BC scraps loophole allowing landlords to seek massive rent hikes in hot rental markets

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by Ellen Coulter and The Canadian Press

Posted Dec 9, 2017 12:02 pm PST

VANCOUVER – The Province is closing another loophole in residential tenancy regulations in a bid to keep rental rates down.

The BC government is getting rid of the “geographic rent increase clause”, which allows landlords to seek huge rent hikes if other units in same the area are being rented for higher amounts. The current allowable rent increase is set at four per cent but the clause allows landlords in hot markets to raise rents at significantly higher rates to match neighbouring prices.

MLA Spencer Chandra Herbert says the clause has meant many tenants have been living in fear of drastic increases to their rent.

“Landlords were using a clause where they could say ‘your neighbour is paying 40 per cent more than you, so we’re going to apply to increase your rent by 40 per cent’. In some cases upwards of 73 per cent,” he says. “It just wasn’t fair, it led to a lot of abuse and in quite a few cases, it led to people losing their homes. And it just wasn’t right.”

He says the clause left many tenants feeling threatened.

“The concern we had… is that rents are already fairly unaffordable and in many cases, landlords were using this to bully people into paying much higher rent increases, saying ‘we’re going to apply for a 70 per cent rent increase but if you sign today we’ll only give you a 30 per cent rent increase’.

“That was just not fair, it abused the spirit of the legislation, it was not how it was supposed to work.”

Chandra Herbert says the West End and North Vancouver have been hotspots for large rent increases based on the clause.

The Tenant Resource and Advisory Centre says some renters have reported agreeing to increases of 30 per cent after a landlord threatened to raise rates by as much as 50 per cent.

The province says by getting rid of the clause, renters no longer have to fear significant rent increases based on the market where they live.

The change follows the NDP government’s announcement in October that it would eliminate vacate clauses and restrict rent increases between fixed-term tenancy agreements — all of which come into effect on Monday.