Ideas include asking tenants personally to agree to higher rents, introducing fixed-term leases that force tenants to move after their expiration, and proposing renovations to rent-controlled units large enough to require tenants to abandon, whether the renovations were carried out as planned or not.
In an online talk posted on YouTube earlier this month by the Moncton Real Estate Investment Agency, more than 22 apartment owners and managers heard a discussion about ways to circumvent rents, an exercise they believe the government knows.
“They know what the owners are trying to do. They know the gaps we are trying to find,” said Moncton real estate manager Tony LeBlanc, who led much of the discussion during the 77-minute online forum.
“Will they finally start closing them? I will not be surprised. When politicians play, we just do not know what the final game is.”
New Brunswick Service Secretary Mary Wilson has introduced legislation to raise the rent ceiling to 3.8 percent for 2022. It will be reviewed and debated by lawmakers after the May 10 legislature meeting. (Jacques Poitras / CBC News)
The provincial budget revealed plans for a rent ceiling
In its March 22 budget, the Blaine Higgs government announced plans to limit rent increases.
This was followed by a series of high-profile incidents with rental properties being sold to investors and tenants being asked to pay 20, 40 and even 90 percent more for their apartments.
“We are listening to the concerns of tenants and are taking more action to help alleviate the pressures they face,” said Mary Wilson, Minister of Service New Brunswick, who is responsible for landlords and tenants.
Legislation has since been introduced to implement a one-year limit of 3.8 per cent on rent increases, with retroactive effect from 1 January, along with other measures to prevent certain types of evictions.
“The changes we are making to temporarily limit rent increases and tighten lease termination regulations will further help tenants who face rising rents, rising costs and low job vacancy rates,” Wilson said.
The proposed changes have overturned plans by many apartment owners to increase rents, especially those who recently bought New Brunswick buildings at premium rates or renovated buildings in the hope that they would be able to attract higher-paying tenants.
CLOCKS The landlord asks for eviction of tenants for “major” renovations
“Once they’re out, they’re out”: NB landlords discuss evicting tenants for renovations
A group of Moncton landlords and property managers held a virtual meeting to discuss the county’s proposed rental ceiling. 1:08
Plans to explain the situation directly to tenants
LeBlanc told the Moncton meeting that he has a client who recently bought a six-unit building and then spent $ 150,000 on upgrades.
He said he plans to ask tenants directly, on behalf of the landlord, to agree to increases of more than 3.8 per cent because of this.
“It’s like, oh my God, what am I going to do?” said LeBlanc about the owner of the building.
“We literally go and sit at the kitchen table with all these tenants and explain the situation and say, ‘Listen, you know we’ve done all these renovations. And I suspect it will go well. I think we’ll be fine.’
This strategy has already been tested in the province.
Last month, tenants in Hampton received eviction notices from a new landlord after they refused to voluntarily agree to a 29- and 43-percent increase in rents. The landlord said the rents would be converted into vacation rentals.
ACORN NB’s Peter Jongeneelen says if landlords are working on measures to circumvent rent ceilings, the county needs to close gaps in legislation. (Pierre Fournier / Radio Canada)
Peter Jongeneelen of the New Brunswick chapter of the Association of Community Organizations for Reform Now (ACORN) advises tenants not to pay more rent than the law requires.
He says if a landlord made a bad investment decision on a rental property, the tenants should not be the ones to pay for it.
“It’s not the tenant’s fault,” he said.
“This is the fault of the one who bought the building.”
Ways to get rid of existing tenants were discussed
The proposed rental ceiling applies to existing tenants rather than new tenants, and much of the discussion among Moncton investors has been about available routes for moving those currently under rent control protection.
The tenants’ signature on fixed-term leases that expire on a specified date and require the tenant to relocate was a suggestion.
Making plans for extensive apartment renovations, even if the work is not as important as he claims, was another matter.
Currently, the proposed changes to the legislation will allow tenants to be evicted under limited circumstances, including undergoing major renovations “to the extent that a permit is required to carry out the renovations”.
The county has not determined exactly what that means, but LeBlanc said he was told a one-week or two-year renovation would not qualify for eviction, while just over two months would qualify.
He proposed the development of a renovation plan showing the scope of work to be done, with a timetable, and asking the Housing Tribunal to agree that eviction was required.
“What if it ends earlier than we expected?” asked one participant.
“If they say yes, you can fire him or take him out at the appointed time, you could finish the project a week later, as far as I’m concerned,” LeBlanc said. “The tenant is out and the tenant is out of the picture.”
Moncton real estate manager Tony LeBlanc, who led most of the online discussion, said he has a client who recently bought a six-unit building and spent $ 150,000 on upgrades. He said he plans to ask tenants directly on behalf of the landlord to agree to increases of more than 3.8 per cent. ()
Owners warned to avoid “monitoring”
However, Leblanc also warned landlords to be careful not to “get into trouble” in any interactions with tenants, as fines have been imposed for breaking the rules.
“We are all good at being creative, but being creative in the right way and not trying to circumvent the rules that have been set,” he said.
None of the three main organizers of the roundtable discussion, including LeBlanc, returned messages to the CBC requesting an interview for the meeting.
However, Jongeneelen said a tenant should never leave for renovation without first speaking to the Residential Tenancies Tribunal.
He noted that because landlords are openly looking for ways to bypass the rent ceiling, the county needs to write strict enough rules to prevent this.
“We would also like to see the government provide some kind of tenant training to understand the new rules, to stop any rogue landlords from tricking tenants into evacuating units,” he said.
The legislation on the rent ceiling is scheduled to be reviewed and discussed by the MLA after the resumption of the legislature meeting on May 10th.
