Many N.B. tenants excluded from phased-in approach to large rent increases

A Fredericton woman has discovered another "loophole" in legislation that was supposed to protect tenants like her who are facing rent increases above inflation. 

Meaghan Macquarrie received a notice from her landlord last month, informing her that rent for her two-bedroom apartment would be going up in September to $1,700 from $1,550 — an increase of almost 10 per cent. 

Since that amount is above inflation, Macquarrie asked the landlord to phase the increase in over two years, according to the new rules introduced by the New Brunswick government in December to replace its expiring one-year experiment with a rent cap. 

That's when Macquarrie's landlord told her the provision does not apply to fixed-term leases like hers. 

A government spokesperson confirms this is the case. 

Jennifer Vienneau of Service New Brunswick, which includes much of the housing portfolio and the Residential Tenancies Tribunal, said legislative "amendments are expected to be brought forward soon to address this." 

With the current sitting of the legislature, that could mean a bill between Tuesday and June 16, she said. 

Housing Minister Jill Green was not available for an interview but has repeatedly said the new rules to protect tenants were never meant to have exceptions. 

She told CBC News recently that the Residential Tenancies Tribunal has been interpreting the new rules more flexibly than she intended.

Although the rules say the tribunal "may" spread large increases over two or three year, Green said the decision to phase in large increases was never meant to be discretionary in any way. She said if increases are above inflation, which is currently 7.3 per cent, "they will be" spread over two or three years.

Macquarrie heard Green's explanation on Information Morning Fredericton last week. 

"She was very adamant, defensive, and I would say aggressive, in her interview that there were no exceptions to this rule," Macquarrie said. 

Excluding fixed-term leases, "seems like a bit of a loophole because Minister Green made no mention of fixed-term leases in her interview," said Macquarrie.

Since there are only two types of leases — a fixed-term lease with an end date and an open-ended one without a termination date — Macquarrie believes there are a lot of people in the same position as she is. 

Tenant wants retroactive changes

She is calling on the government to make any amendments retroactive to January first, when the original legislation took effect. 

"This needs to be fixed. It's truly unacceptable that there's no protection for fixed-term renters," Macquarrie. said. "She made it clear in her interview with Information Morning that there were no exceptions to rent increases.

"If she's going to make changes in June that cover her shortfalls, then she needs to make sure that those who aren't covered now will have retroactive coverage when those policies come into play."

Vienneau said the department won't comment on whether the proposed changes would be retroactive until the amendments are finalized.

Implementation 'shambolic'

A member of the New Brunswick Coalition for Tenants Rights said the fixed-term lease exemption just adds to the confusion surrounding the new legislation. 

"It was shambolic, truly, in its implementation," said Tobin LeBlanc Haley, a sociologist at the University of New Brunswick's Saint John campus. 

And the legislation itself contains significant "murkiness," said Haley. For starters, fixed-term leases are not defined in the legislation. 

And she also doesn't see any justification for treating fixed-term leases any differently from leases that do not have an end date. 

"No matter what kind of lease you enter into, you're entitled to safe, secure and affordable housing," Haley said. 

"It should be equal across tenant groups. There should absolutely be no differential treatment of tenants."

She said her group doesn't keep track of what percentage of New Brunswick renters are on fixed-term leases. 

Vienneau said Service New Brunswick doesn't either, so it's difficult to determine how many people are affected by the fixed-term loophole.  

First-quarter review revealed issues

Green said a "quality-control review" of the first quarter under the new legislation has revealed eight instances where the Residential Tenancies Tribunal did not allow increases above inflation to be phased in over two or three years.

She said the government will provide "financial support" to those renters.

Green told reporters on Tuesday at a housing summit in Saint John that it isn't a large amount of money.

On Thursday, Vienneau said the amount has not yet been determined. 

Small changes not adding up, says advocate

"The problem is that there's been all these little incremental changes because they won't commit to a rent control regime that would be effective and that has worked in other jurisdictions," said Haley.

Instead, they implemented a one-year rent cap, and then legislation to replace it that now requires several amendments to fix much of the confusion. 

"It's just so bureaucratically clunky and inefficient," she said.

"Tenants don't know what's happening. Landlords don't know what's happening, and clearly members of the Residential Tenancies Tribunal — whose job it is to enact this legislation — don't know what's happening."

Haley said her group would like to see "a true rent control regime that we see in other jurisdictions like Ontario, where rent control is tied to [the consumer price index]."

That way, landlords and tenants know exactly when rents will increase and by roughly how much, and landlords can apply for an increase over and above the automatic increase. 

"To me, that is much more straightforward and much less bureaucratically clunky than having to sort of manoeuvre constantly," said Haley. 

In the meantime, tenants like Macquarrie and her roommate are left wondering whether their above-inflation rent increase will eventually be covered by promised amendments. 

Without them, she said, "It seems like I'm going to have to pay the increase or move out."