. From my experience, both in the legal world and as an instructor of law at a college, I'm aware of many complaints that have come forward over the years about the return of the security deposit. Even though shortening the time limit from 30 days to 15 is well intended, that of itself is not going to be the magic formula whereby the deposit will be returned to the tenant who has given up possession of the leased premises.
The main concern over the years has been that landlords, rightly or wrongly, have held on to the security deposit, knowing full well that most tenants will not make the effort to seek legal action, through either the courts or arbitration, to get the deposit returned. Personally, I cannot really see how shrinking the time period in itself is going to resolve that problem. In this bill, it is now the obligation of the landlord to go to arbitration to show cause why he or she should be able to keep the deposit. As I say, that is not necessarily going to mean that the deposit will be returned in a timely fashion to the tenant who has vacated the premises. However, I think we could say that at least the government is headed in the right direction, because without question the security deposit issue has been a most contentious one over the years. We're not talking about small amounts of money. When you consider a half-month's rent as a security deposit these days, it can be several hundred dollars. There are well-documented cases where large corporate landlords have been able to profit in the thousands of dollars every year because of this issue. That's one that we must flag, and in committee stage we will certainly have to ask some specific questions on that issue. As I say, at least it's well intended; we're headed in the right direction.
The rent review process dealing with manufactured-home owners is probably also long overdue, as long as, heaven forbid, we're not heading into some
[ Page 8558 ]
consideration of rent control, which the previous NDP administration brought in. That proved to be a disaster. Rent review is fine, but let's restrict it to that. The standard form tenancy agreement is certainly a good move both for tenants and, I would submit, for landlords. Sometimes many landlords think they have an advantage over tenants; that isn't necessarily true. Very often landlords will create a document or just pick up a form that may be handy, without fully under-standing the content of it. So a standard form and more simplistic agreement for both landlord and tenant would be a desirable thing. I note that in the bill the use of plain language will be encouraged, although sometimes plain language is not as plain as one may think.
The provision in the bill about the landlord requiring a permit or approval for demolition is also long overdue. It has probably been, over the years, the second most contentious item about tenants being given notice to vacate on the understanding that the premises will be either significantly renovated or demolished. Unfortunately, that has not been the case in many situations. The result is that tenants have been forced to vacate premises on a supposition that has not proven to be well founded. Therefore the requirement that the landlord who is giving such notice must actually have a permit or approval for demolition will prevent disruption in the lives of tenants, many of whom are forced to vacate and then find after the fact either that the intention of the landlord was not carried out or that the landlord perhaps did not have such an intention in the first place. I think this amendment is a desirable one.
Also, we note in the bill that through arbitration any personal property of tenants wrongfully held by a landlord must be returned to the tenant. Residential tenancy law does not permit landlords to do this, but that doesn't mean it doesn't happen. The bill is going to address this, and that's also a positive change.
[10:15]
Overall, the intent of the bill is one that the opposition can support. There are a few items in particular that we will certainly have to raise at committee stage and certain questions that will be asked, but I think we can say with reasonable assurance that for the most part the opposition will be supportive of this bill.
W. Hurd: I'm pleased to rise today and enter into debate on amendments to the Residential Tenancy Act. I'm particularly interested in the issues surrounding manufactured homes, of which there are a number in my riding. I'm well aware of the kinds of disputes and uncertainty that arise because of rental increases in manufactured-home parks in the absence of due process, or at least a feeling by manufactured-home owners that there is a lack of due process in the way that pad rental increases take place. So I'm particularly pleased to rise today to support the amendments to section 22, which specifically deal with manufactured-home parks.
I understand that these revisions have the support of both the manufactured-home owners and the owners of the manufactured-home parks themselves, which is encouraging. It clearly indicates that when this bill becomes law, there is an excellent chance that it has the support of both parties -- who have been adversaries in the past on some issues -- this might be the long-sought-after solution to deal with a form of housing which, as I have indicated in the chamber before, has great promise as an affordable housing option in the province. But it has traditionally been held back by the absence of rules regarding rental increases for individual pads and the lack of security that was felt by individual manufactured-home owners in the parks.
I am also supportive of the intent of the bill as it relates to damage deposits. As the ministry has indicated, 40 percent of all disputes involving landlord and tenant come as a result of security deposits, the orderly return of those deposits and whether a landlord is entitled to retain them, based on damage to the premises. As the member for West Vancouver-Capilano has indicated, it is often the case that because of the dollars involved, tenants are reluctant or unable to pursue remedial action when they move on. So the opposition is supportive of this particular change as well.
In dealing with the damage deposits, we hope that the Ministry of Social Services, for example, might use the remedial action in this bill to retain its share of damage deposits in the event of social service recipients moving on. That issue has been raised in this House in the past, where money was advanced by the ministry for damage deposits, the social services recipients moved on and that money was remitted to the landlord, again because of a dispute between the landlord and the tenant over what damage might have occurred. The taxpayers of the province and the ministry are not disinterested third parties in these kinds of transactions, so we hope that the effect of this bill would be to encourage the ministry to take a more active role in assisting in the recovery of funds for damage deposits that might now be easier to have returned.
The arbitration process contained in the bill, again, is an encouraging improvement, given the fact that so many disputes exist on a variety of issues -- particularly on the issue of damage deposits, but on other issues such as pets, noise and other such issues. There is now a process by which these disputes can be mediated.
