Telegraph Journal: Break the law, risk a fine: housing minister to landlords

Minister considers fines to get lawless landlords to follow rent cap rules

As of Feb 1, New Brunswick landlords cannot increase residential rents above three per cent annually, except in cases where capital renovations are needed to a unit.
In those cases, each landlord must apply to the Tenant and Landlord Relations Office (TLRO) for approval for an annual increase above three per cent but less than nine per cent.

Despite publicity of the new rules, Hickey says he’s had turn into a “quasi-TLRO officer,” personally calling individual landlords when his office receives reports about them jacking up rents above three per cent without approval.

“We have landlords that are just completely ignoring the rent cap,” the minister told Brunswick News Friday. “We have seen that across the province.”

At this point, Hickey says he’s advising problem landlords of the law and giving them a chance to correct their actions, but if they continue to ignore the rent cap rules, “then we will step in and people will be getting fined.”

“We’re going to be reasonable about it, but for example, I talked to a landlord just this week who issued 25 per cent rent increases to 20 different tenants, so that was a case of where we mobilized the TLRO, we reached out directly to those tenants and made sure they knew (about the rent cap), but that was because one tenant reached out to us,” he said.

In an interview Friday, Hickey wouldn’t provide names of the landlords who aren’t following the rent cap rules. However, he indicated some are represented by the provincial association currently lobbying for further property tax relief on behalf of residential rental property owners.

“What is frustrating is that we’ve got (some) members of the New Brunswick Apartment Owners Association who are (ignoring the rent cap rules) and then turning to me saying, ‘We want to be part of your consultations on the Residential Tenancies Act. We want to be part of your consultations on the property tax review,’” Hickey said.

“No, you’ve got to play by the rules and you can’t break the law.”

Willy Scholten, president of the New Brunswick Apartment Owners Association (NBAOA), told Brunswick News Monday that he wasn’t aware of any of its members ignoring the rent cap rules.

However, he acknowledged his association doesn’t monitor its members’ regulatory compliance.

“Our view is that the government sets regulations and rental housing providers need to follow those regulations, so if there is somebody who isn’t following them, our view is that they should,” said Scholten, who is also the chief financial officer of Colpitts Developments, which is a major builder and operator of residential rental units in the Fredericton area.

Scholten said he’s supportive of fines for those who aren’t following the rules “because what we’ve maintained all along is that there are a few bad apples that make it bad for the vast majority of us trying to provide good, safe, reasonably priced housing for our tenants.”

Hickey stressed that his comments aren’t indicative of the association as a whole, stating that Scholten and big-name landlords like Killam Apartment REIT have shown they want to work with the government to strengthen the province’s rental housing market.

His concern is focused on landlords who are taking advantage of tenants because either renters don’t know the rules or are afraid of retaliatory action if they speak out against a rent increase.

Hickey says his team is reviewing the options, including possible fines, if there’s continued pushback by some landlords against the rent cap rules.

“That’s what the legal team is looking at right now – if this persists, what do we do?” said Hickey, who is the minister responsible for the New Brunswick Housing Corporation.

“Hopefully a call from the minister of housing should scare people enough.”

Potential fines need to be ‘worthwhile’: tenants’ advocate

If fines prove to be necessary, the Holt Liberal government needs to ensure the penalties deliver enough of a hit to landlords’ pocketbooks to get them to abide by the rent cap, according to Nichola Taylor, chair of tenants’ rights group New Brunswick ACORN.

In 2022, the then Higgs Progressive Conservative government put fines in place to support a series of changes it made to the Residential Tenancies Act.

Under those changes, a landlord who doesn’t follow the rules surrounding the termination of a tenancy, for example, can face a fine of “not less than $240 and not more than $5,200,” according to legislation.

“(Those fines) are very small and that’s a problem,” Taylor said. “For a landlord, it could be a month’s rent, so if a landlord has several buildings, it’s not really going to deter them from breaking the law, so the penalties have to be worthwhile.”

Tenants who have received above three per cent rent increases have been reaching out to NB ACORN for advice, Taylor said, noting in most cases, landlords aren’t even providing justification for these hikes.

Advocates have warned that New Brunswick will continue to lose affordable housing stock until the new rent cap is tied to the unit, not the tenancy. Under the current rules, landlords can still jack up rents between tenants.

“We are starting to hear where landlords are offering cash-for-keys where basically they are telling the tenant, ‘I’ll give you such-and-such amount of money to find another apartment if you leave this one,’ because they want to get someone else in to raise the rent,” Taylor said.

“I think we’ll also start seeing more fixed-term leases in the next few months because that’s getting really bad and out of hand in Nova Scotia.”

NB ACORN continues to advocate for further reforms to the Residential Tenancies Act, Taylor said, including to eviction rules to make it harder for landlords to displace tenants in the province.

Hickey said Friday the Tenant and Landlord Relations Office hasn’t seen an uptick so far in ‘renoviction’ cases since the cap came into place Feb. 1.

More reforms are expected to the Residential Tenancies Act later this year, Hickey has said, with the focus on addressing “gaps” in the existing legislation while balancing out the needs of tenants and landlords.

“I’m not going to be in the business of putting people out of business – we don’t want that – but we don’t want operators breaking the law either and the rent cap is in place,” Hickey said.

“Issuing and enforcing rent increases above three per cent is against the law.”

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Article by Barbara Simpson for Telegraph Journal