43 per cent rent hike at Fredericton apartment building struck down — for some

A 43 per cent rent increase notice delivered to a group of Fredericton tenants in January, including several seniors, has been struck down by the New Brunswick Residential Tenancies Tribunal.  

However, the ruling applies only to those tenants who asked for a review.

"I find that the Landlord has not established to my satisfaction that the increased rent is reasonable in relation to that charged for comparable units," wrote Andrea Wilbur, the residential tenancies officer who dealt with the case.

"Therefore, I set aside the [rent increase] Notice."  

Numbered Halifax company new owner

In November an apartment complex at 35 McKnight St. in Fredericton sold to a numbered company in Halifax for what appeared to be a premium price of $6.675 million. The amount is $1.8 million above what New Brunswick government assessors valued it to be worth after reviewing the purchase.

Following the sale in January, renters in 42 of the two-bedroom units in the building received six-month notices from the new landlord that rent would be rising by $390 on Aug. 1, to $1,300 from $910 per month.

Eighty-two year old Irene Murphy was one of those and said at the time the notices caused a significant amount of worry among her neighbours.

"Oh my goodness, they are so upset," said Murphy. 

"I know a friend down the hall here. She told me yesterday that by the time she paid everything that she had to pay with this rent increase — and that's without groceries — she'll have $85 left over."

Murphy had lived in the building since 2012 and was among a number of tenants who filed for a review of the increase with New Brunswick's Residential Tenancies Tribunal

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The tribunal has the authority to forbid an increase that is found to be not "reasonable" when judged against comparable apartments in the same geographical area.

In her decision, Wilbur detailed how the new owner hired Moncton-based K Squared property management to look after the building as its landlord.  She was told money was spent to repair an elevator, fix multiple coin-operated washers and dryers "on all floors" and hire biweekly cleaners.   

"The Landlord claims they are prioritizing all maintenance issues and concerns and are addressing them immediately," wrote Wilbur.  

"In addition, the Landlord states that the rent increase is necessary due to the increase in property taxes, building insurance and overall cost of maintaining a building this size."

Wilbur said she tried unsuccessfully to mediate a resolution between the landlord and complaining tenants, forcing her to rule on the rent increase itself.

Wilbur found vacant two-bedroom apartments in five buildings nearby were being advertised for an average of $1,283 per month but those units were generally 30 per cent larger. They also had better amenities, including onsite superintendents and more appliances, including in-unit washers and dryers.

Wilbur also found that rental rates for two-bedroom apartments in five other nearby buildings averaged closer to $1,100 per month and on the basis of all 10 buildings she reviewed, ruled that raising the rent on tenants like Murphy to $1,300 was not reasonable.

Murphy is pleased with that decision.  She said the landlord is now proposing a $90 rent increase — although she has found another apartment and has already moved out.

"Rent is going to $1,000 and that is $300 less than what it was going to be," said Murphy.
"That's far better." 

It is unclear, however, how many tenants benefited from the ruling.

Residents who didn't ask for a review not covered

Despite Wilbur's decision that the amount is unreasonable, the landlord is still entitled to charge the $390 increase to any tenant who did not individually ask for a review. How many that might be out of the 42 units that received the original notice is unknown.

On Tuesday, a person answering the main phone number at K Squared property management said the company had no comment on the rent increase ruling. 

Neither does the province.

Jennifer Vienneau, a spokesperson for Service New Brunswick, which includes the Residential Tenancies Tribunal, said in an email that she could not reveal how many tenants were covered by Wilbur's ruling. 

"Due to our obligations to protect the privacy of applicants, we are unable to comment on specific cases related to claims made by tenants or their subsequent rulings," she wrote.

Jael Duarte, a lawyer working with the New Brunswick Coalition for Tenants Rights, said some tenants, especially elderly renters, can be unfamiliar with how to object to a rent increase. They may also be intimidated by challenging a landlord. 

She argues any increase found to be unreasonable should not be charged to any tenant in the same building. 

"It should apply for everyone,"  Duarte said.

"According to the law, if they didn't complain, it's in the hands of the landlord."