There are a number of issues, however, that we will be canvassing carefully in committee, particularly the sections related to the manufactured-home parks. We also have some questions about the costs for the review hearings and the arbitration process, which we will be more appropriately addressing to the minister when his staff is present during committee stage. Generally speaking, the opposition supports the intent of the legislation. A few clarifications will be sought during committee stage. Generally, I think the government has made a credible and honest effort to bring forth a set of guidelines and regulations which appear to us to have the support of the affected parties. Certainly in principle I think the legislation deserves the qualified support of the opposition. With those brief remarks,
[ Page 8559 ]
and especially pledging my support for the sections involving the manufactured-home issue, I certainly welcome other speakers to engage in debate.
Again, I want to emphasize how important it is for the sections related to manufactured-home parks to receive the support of other members of the assembly, because I believe them to be a positive effort on the part of the government to deal with a critical issue to manufactured-home owners, who have felt for years that while their problems were well identified, the government's solutions were elusive. So one would hope that the retroactive nature of the clauses, which go back to October 1 -- and again, it is an issue we will be asking about in committee -- will provide some relief to those owners of manufactured homes who have already faced rental increases as a result of the sale of their pad, for example, or the sale of a pad near them. One of the big problems was the fact that every time a pad sold in a manufactured-home park, it established a new rent ceiling for that particular mobile-home pad. We welcome the opportunity to canvass these issues in committee stage. Certainly the intent and principle of the bill has the support of the opposition.
B. Copping: I am very happy to speak in support of this bill. By sheer coincidence, last week when second reading of this bill was being discussed around 10:30 at night, all the tenants of one of the manufactured-home parks in my riding received eviction notices. This dispute resolution mechanism is an example of how this bill will help manufactured-home owners.
Local park committees will be established, and tenants and landlords can resolve their disputes without, hopefully, deciding to evict. If an eviction is necessary, the notice will be 12 months instead of six months. The people in my riding have had ongoing disputes; they have lived with a great deal of uncertainty. I recognize there are arguments regarding private property, but putting private property out for rent is a very serious decision. A moral responsibility goes with it, because we are talking about people's lives and their homes.
This bill is very serious. It is a bill of consensus and, as I say, one of dispute resolution. In other manufactured-mobile parks in my riding, people have had very large rent increases -- 150 percent in one year. Again, this bill enables dispute resolution for that, so I am very happy. It may not necessarily help those who have just received notice under the wire, but they will certainly be happy to see that this bill is going to go through.
L. Hanson: I don't know what percentage of B.C. citizens are renters, but it is certainly a significant part of our population. With that in mind, the bill is very important and justifies a fair amount of scrutiny when we get to committee stage.
The difficulties that have been experienced in the residential tenancy legislation in the past have been mostly to do with landlords who we might consider irresponsible. I'm sure that the minister and members of this House would recognize that we have irresponsible tenants also. The difficulties that have been experienced are not completely one-sided. One of the things we must strive for in any legislation controlling the unique relationship between landlord and tenant is to arrive at a balance whereby the available inventory of rental accommodation is somewhere close to the demand or, hopefully, in excess of the demand, so that those people who do rent, for whatever reason, have the opportunity to choose where they might take advantage of rental accommodation.
We have to be very sensitive to the difficulty of supply and demand in any legislation like this. The Minister of Municipal Affairs has taken some initiatives to provide housing and encourage housing through his ministry. But the fact is that to provide ample accommodation for those people who need it, we need to have the serious participation of the private sector, or that accommodation will just not be there. What we should all recognize and strive for is a balance between the rights of the tenant and the landlord, so that there is an incentive to provide this kind of accommodation, because we all recognize that we need it.
I know that a standard rental accommodation form has long been an issue with tenants. In some cases, landlords who I would consider irresponsible put clauses into the tenancy agreements that were unenforceable, unreasonable and unjustified. Even though those clauses were unenforceable, tenants were concerned -- maybe because of lack of knowledge of what is enforceable and what isn't -- that the clause was there. So I think that the standard form the minister has laid out in the bill is a good and reasonable approach to it.
[10:30]
One of my concerns with the act is that a relatively simple dispute resolution process has been converted to the point of being a pretty formal and technical process. It may develop that we will have lawyers representing tenants and landlords appearing before the arbitration process because of the procedural rules and precedent-setting decisions that are now going to be considered in making those decisions. To me, that seems to complicate the process to the detriment of tenants and landlords. I suppose that only time, when we see the actual application of this, will really tell us what the result will be. Even though the past process may have had some shortcomings, it was certainly a less formal process and gave the opportunity of getting a very quick, formalized decision out of the tenancy arbitrator. I hope that with the changes we have here, we won't lose that procedure, which was an excellent one from the point of view of both of the parties.
In dealing with the mobile-home pad controls, and the new processes for the management of those parks, we have a very unique situation. We have an individual renter who has a large investment -- i.e., the mobile home itself -- which is put on a piece of land that is not owned by the owner of the mobile home. So we have a combination of a tenant, an owner and a landlord, and that relationship is much more complex than the simple renting of an apartment by a tenant. I have had a number of concerns addressed to me about irresponsible rent increases -- at least, irresponsible in the opinion of the tenant.
[ Page 8560 ]
I have little difficulty with the process that the minister is suggesting. I have difficulty with what the result might be. My understanding of the situation now is that there is a tremendous shortage of pads for the use of mobile-home owners, and that if we don't balance the interests of the landlord with the interests of the mobile-home owner, there will be a reluctance to develop mobile-home pads. Therefore, even though we may have solved one part of it, we may eventually see a more serious difficulty in another area. It has been referred to as the waterbed effect, where you cure one problem and it comes out at another place.
