Backdoor Rent Increase?

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SkaSka
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Backdoor Rent Increase?

Post by SkaSka »

So we are going into our 5th year with our landlord and there was something interesting he did with the Residential Tenancy Agreement (BC) for renewing another 1 year lease.

We have been doing 1 year leases every year for the past 4 years.

Every year, in Section 2 "Length of Tenancy" our landlord has checked off the box:
i) the landlord and the tenant may agree to enter into a new tenancy agreement
- If the landlord and tenant do not enter into a new tenancy agreement, the tenancy continues on a month-to-month basis on the same terms unless the tenant gives legal written notice to end the tenancy.
However, this year, he changed things up and check off this box and had us initial the box
ii) the tenancy ends and the tenant must move out of the residential unit
- If you choose this option, both the landlord and the tenant must initial in the boxes to the right
We were weary of putting our initials on this but felt that we had no choice really because we wanted to renew for another year and were not willing to refuse to sign the lease and start looking for a new place to live at the end of April 2017.

When we quizzed our landlord why the change, he insisted that he was standardizing this across his other rental units as well and it was for more protection for him as the landlord in case of a bad tenant that he wants gone at the end of the tenancy. He insisted that he wanted us to stay on as tenants (if we wanted to after the lease) as we are good tenants.

While we believe him on the statement that he wants us to stay, we are suspicious that this is a backdoor way to get around the government capped rent increases since this clause basically states that the tenancy ends. Our rent is below the market rate of rent by around $200 or so in similar units renting in our building.

What we assume is that he wants market rate rents and that his move in early 2018 is to get to us with a new renewal agreement with rent jacked up to whatever the market rate is at.

We think this is likely where this is heading and will use the year to think through various different scenarios in terms of where we will live in spring of 2018.

Anyways, was wondering what other opinions on this may be?
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kcowan
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Re: Backdoor Rent Increase?

Post by kcowan »

If you are in a rent controlled building, I think you are OK but why not ask him to renew the old way?
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Re: Backdoor Rent Increase?

Post by SkaSka »

He wasn't going to renew if that new clause wasn't ticked and initialed.
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Re: Backdoor Rent Increase?

Post by freedom_2008 »

Under your last year lease term, you (the tenant) have the right of not signing another fixed term lease for this year or ever, but go for month to month, the rent increasing should be protected by the rule (x.x% once only each year). The landlord can't force you out, unless: 1. you breached the rental agreement conditions or 2. the landlord and his family need to move into the unit themselves. In case 2, the landlord needs to give you two months notice, plus return one month rent to you as compensation. He can't ask you to move to rent to another renter. If you want to move, you just need to give one month notice.

But under this new lease term, if you sign it, then you are only protected during the term, and you have no right to stay afterwards and the landlord can do whatever he/she wants (e.g. ask much higher rent, rent to others who will pay more, ...) after the term.

You have nothing to lose to go month to month, and your landlord can't ask you to move out other than the conditions as above, and even if the unit is sold, you still have the same right as before with the new landlord. You can check with BC RTB to confirm that: http://www2.gov.bc.ca/gov/content/housi ... -tenancies. You can call them, and read the docs there to be sure.

added: my understanding is that if you don't want to sign the new lease, you are still protected under the current lease and have the right to go month to month as it said:
"i) the landlord and the tenant may agree to enter into a new tenancy agreement
- If the landlord and tenant do not enter into a new tenancy agreement, the tenancy continues on a month-to-month basis on the same terms unless the tenant gives legal written notice to end the tenancy.."

Best to Check with RTB to be sure.
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Re: Backdoor Rent Increase?

Post by BRIAN5000 »

SkaSka wrote:He wasn't going to renew if that new clause wasn't ticked and initialed.
If no one renews it went to a month to month before you signed the new clause, you didn't want month to month?
Now he doesn't have to give you notice, it's been given?

Phone the Tenancy Branch and see what they say maybe would have been good to do this before you signed, how much time did you have before you had to sign etc.?
he insisted that he was standardizing this across his other rental units as well
Yup standard landlord bullshit, this is my standard contact blah blah blah, how many units does he have?

Oops posted almost the same time.
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Re: Backdoor Rent Increase?

Post by freedom_2008 »

Copied from RTB web site:

"Fixed-Term Tenancies

If a fixed-term tenancy agreement (or a lease) has a move-out clause that requires the tenant to move out at the end of the term, the tenant can move at the end of the term without giving the landlord notice.

When a fixed-term agreement doesn’t require the tenant to move out at the end of the term, the tenant must serve written notice to end the tenancy so that it’s received:

At least one month before the effective date of the notice, and
Before the day that rent is due
The effective date of the notice cannot be earlier than the end of the fixed term.

A fixed-term tenancy agreement that doesn’t require the tenant to move out at the end of the term will continue as a month-to-month tenancy under the same tenancy agreement if the tenant doesn’t give notice to end the tenancy."

Your current one lease is "a fixed-term agreement doesn’t require the tenant to move out at the end of the term", right? So you, the tenant and not the landlord, have the control and right now to stay as month to month or sign a new lease. This is the difference before your current lease term and the new lease term wrt your right at the end of the lease.
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Re: Backdoor Rent Increase?

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@freedom_2008

I think our issue would have been that if we didn't renew for another year, it would have gone month-to-month, but then that could have caused animosity and he could have used the "Landlord's Use of Property" clause to move in a family member to live in the unit to evict us.

It was a toss up for us in terms of having at least 1 whole year of certainty vs. an unknown amount of time before a legal eviction would occur. That legal eviction might never occur or it could occur the next month after our previous 1 year lease ended. We don't like that kind of uncertainty so we ended up signing for the additional year while holding our noses. What we didn't like was the uncertainty of the situation going into a month-to-month.

