A B.C. landlord was denied their request to increase tenant rents by over 50 per cent in a single-room occupancy (SRO) building.
The landlord applied for dispute resolution with the BC Residential Tenancy Branch (RTB) to "impose a 49.5 per cent increase in rent, in addition to the 3.5% annual rent increase permitted by the Regulation."
Under British Columbia law, landlords may increase rent above the allowable limit in some situations, including an extraordinary increase in operating expenses.
The landlord in this dispute said they struggled with budgeting operating expenses in the unidentified SRO building, owned by a not-for-profit society. Rent no longer covers the cost of utilities, taxes, HVAC, and mechanical issues, the landlord claimed.
While the landlord hasn't changed any of the services offered at the building, janitorial costs increased to handle pest control issues, former tenants leaving their units in poor condition, and the removal of excess junk from the property, according to the dispute documentation.
The RTB asked the landlord’s agent to clarify how the requested increase of 49.5 per cent was calculated and they said it "was reached 'with accounting' and they are trying to project for future increases in costs."
Tenants claim the building was poorly managed
The tenants who responded to the RTB hearing pay between $425 and $570 monthly rent.
The renters opposed the landlord's application, noting that the "expenditures are rising due to poor management and the weekend janitor is paid for eight hours" and only stays for a few minutes. They also said allowable rent increases within the annual amount "would be agreeable and affordable" but the opposed change would be unaffordable.
The tenants also claimed units in the property were left vacant for months at a time, "while other occupants have been allowed to stay without paying rent for up to ten months."
Other renters said they performed unpaid work "by helping tidy up the breezeway and removing garbage when left behind by vacating tenants."
The landlord hasn't issued any rent increases in recent years but four new tenants each pay $650 per month.
The RTB ruled that the landlord failed to meet the requirements in Policy Guideline 37D for an additional rent increase for expenditures.
While the landlord claimed that property taxes, water and sewer, gas, and janitorial services, increased by an extraordinary amount, the RTB found "the only costs which could reasonably be said to have risen in a manner even approaching 'extraordinarily' are the water and sewer costs, and janitorial services."
Water, sewer, and janitorial services increased by $22,925.00 in the three years before the application and the total annual rent paid by the tenants was $159,960.00; a 14.33 per cent increase in rent would cover the rise in these costs, the RTB noted.
The landlord's operating costs also dropped from 2021 to 2022 by $32,905.00 and the Landlord has failed to impose any rent increases allowed by the Regulation in recent years.
The landlord’s application was subsequently dismissed in February 2024.