Let's hope that isn't the case, because the atmosphere, and the ability of mobile-home owners to live in a park-like setting, has been very attractive to a number of citizens -- sometimes because it may cost less, but generally speaking, because the community style of living, with central recreation facilities and that sort of thing, is much enjoyed. We hope we can resolve the difficulties that come and still keep an adequate supply available for that particular purpose.
The largest difficulty in my experience has been with mobile-home parks that have been developed on native lands. The difficulty, of course, will be that even though the minister does have the authority under this act to regulate certain parts of it, the act would not apply to native lands, because they come under another jurisdiction. I suppose that when we get into commitee stage of the bill, the minister may give us some idea of the approach he sees for applying these sorts of regulations and rules to mobile-home parks on native lands. I look forward to that with some interest, because it is a major part of the concerns that have been addressed to my constituency office. In most cases, I think they have been very valid concerns.
I look forward to the debate in committee stage on the individual clauses of the bill, to get a better understanding of some of these changes, which now appear to complicate the arbitration and mediation process. Maybe when we get to committee stage of the bill we will get a better understanding of how the minister sees the various clauses being applied in the practical application of the bill. With that, I look forward to committee stage of Bill 67.
V. Anderson: I have just one major area of concern with Bill 67, the Residential Tenancy Amendment Act, 1993, and that has to do with the security deposit arrangement between landlord and tenant and the refunding of that. I know this is a major concern for renters and landlords alike, and it is important that it be clarified. However, I'm not sure I see that clarification in this particular act. The process still seems to be very uncertain and cumbersome. The time for the landlord to repay the tenant has been reduced to 15 days from 30. However, the kinds of conditions that apply when refunding that deposit or keeping some of it are extremely unclear. It seems to me that the process will involve a great many more arbitration processes than we now have. Even if an appeal is put forward, it goes to arbitration and an order is given, it is unclear whether that order can be executed. If the order is not followed through, there is no clear process as to what happens beyond that. I would simply flag the importance of us being able to go into more detail in committee stage about this arrangement between landlord and tenant, which is very unclear.
H. De Jong: I'm pleased to rise and speak on Bill 67, the Residential Tenancy Amendment Act, 1993, because it also applies to a number of people in trailer parks, particularly, in my community. To start off, I would like to say that it appears that this bill makes some rather striking changes to what has been happening in the past. I'm not so sure that it goes far enough. I know that it will perhaps take some management decisions away from park owners and turn them over to park committees, consisting of representatives of owners and tenants. In a sense, that is a good process. I'm not sure whether we need all the bureaucratic setup that will follow that. There are quite a number of complaints from time to time.
At the same time, I think we have to look at the variety of rental availability, in terms of apartment blocks, which usually have a much quicker changeover than mobile-home parks do, for instance. Apartments can change on a monthly basis, a six-month basis or whatever, but they're usually rented by the month. That is quite different from a person who has purchased a mobile home and places it in a park, which is a long-term rental situation. For the apartments, I can understand the damage deposit being put in a trust. I have no problem with that, and I don't think the apartment owners would either. The real problem, which the bill is silent on, occurs when the damage exceeds the amount of the deposit. I hear from apartment owners that it happens quite often. Again, this is where the act is silent, and I had hoped that there would be some safeguards put in this act for the owners, particularly apartment owners. But it's missing, unfortunately.
I think there are a variety of mobile-home parks. Some of them have been there for a long time; they've got all kinds of trailers in there -- older ones and newer ones. Then there are the mobile-home parks that are owned or co-owned by the mobile-home builder. This creates somewhat of a problem at times, because these parks allow only that particular make of trailer within that park in order to form some unanimity, but also because there is a double interest, you might say, in terms of the land being provided as well as the mobile homes being manufactured. It's these kinds of mobile-home parks where we have the most problems, in terms of continuing rent increases on a yearly basis, quite often simply because the price of surrounding land has gone up. In direct relation to that, the rental increases affect the residents of that trailer park. When mobile-home owners move into a park like that, they are going on a rate that is fairly attractive because it's a package sale of a trailer along with a pad to be rented. But it appears that that benefit is soon forgotten by the mobile-home park owner.
Therefore I would have liked to have seen, in situations where a mobile-home park is established and there's a joint package agreement, the rental agreements.... I don't think they could be expected to
[ Page 8561 ]
be for ten years, but a five-year agreement for a certain base of rent, with perhaps a minor increase each year for the increase of actual costs to the mobile-home park, may be acceptable. I don't see, because of this long-term investment that the homeowner makes by moving into that place, that the mobile-home park owner has an investment which is increasing by the price of surrounding lands. I have difficulty with that. I would liked to have seen the bill go a little further on that, because I believe that that the real crux of the matter is: what do people feel? They feel like captives in that mobile-home park, because in many instances they cannot sell the trailer, since a lot of mobile-home parks will not take a five- or ten-year-old trailer and move it into another one -- they want only new trailers. I suppose there is something to be said for that, but it does put the mobile-home owner in a very untenable position if there is no recourse on the rental increases.
[10:45]
I realize that the minister has proposed the same kind of organizational structure in terms of dealing with those increases, but I don't think that we are solving the matter completely. This joint ownership by the mobile-home manufacturer and the mobile-home park owner does not give the person who rents into those places any leeway. In fact, it will depreciate the value of the owner's home, which has been the case where the rents are increasing rather dramatically each year. The mobile-home park owner may think that they have the right to up the rent because of the increase in land costs, but many of these mobile-home parks were established when interests rates were 11 to 15 percent. They covered their expenditures at that time. Now the interest rates are much lower, and I believe that that has not been taken into consideration. Therefore I appreciate what the minister is doing in this bill, but I would like to have seen it go a little further in terms of a difference between the long-term rental agreements and those of a short-term nature.
