In one of its decisions, the British Columbia Residential Tenancies Branch (RTB) authorized two landlords to increase their tenants' rents by 23.5% over two years, up from the 3.5% authorized for 2024.
there RTBResponsible for resolving disputes between tenants and landlords, it justifies its decision by explaining that, in this particular case, the landlords proved their current financial situation was unviable following an increase in mortgage interest rates.
I believe that the global and economic events that have occurred in response to the pandemic were not reasonably foreseeable and have had an impact on landlords.
We can read in the decision. A significant increase in mortgage interest rates has occurred due to unforeseen events.
This decision was announced last May (new window) (in English) and allowed landlords to increase the rent of four units by 2024 by nearly seven times the province-mandated annual limit of 3.5%.
there RTB The tenants and owners have not been named to protect their identities.
According to the decision, the owners bought their first rental property, a fourplex, in October 2021. Units in the building are two-bedroom, one-bathroom apartments, and utilities are included in tenants' rent.
Before the ruling, tenants paid between $1,282 and $1,550 a month.
In April 2023, the landlords asked the tenants of four units if they would accept a rent increase of $500 per month, an offer the tenants rejected.
Some offered employers a $50 raise, but employers did not respond to the request.
According to court documents, the homeowners had a variable mortgage interest rate of 1.9 percent, which had been stable for months until suddenly increasing. As of July 2023, the mortgage interest rate has increased to 6.65%.
According to court documents, financing costs for the property rose to about $80,000 that year; A sharp increase from the previous year's financing costs of approximately $46,000.
In 2023, according to Statistics Canada, there were 107,266 potential long-term housing units (LLTPs) used as short-term rentals in the country. British Columbia has the highest percentage of LLTP compared to rental apartments.
Photo: Radio-Canada / Josh Crabb/CBC
According to the documents of RTBSome tenants argue that the property is an investment and ask how it can be considered a loss, When owners walk away with a million dollar home
.
With an adjustable rate mortgage, the rate can reasonably be expected to change. Employers must engage in this type of financing by providing room for maneuver to absorb rate variability.
Supported tenants.
However, the RTB Ultimately found that the employers had proved that they would have suffered financial loss on the balance of probabilities.
They requested a total rent increase of 23.5% in one year RTB confirmed the increase Essential in a journey
Instead, they asked to increase the rent for two years.
This is a rare decision
said Hunter Boucher, vice-president of the British Columbia Homeowners Association (Landlord BC), But the case highlights the problems facing landlords who want to provide rental housing
.
Instead of opting for a fixed rate, landlords allow the variable rate to rise and basically ask tenants to pick up the tab.
Aissa Agouane, an activist for tenants' rights, believes in her.
Government response
Housing Minister Ravi Kahlon recently defended the government's initiatives, saying regional initiatives to support affordable housing are working. (archive photo)
Photo: Radio-Canada / Ben Nelms
The policy to allow this type of extraordinary rent increase due to funding is an old policy of the previous government, and this is the first time we have granted this type of request since we started collecting data in 2021.
Provincial Housing Minister Ravi Kahlon announced on his part.
I know people have a lot of questions and I have asked staff to review this policy and its impact on tenants in the current climate.
So the Ministry of Housing will consider the mechanism of further increase in rent for other expenses and its effect on tenants under Section 43 of the Residential Tenancies Act.
The Ministry also reminds RTB An independent tribunal and its decisions cannot be overturned by government review.
If the parties believe that the decision is grossly unreasonable, they may apply to the Supreme Court of British Columbia for judicial review of the decision.
With information from Anaïs Elboujdaïni and the CBC
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