Landlording Advice - Penalty Enforcement

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Landlording Problems - Penalty Enforcement

Q: I am a landlord. I've rented out my house in North Vancouver starting July 2005 for a 1-year lease term, using a standard RTO-1 form and having hired a property manager as I left town for a long time. In the end of September my property manager informed me that the tenant has lost his job and is giving me a 30 day notice and is going to leave at the end of October. I asked my manager to start advertising the property to find new tenants asap. MY QUESTION: What action can I take to reduce my new unexpected expenses (advertising, cleaning out the house, etc.) in connection with tenants' breach of contract? After re-reading the RTO lease agreement I found it hard to believe that there are absolutely no possible penalties spelled out for tenants ending the lease early... :( Should go for arbitration? To court? My manager seems to have no opinion on that.... Please, help... Thank you very much!
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.


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