A. Cowie: I would like to speak about one general concern with this bill, because I think that anything you can do to secure better tenants' agreements with clear wording is a good thing, and this bill generally does that.
I would like to address the confusion that a lot of people have between manufactured homes and mobile homes. The manufactured home, of course, comes in many different forms. Components such as bathrooms, kitchens, walls and trusses, and that sort of thing, are put together on the site. That is quite common today. In fact, Canada -- especially B.C. -- exports a number of types of these homes to Japan and other countries. Technically speaking, even the log homes can be considered manufactured homes. They are built here and sent to Japan. The Panabode type of home is perhaps the best known. That has been manufactured in Richmond and sent to many countries for many years. The manufactured home, which I think has a tremendous future in this province, is an industry that we can be proud of.
Then there is the mobile home, which is really a trailer. It is usually on wheels, and quite often they go in trailer parks on trailer pads. These become almost permanent in many cases, and are not moved, but that depends on the type of trailer park and the agreements -- many of which have been mentioned here. Trailer parks or mobile-homes parks tend to not be terribly well designed. That has been the case in the past. I think that many of the problems have been because this has been considered a temporary type of accommodation when in fact people stay there for long periods of time. Also, many of these developments started as recreation developments in Penticton and other places. As land values go up, there is a tendency to replace them and put some type of permanent home in their place.
When talking about manufactured homes, some of us may recall that Expo 67 had manufactured homes. Moshe Safdie, the famous architect who's doing the library in Vancouver at this very moment, had concrete apartments that were stacked in the air. Those were manufactured homes. As far back as the 1920s, Buckminster Fuller, the famous architect, was designing manufactured homes to be stacked high in the sky. I think we're going to see a very complicated system as we move toward a very exciting period in the future when a large percentage of homes will be manufactured.
The main problem with this bill is the terminology and definitions. The bill should have concentrated on the type of mobile-home park that is in fact mobile -- the trailer park. As a planner in this province for over 20 years, I can tell you that hardly any municipalities or regional districts welcome mobile-home parks. Usually they resist them. In Delta, for instance, even though theoretically you can put in a mobile-home park, I defy anybody to do it. To my knowledge, no one has been able to do it on private or public property other than the Tsawwassen Indian band lands.
We should be very clear what we're talking about. As important as the agreements are over mobile-home parks, I think this government should take on the responsibility of perhaps defining the quality of these parks, which would help their acceptance in municipalities and regional districts. It would be very helpful if the mobile-home park owners stuck to having actual mobile-home parks, and manufactured-home developments would be elsewhere. I think they're clearly different. They're different types of homes, although you can mix them, as you can see quite easily if you drive over the Lions Gate Bridge and look down at the Indian reserve, where you'll see a mixture of permanent manufactured homes and mobile homes. What's gradually happening is that the mobile homes are moving to the back of the site near the highway, and the manufactured permanent homes are on foundations near the water, the better part of that site.
What we should be doing -- and what I hope will be the next step that the government takes in regard to manufactured and mobile homes -- is defining clearly what we're talking about. The problem is really in the mobile situation, not in the manufactured permanent home type of site, where you can get quite high densities today. Through clever and good design you can get up to six, seven, eight or nine units per acre. Many of those developments are really excellent. You'll
[ Page 8562 ]
see them down in the States, especially in the warmer climates such as Arizona, Texas and California. You'll also see mobile homes down there, of course. It's where Canadians disappear for the summer, some for six months or so. I may address more particular aspects of this during committee stage, but my concern is that we really haven't defined what we're talking about. We've been concerned more with tenants' rights, which I believe we should be concerned about, but we haven't really defined the type of home that we're talking about.
R. Chisholm: It gives me pleasure to rise to speak to this bill.
An Hon. Member: And to support it.
R. Chisholm: Yes, and to speak in support of it, as a matter of fact. It has its problems, but it's heading in the right direction. This minister has at least addressed a problem that this society has not addressed for a number of years. In my riding, for instance, there are a few manufactured-home parks. They have had problems with landlords, and they have had problems with damage deposits and increases in rent. Some of these increases have been atrocious; others have been reasonable. It is good that the minister has addressed this problem. I tend to think he hasn't gone far enough in certain areas, but in other areas he has done a fine job. For instance, going from 30 days to 15 days is a good move. And the moving of a manufactured home -- from six months to 12 months is a very good move.
But when it comes down to appeals after the arbitrator has made a decision, how do they enforce this? If the owner of the organization decides he is not going to comply with the wishes of the arbitrator, where is the appeal system? What authority is there, and where does the individual go? It still leaves the onus on the individual to run after the landlord, in some cases. This was a problem before, and it's still there, to some degree.
The other problem I see is the rental increase. We have addressed the problem with the mobile homes and the manufactured homes. But there are a lot of renters in apartments. It does not address the rental increases in those areas. If we talk about damage deposits, the damage can be more than the deposit. The same principle applies, but it has not applied to the apartment dwellers in our society. This is where the minister did not go far enough. I think these rules have to apply to all renters in British Columbia. We have to be very definitive about what area we are talking about or the rule has to apply to all areas where people are renting properties. This is one area where I think the minister should have gone a little further. In committee stage I hope to address this a little bit more.
As I said, my words this morning aren't going to be very long, because generally speaking, this is a good bill and it's heading in the right direction. In committee stage I hope to address some of the problems I have brought forward, and hopefully, the minister will bring forth amendments which will address problems such as apartment dwellers, the rentals they pay and the increases that they see from time to time. Maybe it will address the problem of the appeal and where a person goes after a judgment by the arbitrator with which the owner does not wish to comply. Hopefully, in committee stage the minister will address this. With those few words, hon. Speaker, I thank you for your indulgence.
