| A: Penalty clauses aren't enforceable in residential tenancy agreements because the Residential Tenancy Act of BC only contemplates claims for debt and damages. A penalty isn't a debt and it isn't a damage; rather, it is considered to be an instrument put in place to insure that the promise (the tenancy agreement) is not broken. The courts hold that the promisee should receive by way of damages only that sum which would compensate for his actual and proven loss.
Liquidated damages, on the other hand, are enforceable, as long as they aren't determined to be unreasonable or unconscionable. Your property manager should be able to advise you further on this. As well, your property manager should be informed about what options the property owner has in situatuions such as you describe, and if she doesn't know or doesn't have an opinion, I'd seriously look for someone who does. |
