'We're more than just market value': N.S. tenants sound alarm on above-cap rent increases

When Lindsay Houghton was told her landlord wanted to raise her rent 17 per cent, she assumed they didn't know about Nova Scotia's two per cent rent cap, and the issue would be cleared up quickly.

She never thought she and her family would end up evicted, with nowhere to go.

Houghton, her husband, two children and her elderly mother have been renting a home in Kingswood, outside of Halifax, for two years. In May, the property management company that represents her landlord told her they wanted to increase the rent from $2,600 to $3,050 monthly.

Houghton emailed the property management company, The Fan Group, and told them she wouldn't agree to the illegal increase.

"They came back and said that market value was what they were offering, and that was what they wanted," Houghton said. "And if we weren't willing to agree to those terms, then the market was hot right now and they could sell the house very quickly."

And that's what happened. She and her family were later told the home had sold, and the new owner plans to move in. They have to move by the end of August.

"We're more than just market value," Houghton said. "We're humans. If we don't have a place to live tomorrow, where are we?"

Dalhousie Legal Aid Service in Halifax says they're receiving a growing number of inquiries about landlords trying to increase rent above the cap. 

Joanne Hussey, a community legal worker with the service, said she is also seeing tenants who are dealing with retaliation after contesting illegal increases.

"When they don't agree to pay an over-cap rent increase, they're told ... they're not going to be given a new lease or that the property is going to be sold, or that some other condition of their housing situation is going to change," Hussey said.

"And it's a difficult thing for tenants to prove in a residential tenancies hearing or small claims [court] that it's a retaliatory gesture by the landlord. So it's a frustrating situation for people to be in."

The previous Liberal government introduced the rent cap in 2020 to protect renters during the COVID-19 pandemic.

The current PC government campaigned against rent controls. It has since extended the cap to the end of 2025, although it will rise to five per cent in January.

But Hussey said rising costs are leading some landlords to try to get around the rent cap. In early June, the Bank of Canada increased its benchmark interest rate to 4.75 per cent — the highest it's been since 2001 — driving up payments on many mortgages.

"I think a lot of landlords are trying to find ways to pass their increased costs onto the tenants that are renting from them," Hussey said. 

'We have nowhere to go'

In Houghton's case, she said she eventually agreed to the 17 per cent rent increase — even though she knew it was above the cap — before her landlord sold the house that she and her family were living in.

But she said her landlord then asked her to pay half the cost of repairing the heating system.

When she begrudgingly agreed, the landlord asked her to switch from a periodic lease that renews every year, to a fixed-term lease with an expiry date. She said at that point, she put her foot down.

"Signing of a new lease has no place being alongside a threat, like all of a sudden a house being sold," she said. "I understand this is his property and he can do whatever he wants with it, but then let that be it. If you're going to sell, then sell.... Those two things just shouldn't be connected."

CBC News reviewed emails detailing Houghton's interactions with her landlord, and contacted The Fan Group asking to speak with the landlord, but did not receive a response. 

Houghton said she is worried about where her family will live, in a city with skyrocketing rents and a low vacancy rate.

"We have nowhere to go," she said. "It's not just me and my husband ... we have a lot of mouths and a lot of people relying on us to keep a roof over their heads."

Sarah Whynot found herself in a similar situation after renting a one-bedroom apartment in Dartmouth for five years, first as a sublet and then on a fixed-term lease with a set end date. 

She said she was offered a new lease every year, with minor rent increases. Then this year, things changed.

On Jan. 18, Whynot received a letter from her landlord, 222 Portland Residences Inc., asking her to "let us know your intention in writing for renewing your lease ... in order to begin the process of forming a new lease."

Whynot said she then spoke to a representative for the company who offered her a new lease with a monthly rental increase of around $500. 

According to Nova Scotia's Residential Tenancies Act, a new lease with the same tenant in the same apartment falls under the rent cap.

Whynot said she told the representative the increase they were offering was higher than the cap. Then on Feb. 3, she received a letter saying the landlord "elected not to renew" her rental agreement, and she would have to move out by the lease's end date on June 30.

She said she began "scouring" Kijiji and Facebook Marketplace looking for a new place to live, but couldn't find anything she could afford.

"My only option ... is to move home with my parents. I have to quit my job and move home to Bridgewater, which is about an hour and a half away," Whynot said. "I pretty much cried for days straight, no idea what else to do."

'Read your leases' 

CBC News contacted Firm Capital, the Toronto-based parent company of 222 Portland Residences Inc., and spoke with Sharon Campbell, the property manager for residential buildings in Nova Scotia. 

Campbell disputed Whynot's claims, and said she had never been offered a new lease. 

"She was always on a fixed-term lease and the landlord is under no obligation to renew, end of story," Campbell said. "She didn't sign any paperwork, there was nothing. She's the one that filed to the Landlord and Tenant Board and she's the one that filed in small claims court. She lost both."

CBC News reviewed the small claims court decision, which ruled the eviction was legal since the term of the lease had ended and "no reasons for ending the lease are required of the landlord."

"When it comes to fixed-term leases, you have to understand what you're actually signing up for," Campbell said. "Read your leases, people — read the fine lines, that's what they're there for."

When asked if Firm Capital had previously renewed any fixed-term leases with Whynot in the five years she had lived there, Campbell said the company had inherited all the fixed-term leases and hasn't "had the building that long." 

Property records show that 222 Portland Residences Inc. bought the property in late 2018. Firm Capital has been associated with it since early 2019, according to mortgage documents.

Government response 

When asked about above-rent-cap increases and landlord retaliation, the Department of Service Nova Scotia said it doesn't comment on specific cases.

"In this type of situation, we would encourage tenants to research their options, including seeking legal advice and/or applying for an application for a residential tenancies hearing," a spokesperson said by email.

Both tenants said they know it's too late for them to stay in their rentals, but they want to speak up for others who may find themselves in a similar situation.

"Is it being looked at? Is it being addressed? It should be," Houghton said. "And if it's not, then someone needs to open their eyes and recognize this is a big issue."