K. Jones: It's a pleasure to rise and speak to Bill 67, the Residential Tenancy Amendment Act. I have mixed feelings about this bill. I have concern about the tenants in situations where they have run into difficulties with a landlord. I also speak from a landlord's standpoint; there are some difficulties in this bill that they are going to be faced with. I would like to support the concept that there is a need for some modifications to the existing bill. I think that some of the direction detailed here, particularly in the manufactured-home area, is justified and will provide a much happier situation in manufactured-home park facilities.
I am concerned about the arbitration and court procedures that are set out. Part-time landlords will have great difficulty with that. They are landlords in that they are owners of property, but that is not their major livelihood. They are providing a service with the idea of making some return in the future. They are not usually making it on a day-to-day basis, because in most cases the rents do not match the mortgage payments on the properties. Their only hope of getting a return in the future is if, as they hold that land and continue to pay taxes on it, its value increases.
The real problem for those people is the change to 15 days for the deposit requirement, and having to go to an arbitrator to defend a claim for the deposit against expenses incurred by the tenant's occupancy. For that person to make an appearance before the arbitrator or a court is going to mean a loss of wages. There is no recognition of that difficulty in this bill. Especially with the 15-day notice after the termination of that tenancy, there is hardly sufficient time to prepare. At the same time, the landlords are trying to get a new tenant onto the property and preparing a cost analysis of the damages. They have to get quotes from various suppliers in order to justify before an arbitrator the actual cost of the claim they are making. This claims process does not provide adequate opportunity for calculating and defending those costs.
[11:00]
The end result will be that the landlord will be stuck with taking the loss as part of their operating expenses, although they can't claim it as a business expense. They will just have to write it off. I see that as a serious situation in that a large number of low-cost and general rental housing is supplied by individuals who have one or two rental homes. They will just move out of that market because they can't afford to stay in it. It's a very serious problem and will make the availability of rental accommodation even more difficult. There will be a decided reluctance of new people to move into that field. I am sure that a lot of the people presently in the field will be selling their homes and moving out of it.
A double whammy is involved in this. They would have to take a day off work to attend the arbitration and take a loss of pay for that day's work. They also take the
[ Page 8563 ]
risk of not getting a satisfactory arbitration, which would mean that they would not receive the deposit money that they claimed. I know that a provision in the arbitration process calls upon the tenant to make restitution of additional funds. Having gone through that process myself, I think it's totally stacked against landlords. The opportunity for a landlord to collect from a tenant after a judgment by an arbitrator or the small claims court process is almost nil. The tenants refuse to pay; they claim inability to pay, or they just ignore payment. The result is that over a long, protracted process, if you follow the various steps of the arbitration and the court procedures, there is no return of the money that is expended as a result of damage done above and beyond the damage deposit put forward by the tenant. That money is literally uncollectable. There is no way that that uncollectable money can be shown as a business expense.
It's a very difficult situation. More and more people who are presently providing or have lately provided residential tenancies to people have decided that they cannot afford to be in that business any longer. This type of legislation further confirms the difficulty and probably confirms the decision on their part to sell their property, letting it go to a permanent home purchase that will take it off the market as far as the residents are concerned -- the tenants will no longer have the opportunity to rent that house.
I've spent the last 14 years as a landlord and I am aware of the difficulties they have. Previous to that, I have also been a tenant and rented for many years, so I do have experience of both sides of this issue. I think this bill needs to be looked at seriously, and we will bring further concerns on a clause-by-clause basis as we get into committee stage. At present there appears to be a serious flaw here in the concept put forward by the minister in regard to the deposits required for potential damage.
If you have a good tenant, you have no problem. But you do have bad tenants. The odds are that in one out of roughly three or four tenancies you're going to have difficulty. The tenant may fail to pay the rent. The tenant may leave the premises in the middle of the night without notice. The tenant may damage the property to such an extent, such as by having pets in the residence, that you may have to take all the carpeting out. You may have to scrub the place down with bleach. You may have to have the walls completely cleaned and repainted. You may have to put new flooring in, new carpeting and all of that. From my own experience in a small house, just that one aspect of damage has amounted to over $2,000 -- almost $2,500. That money was not collectable through this process, because if you went to arbitration and the judgment was made, the people ignored the judgment. If you go to court to follow up the judgment, and the small claims court makes a judgment of so many dollars on a monthly basis, the people don't make the payments. You take them back to the court, because that's the only process you have, and they make an agreement before the judge that they will pay an even lesser amount. Then when you go to get payment, they again don't pay. You go back to the courts again, the judge gives an even lower amount, and the next time you go to get the payment, they still refuse to pay. This situation gets to the point where the landlord just throws up his hands and says: "It's not worth my while proceeding; it's costing me more money to go to court to try to get a decision, and each time I go to court I get a lesser amount in judgment." You are going to a zero end result. This is not a satisfactory arrangement.
The minister should have a good, serious talk with the people who are landlords -- not big corporate landlords, who are probably the people he may have had some advice from, but the people who have one or two homes and have the difficulty of not being able to have lawyers and maintenance people; they do the administration, maintenance, repair and advertising all by themselves. Those people are really going to be hurt more seriously by this bill than anyone else. I predict that those people will pull out of the rental market completely as a result of the decision to impose more restrictions upon them.
C. Serwa: It's a pleasure to rise and speak to the Residential Tenancy Amendment Act. First of all, I would like to compliment the minister for bringing it forward and the hon. member for Malahat-Juan de Fuca for his commitment and effort with respect to this particular legislation.
