New Brunswick tenants by the hundreds adjust to life under new landlords

Jaclyn Reinhart has lived with her two children in a three-bedroom duplex on the east side of Saint John since 2018.

It used to belong to a local landlord, but last year the building sold to new owners in Coquitlam, B.C. Last month, Reinhart received notice her lease is being terminated.

"It's one of the most stressful times in my life," Reinhart said. "Out of the, maybe, five stressful times in my life, it's definitely in the top three."

She and her teenage children have been given until the beginning of May to move out to allow for what she has been told will be a $5,000 bathroom renovation to fix a cracked tub and other issues.

Reinhart doesn't believe a renovation that size requires the apartment to be empty.

She suspects it is a manoeuvre to replace her with new tenants who can be charged substantially more rent than the $934 per month plus utilities she currently pays, and without the difficulty raising her rent might entail.

Unlike a new tenant, Reinhart is entitled to six months notice of a rent increase. If she objects to its size, she can request an official review by the Residential Tenancy Tribunal that could see it rejected or imposed in stages over a three-year period.

'They don't want me here'

"I can go stay at a hotel for two days," Reinhart said about the renovation. "I can go to my parents. I can do something for even three days so they can fix it.

"They don't want me here. They want me out."

The property manager for the building confirms the need to fix the bathtub triggered the termination notice, but says there are other issues to be addressed.

"We are not people who are renovicting people," said Bee Ty.

"There's multiple holes in the wall. There's a door frame that's loose that I need a professional [to] come in and do it. So we decided instead of just doing a bathtub and spending $5,000 we may as well have the whole crew go in and do everything."

Ty said she feels awful about removing a tenant and defends the B.C. owner as an amazing person who is doing what makes financial sense for his investment. But she does acknowledge they do want Reinhart and her children out.

"A $5,000 renovation on an undervalued property does not work, so we are renovating the entire apartment and we'll be finding a new tenant or switching to an Airbnb depending on what would be more profitable," she said.

Reinhart is among hundreds of tenants in New Brunswick who have been adjusting to life under new landlords.

Over the last four years, a wave of individuals and companies, many from Ontario and British Columbia, have been investing heavily in rental buildings.

Brock Rogerson, a Calgary-based investor, has grown into one of the largest private landlords in Saint John over the last decade.

He said even with recent increases in property values, prices for rental buildings in Saint John are so low compared to other Canadian cities, landlords can earn higher returns than almost anywhere in North America. That has been attracting the interest of investors across the country.

"I still believe that Saint John offers the best value for Canada," he said.

Provincial property records show that in Saint John's south-central peninsula alone, more than 180 apartment buildings have sold to new owners since 2019. Just over 100 of those have been bought by out-of-province investors. 

The new investments have helped raise property values in many neighbourhoods, increased tax revenues to the city and, in cases where repairs and renovations are undertaken after a sale, have helped revitalize aging buildings.

But the buying spree has also contributed to escalating rents and housing affordability problems for many, especially lower-income tenants.

Among the many new landlords in the market, some have been more aggressive than others about boosting rents to earn a return on what they've spent. Some also appear to be novices who are learning about their buildings and responsibilities to tenants in real time.

Rebecca Beaulieu found that out over Christmas.

She moved into an apartment in Saint John's south end in mid-December, but a leaking roof had her scrambling to move back out in January.

"It was like eight different spots," Beaulieu said of the leaks.

Puddles formed in one room and began moving toward a live outlet that was built into the floor.

Beaulieu called the fire department for advice about what to do and was told power to the outlet had to be cut off for safety. She said she then discovered the outlet was one of several on the same breaker.

"It fed 90 per cent of our apartment, so we didn't have any power in the rest of the apartment either," she said.

The building is owned by a West Vancouver investor who bought it four years ago. Beaulieu isn't sure if the owner understands the state of the building.

But if the owner doesn't know and lives 5,000 kilometres away, Beaulieu believes the property management company that looks after the building should be made responsible for not renting what was an unlivable space. 

"I think property management companies should be held accountable for who they take on as clients," said Beaulieu.

"I think they should be responsible for telling building owners things that they don't want to hear, like: 'I'm sorry, we cannot rent this apartment in the condition it's in. We cannot get rent for you unless you fix it.'"

Shift in attitudes

Rogerson has been watching with some alarm what has been happening in the rental market in Saint John. He's detected a shift in attitudes toward building owners and has turned from a buyer of properties into a seller.

"If I have more than a few properties in residential, people tell me that I'm greedy," said Rogerson.

"So, fair enough. I just don't want to be part of it."

Rogerson blames a combination of "bad apples" and a "learning curve" among new landlords for some of the bad experiences tenants have encountered in recent months. He believes media reports have sensationalized individual incidents and government has responded with poor solutions as a result.

He said rents are too low in Saint John given the increased demand for apartments. He contends the fix for that is increased supply, both public and private, not imposing new rules or restrictions to prevent current owners of buildings from charging tenants market rates 

"You know, unfortunately, rather than focusing on the fact that these people have been benefactors of below-market rents, the media stories come out and they say, hey, the rents are up by 30 per cent or 50 per cent, said Rogerson

"It's really just going to fair market value. But that's not what this story is. The story is 'evil landlord charging market rents.'"

Rogerson is making good on his plan to reduce his rental property holdings in Saint John, but new buyers continue to enter the market behind him

He sold four buildings in the city in January and February for a combined $1.88 million that he originally bought in 2017 for a combined $842,500. Two of them sold to an investor in Chilliwack, B.C., and two to a Nova Scotia-based company.

Tenant plans to challenge landlord

Reinhart plans to challenge her landlord's attempt to terminate her lease at the Residential Tenancies Tribunal. But, if she can afford it, she hopes to be able to buy a place of her own later this year and leave renting behind.

"You've got all these people from out of province buying houses just to make money off of New Brunswickers, which predominantly, we don't even have a living wage," she said.

Beaulieu largely shares that view.

But earlier this month she moved into a building purchased 14 months ago by a company in New Westminster, B.C., and said it is showing her that absentee owners need to be judged individually.

"They delivered my keys to my old place because I couldn't leave because I was waiting for the fire department to show up," said Beaulieu. 

"They've just been really, really fantastic. So, I feel like if there were more people like them things could improve."