Landlords and property managers in New Brunswick, facing a 3.8% limit on rent increases for 2022, are discussing potential ways to escape the limit.
Ideas include asking tenants to personally agree to higher rents, introducing fixed-term leases that force tenants to continue when they expire, and offering repairs to rental-controlled units significant enough to require tenants. to leave, whether the repairs are going according to plan or not.
In an online interview posted to YouTube earlier this month by the Moncton Real Estate Investing Organization, more than two dozen homeowners and managers heard a discussion about ways to circumvent rental restrictions, an exercise the government believes is aware of.
“They know what landlords are trying to do. They know the loopholes we’re trying to find,” Monkton property manager Tony LeBlanc, who led much of the discussion, told the 77-minute online forum.
“Will they start closing them down eventually? I wouldn’t be surprised. When politicians play, we just don’t know what the final game is.”
New Brunswick Services Minister Mary Wilson has introduced rent limitation legislation of 3.8% for 2022. It will be reviewed and discussed by the MLA following a re-meeting of the legislature on May 10. (Jacques Poitras / CBC News)
The provincial budget has revealed plans for a rent ceiling
In its March 22 budget, the Blaine Higgs government announced plans to curb rents.
This was followed by a series of high-profile rental property incidents that were sold to investors and tenants were asked to pay 20, 40 and even 90 percent more for their apartments.
“We have heard the concerns of tenants and are introducing more measures to help alleviate the pressure they are facing,” said New Brunswick Services Secretary Mary Wilson, who is in charge of landlords and tenants.
Legislation has since been introduced to apply a one-year limit of 3.8% on rent increases, with retroactive effect until 1 January, along with other measures to prevent certain types of evictions.
“The changes we are introducing to temporarily limit rent increases and tighten regulations to terminate rents will further help tenants face rising rents, higher costs and low unemployment,” Wilson said.
The proposed changes overturned the plans of many apartment owners to increase rents, especially those who recently bought buildings in New Brunswick at first-class prices or renovated buildings in anticipation of being able to attract higher-paying tenants.
WATCH The landlord asks to evict tenants for “major” repairs
“Once they go out, they’re out”: NB landlords discuss evicting tenants to make repairs
A group of landlords and property managers in Moncton held a virtual meeting to discuss the proposed limitation on rents in the province. 1:08
Plans to explain the situation directly to tenants
LeBlanc said at the meeting in Moncton that he has a client who recently bought a six-block building and then spent $ 150,000 on improvements.
He said he planned to ask tenants directly, on behalf of the landlord, to agree to more than 3.8 percent increases because of this.
“She says, oh my God, what should I do?” LeBlanc said of the building’s owner.
“We literally go and sit at the kitchen table with each of these tenants and explain the situation and say, listen, you know we’ve done all these repairs. And I suspect it will go well. I think we’ll be fine. “
This strategy has already been tested in the countryside.
Last month, tenants in Hampton received notice of eviction from a new landlord after they voluntarily refused to agree to a 29 percent and 43 percent increase in rent. The owner said the rents will be turned into vacations.
Peter Jongenilen of ACORN NB says that if landlords are working on measures to circumvent rental ceilings, the province must limit loopholes in the legislation. (Pierre Fournier / Radio Canada)
Peter Jongenilen of the New Brunswick branch of the Association of Public Reform Organizations Now (ACORN) advises tenants not to pay more rent than required by law.
He says that if a landlord makes a bad decision to invest in a rental property, the tenants should not be the ones to pay for it.
“It’s not the tenant’s fault,” he said.
“It’s the fault of the one who bought the building.
Ways to relocate existing tenants are discussed
The proposed rental ceiling applies to existing tenants rather than new tenants, and much of the discussion among Moncton investors has included the options available for relocating those currently under the protection of rent controls.
Signing tenants of fixed-term leases that expire on a specific date and require the tenant to relocate was a suggestion.
Making plans for large-scale apartment renovations, even if the work is not as big as claimed, was different.
Currently, the proposed changes in legislation will allow tenants to be evicted in limited circumstances, including if significant repairs are undertaken “to the extent that free ownership is necessary to carry out the repairs”.
The province has not defined exactly what this means, but LeBlanc said he was told that repairs for a week or two would not qualify for eviction, while something longer than two months could.
He suggested developing a renewal plan that shows the scope of the work to be done, with a timetable and for the Housing Tribunal to agree that eviction is needed.
“And what if it ends sooner than we expected?” One participant asked.
“If they say ‘yes’ that you can evict him or get him out at the right time, you could end the project a week later, as far as I’m concerned,” LeBlanc said. “The tenant is outside and the tenant is out of the picture.”
Moncton property manager Tony LeBlanc, who leads most of the online discussion, said he has a client who recently bought a six-block building and spent $ 150,000 on renovations. He said he planned to ask tenants directly on behalf of the landlord to agree to the 3.8 per cent increase. ()
Landlords warned to avoid “scams”
But LeBlanc also warned landlords to be careful not to be “caught in any jokes” in any interactions with tenants, as fines have been imposed for violating the rules.
“We are all good to be creative, but to be creative in the right way and not try to circumvent the established rules,” he said.
None of the three central organizers of the roundtable, including LeBlanc, returned reports from the CBC requesting an interview for the meeting.
However, Jongeneelen said the tenant should never be exported for repairs without first talking to the Housing Tribunal.
He noted that as landlords are openly looking for ways to circumvent the rent ceiling, the province needs to write strict enough rules to prevent this.
“In addition, we would like to see the government provide some education to tenants to understand the new rules to stop all unscrupulous landlords from enticing tenants to vacate their homes,” he said.
Legislation on rent ceilings is scheduled to be reviewed and discussed by the MLA after the legislature resumed the meeting on 10 May.
Add Comment