It's certainly a very important piece of legislation -- no question about it. It's most important in my constituency of Okanagan South, because probably at least 15,000 people in the central Okanagan region live in manufactured-home parks. It's of vital concern. It's an additional concern that the majority of these individuals are seniors on fixed incomes. There's a great deal of concern, not only about the uncertainty with respect to pad rentals but also about the uncertainty that often occurs about the security of tenancy. We're recognizing that you build up a community over a period of time. If the community is broken up in one way or another because of property values and the change in development, it tends to break up the interrelationships, the support systems and the care -- as if it were a small city, for example.
One of the major problems that was not addressed here is probably part and parcel of the NIMBY syndrome and also of the legacy of the individuals who lived in travel trailers in the 1940s or that very early period of time. Manufactured homes are a considerable investment on the part of the homeowner at the present time, and certainly in all areas they represent a fairly high standard of affordable housing. But the resistance from society generally is evidenced in municipalities and regional districts having great difficulty rezoning land for manufactured-home parks. This is one challenge that has not been surmounted, and I think this is something that the provincial government has to look at to find ways of encouraging the rezoning of land, so that there is a competitive marketplace. A lot of what we see here is the result of the lack of a competitive marketplace, and the checks and balances that are inherent in the free market system are not available simply because of the dearth of available pads. Then we try through legislation and regulation to
[ Page 8564 ]
perhaps provide the necessary comfort and protection that would have been provided automatically if the free market system had been allowed to work. What we're faced with in the central Okanagan is that new developments will not take older mobile homes; consequently, substantial capital investment is almost nullified.
[11:15]
There are a number of areas, and one of the potential areas -- and I've spoken with the hon. member for Malahat-Juan de Fuca -- is that we recognize that the provincial government works in concert with the federal government in subsidized rental housing, for example. It seems to me that a similar program should be made available so that non-profit societies or groups that want to establish a mobile-home park should have access to that type of financing. When you're looking at affordable housing, if there was a combination of will on the part of the federal government and provincial governments, I think that accommodations could be made to provide more and more affordable pads for these individuals. They could be on a rental basis, a strata title basis or a fee simple basis, all within the same park, depending on the individual's will and their long-term intentions. But it seems that part of the problem we're running into is the lack of an appropriate competitive situation.
I was comforted to hear the words from the member for Malahat-Juan de Fuca this morning with respect to manufactured-home parks on band land. On the west side of Okanagan Lake there are probably 5,000 to 7,000 people living in manufactured-home parks on band land. One of the major concerns in the application of Bill 67, the Residential Tenancy Amendment Act, is its influence on manufactured-home parks on band land. It is not clear to me how the negotiation process will in fact enable the Residential Tenancy Act to be applicable to manufactured-home sites on band land. However, it is imperative that all British Columbians be treated equally under British Columbia legislation. Some sort of mechanism has to be found by mutual agreement among the various bands that have mobile-home parks on their land, the Minister of Labour and Consumer Services and perhaps the Minister of Aboriginal Affairs to ensure that the individuals on band land are offered the same set of standards and protections as British Columbia citizens are afforded through this particular package of legislation on other private development sites throughout the province.
There are some other factors that are unique to mobile-home or manufactured-home owners on band land. There is the native taxation situation. Again, in the central Okanagan the minimum tax this year -- rather than being equivalent to the provincial minimum, which is presently set at $100 -- has been raised by an additional $75 in the current year, and will be increased in the next year by an additional $75. Therein is my concern: the lack of an equitable basis or foundation of treating all British Columbians the same. We will have a minimum tax of $250, for example, on the Westbank band lands, whereas other British Columbians will be faced with a minimum of $100. Again, the Minister of Labour and Consumer Services, and perhaps the Minister of Aboriginal Affairs, have to be part and parcel of ensuring that negotiations and adjustments that are made are fair to the bands and the non-native residents on band lands.
All in all, I support the philosophy and principles in this bill. That's not to say that I don't have concerns and reservations, because fundamentally when we get into the area of rent controls, there is the strong potential for drying up investment capital and decreasing the competitive nature of those pads. That works against the opportunity for affordable housing for individuals. On native taxation, the hon. member for Saanich North and the Islands points out that in his case some individuals are paying a minimum of $500. That is clearly a challenge that the Minister of Labour and Consumer Services and the government of the day are going to have to look forward to, so that there is a transfer of taxation revenue to bands, as there is to other municipalities to provide the infrastructure. I think that it is probably not necessary to say, but I will, to reinforce that fairness and balance have to be attained for all British Columbians. So when we look at the capital costs for sewers and water systems, the revenue-sharing grants are going to have to be made available to bands, as they are to regional districts and municipalities in British Columbia. An extension of that is that they also have to be made available to irrigation districts, which are responsible for providing a substantial amount of the domestic water supply in the central Okanagan and through many other parts of the province.
There are a number of concerns that we will address on this, probably in committee, to ensure that the concerns of the residents of manufactured-home parks have been objectively met. There are concerns to make certain that capital investment will continue to be directed to provide more pad space and more opportunity for affordable housing that is cost-effective to the province and to the seniors or the young people just starting out, or to families living in manufactured homes. We all recognize the cost-effectiveness of that type of manufacture in a production-line process, rather than building the normal stick home on a subdivision lot.
With that, I think I have aired the majority of my concerns. I am in support of this much-needed legislation and in strong support of the additional security. But again, I want to emphasize that it is necessary and important that fairness and balance always be maintained, so that it is fair for the resident as well as the mobile-home owner. It must encourage an obvious sense of fairness and balance in order to ensure added investment to provide this much-needed, affordable housing opportunity for people in British Columbia.
