A Halifax tenant is calling for more restrictions around the use of fixed-term leases after hers wasn’t renewed – a decision the rental company said was necessary based on its “overall business strategy.”
Sarah Mosher and her wife have been living in a one-bedroom apartment in a small multi-unit complex on Oxford Street for more than five years, but they will soon have to move after their landlord decided to end their fixed-term lease.
“They had no complaints…. We’ve been good tenants the whole time,” Mosher said. “It’s mainly, I believe, because they want to raise the rent more than five per cent.”
Unlike periodic leases – such as month-to-month or year-to-year – fixed-term leases have fixed start and end dates, meaning they are not automatically renewed.
Critics have decried fixed-term leases as a “loophole” for landlords to get around the province’s five per cent rent cap, as rent increases do not apply to new tenants.
On March 11, Mosher’s property manager, Janet Mullins of BGI Properties, emailed her to say that her fixed-term lease wasn’t being renewed, and would end at noon on Aug. 31.
Mosher responded, asking why her lease isn’t being renewed.
“We didn’t come to the decision lightly,” Mullins replied, “but after taking everything into consideration, it was necessary based on our overall business strategy and needing to make tough decisions that align with our long-term goals and objectives. Unfortunately, this means not renewing the Lease.”
Mosher currently pays $910 a month for the space and says the rent will be hiked to $1,300 or more come September.
She doesn’t believe the unit is worth that much, even with Halifax’s competitive rental market. The building is old, the unit is small and the heat is always “blaring.” She said the only way she can control the temperature is by opening and closing the window.
“We’ve been putting up with it because the rent was low and there’s nowhere else that is competitive,” Mosher said.
Despite the city’s notoriously tight rental market, Mosher and her wife were able to find somewhere else to live – a slightly larger space for double what they’re currently paying.
“It’s going to be a change of lifestyle, for sure,” Mosher said.
The issue now is that their new lease starts in May, as the couple wanted to find a place as soon as possible and not take their chances when students return in September.
However, BGI won’t let them end their current lease early, so they now have to find a sublet to take over from May until the end of August. Mosher also has to pay a $75 administration fee to do so.
“You’re telling me to get out, and then you’re telling me, ‘You have to get out on this specific date. We’re not going to be flexible, we’re not going to give you anything,'” she said.
Mosher added that while there is plenty of interest in the unit, she feels bad “pitting people against each other” during a housing crisis.
‘Fixed-term leases are not working’
Mullins, the property manager, said in a statement that while she can’t discuss individual tenant situations for privacy reasons, “I can assure you that our company’s decision not to renew a fixed-term lease is based on a variety of factors and is not personal in nature.”
“Our business strategy is focused on ensuring the best possible outcomes for all tenants and property owners, and sometimes that means making difficult decisions about lease renewals,” she said.
Mullins also said BGI strives to avoid non-renewals “whenever possible and work with our tenants to find solutions that are mutually beneficial.”
“However, in some cases, it’s necessary to make difficult decisions for the long-term sustainability of our business,” she wrote. “We understand that this can be a stressful and uncertain time for tenants, and we are committed to treating everyone with compassion and respect.”
She did not respond to a follow-up question about whether BGI would update the unit to justify the $400 rent increase for the next tenant.
Mosher said she believes the rent cap should be tied to units rather than tenants, so landlords aren’t incentivized to kick them out when they want to raise prices.
“This is why fixed-term leases are not working, and the rent cap is not working,” she said. “This loophole is creating a situation where … the only way they’re going to get more money is to get rid of us.”
Mosher said when it comes to fixed-term leases, landlords have all the power and tenants have none.
“I wish I could have a raise of $400 a month when I wanted to,” she said. “The cost of living is going higher, but people aren’t being paid more.”
‘Overhaul’ needed: legal worker
Mark Culligan, a community legal worker at the Dalhousie Legal Aid Service, said while BGI Properties is not doing anything illegal, its email to Mosher shows that fixed-term leases are not being used as intended.
The Investment Property Owners Association of Nova Scotia, a landlord advocacy group, has argued that fixed-term leases are necessary to provide landlords better protection against problematic tenants.
But Mosher’s case shows that fixed-term leases are increasingly being used as a method to bypass the rent cap by evicting tenants and raising rent for the next ones, Culligan said.
“This is something that happens very often, but landlords often don’t say that directly,” he said.
“They’re not open about doing it for business reasons, because that’s basically telling someone that the landlord is choosing to maximize their profits over respecting the tenancy of a tenant.”
Culligan said the system needs to be “completely overhauled.”
“We are just about the only province in Canada that has both rent control and fixed-term tenancies,” he said.
“We should have fixed-term tenancies that give a right to renew to tenants, and if we’re not giving that kind of benefit to tenants, then all they are is a handout to landlords and we should get rid of them.”
He said tying rent increases to units rather than tenants – which is known as “vacancy control” – could be a big part of the solution.
“When one tenant leaves a unit and another tenant comes in, then the new tenant would enjoy the same kind of rent control restrictions – so landlords can’t jack up the rent between tenancies,” he said.
“This is a fantastic policy. I think it’s something that should be seriously looked at.”
No changes coming
Colton LeBlanc, the minister of Service Nova Scotia, which oversees the Residential Tenancies Act, told Global News Thursday that he believes “a business strategy is not an appropriate use of fixed-term leases.”
“We appreciate the tenant use of fixed-term leases for students that need a short-term placement, temporary job placement … but certainly the ‘business strategy’ is not something we support,” he said.
While LeBlanc said he recognizes that tenants are placed in a “stressful situation” when their leases aren’t renewed, he still wouldn’t commit to overhauling the system. He said the province is focused on increasing housing supply to address low vacancy rates.
LeBlanc also rejected the idea of tying rent control to units rather than tenants.
“We need landlords to be part of the solution,” he said. “We do not want to implement policies to push them out of the marketplace, and potentially lose units.”
The minister said those who believe the Residential Tenancies Act is not being followed should “apply for the program and have their case heard by the director and have it adjudicated.”
But Culligan, the legal aid worker, said under the current system, it’s difficult for tenants to enforce their rights because fixed-term leases give landlords all the power.
“Fixed-term leases totally undermine the rights that tenants have under the system here in Nova Scotia. And in fact, I would say they’re undermining the entire Residential Tenancies Act and the system of tenant protection,” he said.
“They’re taking all the power away from tenants at precisely the moment where tenants have the least power that they have historically, in the last generation, because the rental market is so tight.”
Mosher agreed.
“I have no control here,” she said. “I have absolutely no power in this situation.”
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