NORTH VANCOUVER (NEWS 1130) – Metro Vancouver’s super-tight rental market means unscrupulous landlords are looking for ways to exploit loopholes and cash in.
That appears to be what’s happened on the North Shore, where a landlord buried a clause in a rental contract that would have allowed rent hikes way above the legal cap.
Earlier this year, an anonymous tip came into the office of North Vancouver-Lonsdale MLA Bowinn Ma.
A landlord with several properties in the region had inserted a clause into the back of rental contracts, saying the signatory agreed to annual rent hikes north of nine per cent — or, more specifically, inflation plus seven per cent.
Ma says that’s way higher than this year’s provincial cap of two and a half per cent.
“Now, the Residential Tenancy Act does allow for tenants and landlords to mutually agree to rent increases greater than the maximum general rent increase set by government,” she explains. “However, it is normally negotiated on a case-by-case, one-time basis, and this clause attempted to establish a mutual agreement that lasted indefinitely, and in theory could be invoked by the property owner at their discretion every year.”
‘I had never seen this, as an MLA’
It’s a situation she had never come across in her years as the representative for the riding, adding she consulted a colleague, MLA Spencer Chandra Herbert’s office, who also said they’d never seen anything like this before either.
“Even the Ministry of Municipal Affairs had not been aware of this kind of use of that provision in the RTA before,” Ma says.
After reaching out to the building owners, Ma says they confirmed the clause was being put into new tenancy agreements, claiming it was “perfectly legal and enforceable.”
“The consequences of a widespread use of this kind of clause in leases could be serious across the province,” she explains. “If it was deemed legal and enforceable, every landlord could simply build this clause into their leases and you could render rent controls virtually pointless.”
In the case of this landlord, the province ultimately stepped in, determining that, no, the clause was not legal, and if not removed, the landlord would face fines of $5,000 a day.
Ma says rental rates skyrocketing across the region over the past few years has put increased pressure on renters around B.C.
“In addition to organic market pressures on price, loopholes in the Residential Tenancy Act have also become more used by landlords, some landlords,” she explains. “I have to emphasize that, some landlords have been using loopholes in the Residential Tenancy Act more frequently.”
She notes this situation has turned an opportunity for flexibility between a renter and prospective landlord “into huge liability for the overall security of tenants in the rental market.”
Ma says if you’re a renter, and you see something fishy in a contract, contact the Residential Tenancy Branch.
The rental rate increase in B.C. is set at inflation — which, in 2019, would come to 2.5 per cent, and 2.6 per cent in 2020.
-With files from Lasia Kretzel