L. Fox: I am pleased to stand and speak on Bill 67, the Residential Tenancy Amendment Act, 1993. When I look through the act and I look around the province, there are two considerations within this act that I can certainly appreciate and support.
Let me speak first on the trailer-pad issue. As I look at the rising costs of housing and land in many areas of
[ Page 8565 ]
the province, there is no question in my mind that more and more people are going to turn to mobile homes as an affordable way to own their own home. So I see this issue becoming more rather than less of a focus in the future. I am aware that rental controls have generally not worked, but I am also aware of one community where there are three mobile-home parks owned by the same individual. Each year, that individual has had the opportunity to raise those pad rentals at his whim or desire, not necessarily based on the costs of taxes or of the improvements to the park, but on profitability. Perhaps because he has a monopoly in that community, he may not at all times have considered what was in the best interests of those mobile-home owners. But when I look at the bill and I see that the manufactured-home park owner will have the opportunity to argue for his increases before an arbitrator, those people renting will have the opportunity to balance that approach.
I only hope that that consideration will be given to two factors in the process. We want to be very careful that we don't put a mechanism in place that will enhance the promotion of mobile-home park ghettos. In fact, if we take away from the incentive for a trailer park to improve or to make a profit, we also take away the incentive to keep a trailer well maintained and looking good by improving them with such things as flower-beds or paved driveways. That is a concern I have with this type of legislation. That could happen if we're not careful about the way the arbitrator views the interests of the park as a whole.
When we look at the tax assessment of a park, it is based on an income approach, which covers all of the land base. The assessment of the mobile-home owner, who rents the pad, is based on his particular facility. As a park is improved in a way that generates more revenue, the owner is impacted by the assessment and therefore pays more taxes. I think we have to be very careful about how we administer this particular provision. I recognize that there's a need, but we should be very careful, or we will end up with mobile-home park ghettos. That is a concern, because I have seen that kind of situation in many small communities. It's unfortunate, and I don't believe we want to do that.
When we look at the actual apartment rental process, the fact that we're going to have consistency in the forms is a good way to go. More and more, as people move from one apartment block to another, they will be able to understand the forms and what their responsibilities are as a tenant, and the landlord will more clearly understand his rights.
There's one section of the act that I think the minister should consider very carefully, and perhaps even consider an amendment to. That is section 6(16)(12), which says if....
The Speaker: Order, hon. member. We are in second reading, and you are moving a motion to amend the section.
L. Fox: I'm not; I didn't.
The Speaker: You were just referring to it as a possibility for later. It would be inappropriate to have a motion on the section at this point. Proceed, hon. member.
L. Fox: Thank you, hon. Speaker. I suggested that the minister may want to look at this section, and for his information I was going to explain my concern.
This section suggests that if, after the end of a tenancy agreement, the landlord is unable to locate the tenant, any money owed to the tenant under this section is deemed to be held in trust by the landlord for the tenant for two years following the end of the tenancy agreement. The reason that I suggest that the minister and his staff should look carefully at this section with the idea of amending it is that many individuals, when they leave an apartment because they have damaged it or they've not paid the rent -- or whatever the issue is -- and when they have not complied with the agreement to rent, will invariably leave no forwarding address. They will be very difficult to find because they know there's a liability to them if that apartment owner is able to locate them.
[11:30]
So I believe that this section should read something along the lines that -- and I give this advice to the minister -- if there has been a reasonable attempt to locate the tenant in order to settle the issue of his deposit, then within a certain time frame that particular deposit should be forfeited to the landlord. I know that if somebody owes me money or has damaged my property, the last person they're going to contact is me. I believe that in this instance we should put more onus on the tenant and less on the landlord than this act does, because I don't believe the landlord's rights are looked after by that clause. This legislation is trying to look after both parties' rights, and there should be a balance. This particular clause does not have that balance.
With those few remarks, hon. Speaker, I move adjournment of this debate until the next sitting of the House.
Motion approved.
Hon. M. Sihota: I call committee on Bill 21.
CONSUMER PROTECTION STATUTES AMENDMENT ACT, 1993
(continued)
The House in committee on Bill 21; E. Barnes in the chair.
On section 3.
Hon. M. Sihota: I believe we stood down section 3, so let me recall section 3 first. Members may recall that when it was stood down, the issue was to determine whether real estate and motor vehicles, where the contract was signed on reserve or in a direct sale, are within the definition of the act. Section 3 gave consumers a year to cancel a contract with a direct seller. It's not a licence. The answer, in brief, is that real property does not qualify as goods and services as
[ Page 8566 ]
referred to in the definition. Hon. members may recall that we had an extensive debate as to whether or not it was covered by the legislation. We have now received that legal opinion.
The sale of a motor vehicle, where the contract was signed on a reserve, would qualify as a direct sale if that manner is in the dealer's ordinary course of business. The recommendation I have from staff -- and I might as well put it on the record -- is that we may wish to exempt motor dealers by regulation. That's something the government is prepared to consider. I believe these matters have been canvassed with the opposition. But in any event, those were the responses to that section.
Section 3 approved.
On section 5 as amended.
Hon. M. Sihota: I have an amendment to section 5 as amended.