@BRIAN5000

He came up to our unit to the get the new agreement signed so we didn't really have a choice. Well, maybe we did but I think what flashed through our minds was the whole certainty of another year vs. uncertainty of month-to-month with possible eviction within 1 year through legal means.

Our original forecast for renting at this location in this unit was about 5 years and since this is our 5th year, I guess this gives us the motivation to look elsewhere to rent or to find something to buy (if it turns out that our landlord is going to jack the prices at the end of this agreement).
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Re: Backdoor Rent Increase?

Post by BRIAN5000 »

He came up to our unit to the get the new agreement signed so we didn't really have a choice.
What he just showed up at the door one night unannounced, smart, did he come in as well sit and chat? (aka have a look around)
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Re: Backdoor Rent Increase?

Post by SkaSka »

BRIAN5000 wrote:
He came up to our unit to the get the new agreement signed so we didn't really have a choice.
What he just showed up at the door one night unannounced, smart, did he come in as well sit and chat? (aka have a look around)
This was pre-arranged - we did this ever year for the past few years where we would agree upon a time to renew the lease for an additional year and he would come to the unit with the papers for signing and to pick up the 12 cheques.
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Re: Backdoor Rent Increase?

Post by freedom_2008 »

Sadly, with low vacancy rate and high demand, BC landlords can and most do choose fixed term lease with tenant moving out (at the end) option, as it is to the benefits of the landlord.
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Re: Backdoor Rent Increase?

Post by queerasmoi »

The way it always worked for me in Vancouver 2006-2014 was, I'd sign the one-year lease that renews month-to-month, and then the landlord & I just wouldn't talk about anything in particular when the one-year mark passed. So it just went month-to-month.

In an apartment building this is pretty standard. If you're in a suite of a house or such, though, you're not just one in a crowd anymore and maybe the chance of being pushed out are higher.

The way most BC landlords jack up rents more than the limit is by renoviction :P
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Re: Backdoor Rent Increase?

Post by Hammerer »

Does the new tenancy automatically cancel the previous tenancy agreements in BC?

Or is there some form/process where a landlord has to formally end a tenancy, otherwise > 1 is in force? (In other words, does OP now, in theory, have 5 tenancies?)
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Re: Backdoor Rent Increase?

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Hammerer wrote: 15 Apr 2017 00:02 Does the new tenancy automatically cancel the previous tenancy agreements in BC?
No, a new agreement resets to market price.
The way most BC landlords jack up rents more than the limit is by renoviction :P
Yes we have been renovicted several times:
- Replace the copper piping that was randomly leaking at end of life
- New sinks, faucets, tubs
- New light fixtures and all electrical outlets and switches
- New kitchen appliances
- New kitchen and bathroom flooring and backsplashes
- New balcony flooring (1350 sq.ft.)
- New engineered hardwood to replace W-W carpeting (1950 sq.ft.)
- New CO and smoke detectors
In addition, they have replaced the roof, and totally redone the exterior twice.
Because we were former home owners, we appreciate their actions. It will be 20 years December 2017.

Of all the things they did, we would probably have kept the old dishwasher and stove but replaced the fridge. At least until they failed. I insisted on keeping a toilet that had already been replaced.

They could do a better job on the indoor parking garage but so far the car has not complained!
We are very happy with our landlords.
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Re: Backdoor Rent Increase?

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kcowan wrote: 15 Apr 2017 08:56 We are very happy with our landlords.
What kind of return do you think the landlord has made on his investment during the 20 years you were there?
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Re: Backdoor Rent Increase?

Post by longinvest »

Deaddog,
deaddog wrote: 15 Apr 2017 11:39 What kind of return do you think the landlord has made on his investment during the 20 years you were there?
What's wrong with a landlord making some profit while his renter enjoys a hassle-free place to live? Maybe kcowan does not want to worry repairing roofs (and such things) and prefers to let somebody else be responsible for it all?

I don't grow my own vegetable; I buy them at the grocery store. Following your logic, should I think about the kind of returns the grocery store is making, too?
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Re: Backdoor Rent Increase?

Post by AltaRed »

deaddog wrote: 15 Apr 2017 11:39
kcowan wrote: 15 Apr 2017 08:56 We are very happy with our landlords.
What kind of return do you think the landlord has made on his investment during the 20 years you were there?
I'd say the landord has done very well with unrealized cap appreciation over 20 years, albeit if the landlord bought the place in the late 80's, s/he wouldn't have gotten above water again until circa 2000. It all depends on when the original capital investment was made.

I'd also say... who cares about how well the landlord has done? If a 20 year tenant is happy, it hopefully has been a 'win-win' situation.
Last edited by AltaRed on 15 Apr 2017 12:01, edited 1 time in total.
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Re: Backdoor Rent Increase?

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AltaRed wrote: 15 Apr 2017 12:00 I'd also say... who cares about how well the landlord has done. If a 20 year tenant is happy, it hopefully has been a 'win-win' situation.
Exactly!
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Re: Backdoor Rent Increase?

Post by kcowan »

Deaddog
Our complex is owned by Maple Leaf Property Management. There are 500 rental units. It is backed by/run by Iranians. It is a huge company and seems to be very successful. Rent have increased 55% in 20 years. The unit is rent-controlled but increases through capital investments are allowed. The land is rented from the Capilano band on a 99-year lease.

Prior to this I had spent 30 years as a property owner and my last property was 5000 sq.ft. on a one acre lot with pool and enclosed jacuzzi, 3-car garage. It was in an estate subdivision of large homes (not McMansions).

In the early days, all my free cash flow went to feed mortgages (except for an optional 10% of gross earnings to buy company stock at minimum 15% discount). For the last 20 years, I have made my money in the markets. This enabled us to retire in 2002. I do not hold REITS because I object to return of capital.
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