[SECTION 5,
(a) by deleting the proposed section 25.51 (4) and substituting the following:
(4) The registrar shall ensure that any record or inventory removed under subsection (3) is kept safe and secure until its return and shall establish procedures for achieving that safety and security., and
(b) by deleting the proposed section 25.8 and substituting the following:
Change in firm requires prior approval
25.8 (1) A licensee shall obtain the registrar's prior approval,
(a) if the licensee is a partnership, to a change in partners, or
(b) if the licensee is a corporation, to a change in the directors or officers
where the proposed partner, director or officer would be an associate as defined in section 25.4(1).
(2) The registrar shall have no more than 14 days after receipt of a request for an approval under subsection (1) to approve or refuse a change if the proposed partner, director or officer has continuously been a resident of British Columbia during the 12 months preceding the registrar's receipt of the request.
(3) The registrar may refuse approval under subsection (1) for the same reasons for which the registrar may refuse a licence under section 25.4.
(4) A licensee who has been refused approval may appeal the refusal to the commission.
(5) Despite section 12 of the Commercial Appeals Commission Act, a decision of the registrar under this section is not stayed pending an appeal to the commission.]
The Chair: We have dealt with section 5. Is leave granted to recanvass section 5?
L. Hanson: Are the amendments to section 5 on the order paper? I haven't seen them yet.
Hon. M. Sihota: Let me just say this, because I am a little confused here. The member for Fort Langley-Aldergrove proposed an amendment to section 5, which we accepted. On subsequent review with legislative counsel, there were a few drafting problems with that provision. We have shared that with the hon. member, and I thought we had also shared it with the member from the Social Credit Party. I believe staff talked to members of that party. I have the amendment here. I thought it had cleared. It deals with cleaning up the language in terms of obtaining the registrar's prior approval.
With that said, I'd be happy to move the amendment, which I have here with me, as it relates to section 5, and to share it with the hon. member.
Amendment approved.
Section 5 as amended approved.
On section 15.
Hon. M. Sihota: The hon. member for Okanagan-Vernon, I believe, had proposed an amendment with regard to section 15. We've had the opportunity to review it and to discuss it with the hon. member, and the following amendment has been shared with the member. I move that section 15 be amended by adding the following definition to section 1 of the Motor Dealer Act: "claim" means an application for compensation from the fund for a loss arising from a transaction by a motor dealer involving the disposition of a motor vehicle.
Amendment approved.
Section 15 as amended approved.
Hon. M. Sihota: I move the committee rise and report the bill complete with amendments.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 21, Consumer Protection Statutes Amendment Act, 1993, reported complete with amendments to be considered at the next sitting of the House after today.
Hon. M. Sihota: I call second reading of Bill 67.
RESIDENTIAL TENANCY AMENDMENT ACT, 1993
(continued)
Hon. M. Sihota: Let me make a few comments in response to the comments made by hon. members. I am appreciative of the comments that were made by all hon. members and of the support that comes from them with regard to this legislation. On behalf of the member for Malahat-Juan de Fuca and myself, I wish to thank all parties for their assistance in the development of this legislation, which was long overdue.
[ Page 8567 ]
In wrapping up the debate, let me say that not only was this legislation long overdue, it also attends to a significant need in society. Residents of manufactured-home parks desperately need the protection afforded to them under this legislation, particularly with regard to problems relating to rent review and the vulnerability that many feel when they acquire a manufactured home, have it placed on land, have no other place to move and yet can be faced with significant increases in rent.
I know that this legislation will go a long way to solving the problems of those who reside on non-native land. However, there are a number of residents -- including some in my own constituency, on the Songhees lands -- residing on native lands, and more work needs to be done. Government is trying to move, in the resolution of those issues, on a number of fronts -- first of all, on a provincial basis, with the work that the Minister of Aboriginal Affairs is doing in terms of some of the broad discussions we are having with native organizations around the province. Particularly in relation to situations such as this, we believe that in the intermediate term -- if I can put it that way -- we should be able to resolve this issue as it relates to the concerns of natives and non-natives who live on those lands.
In any event, in the immediate term, residents who live on native lands are subject to rent increases. Just yesterday I met with representatives of the Songhees park in my riding, the Westview Park on Coopers Road, to discuss their concerns regarding the rent increase notices they face. I've also had occasion to meet with representatives of native groups from those lands. The approach that the Songhees nation has taken on this issue typifies another approach which hon. members may wish to take with native organizations in their constituencies. Pending a resolution of this issue on a broader basis through provincial negotiations, I think that bands are going to be agreeable to accepting this legislation on a band-by-band basis. I would encourage all MLAs to work with individual bands in this regard. I know that there may be variations of this legislation accepted by bands. I think that there's room for progress in those areas. I would hope that all members of the House, on behalf of the work that they do for their constituents, will take it upon themselves to approach individual bands and seek a voluntary application of this legislation to those lands.
That would lift any legal uncertainty. Of course, those who reside in manufactured-home parks on native land can always take issue with this matter in the courts. That is a last resort and an expensive one, but I would not want to concede in this House that this government has conceded the applicability of this legislation to native lands. Indeed, should the matter be litigated, it may well be that the courts would look at previous determinations and agree that, given the wrong that it seeks to remedy, this legislation would apply. I would hope that we can solve these issues short of that.
[11:45]
Of course, members raised other issues, particularly about administration. We will canvass those during third reading debate. I also look forward to debate in third reading on the problems and pitfalls that may lie in reversing the onus regarding security deposits onto landlords. With that said, I move second reading.
Motion approved.
Bill 67, Residential Tenancy Amendment Act, 1993, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. M. Sihota: Given the remarkable progress this morning, I wish to advise all hon. members that the House will sit tomorrow commencing at 2 p.m.
Hon. M. Sihota moved adjournment of the House.
Motion approved.
The House adjourned at 11:46 a.m.
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