3 min

BC Supreme Court rules in favour of Seafield tenants in rent increase dispute

RTO decision awarding 38 percent rent increase 'patently unreasonable' : Justice Loo

A year-long battle with their landlords has paid off for the tenants of one West End residential complex after the BC Supreme Court ruled Jan 13 to overturn a 38 percent rent increase imposed on tenants last spring.


The court also ordered the landlords to refund any additional rents paid by tenants as a result of the Residential Tenancy Office (RTO) ruling that allowed the increase.


Its absolutely brilliant! exclaimed renters’ rights activist Christine Ackerman, who called the ruling a bright light for BC renters.


Residents of the Seafield Manor became involved in a public fight to save their homes after the RTO ruled in favor of landlords Gordon Nelson Investments, permitting them to raise rents in the building by 38 percent following an arbitration hearing last April. Gordon Nelson Investments had originally asked for a 73 percent rent hike.


In the wake of the RTO decision, in which at least one tenant was served with an eviction notice, tenants applied for a judicial review of the decision in the BC Supreme Court and won.


In the judicial review, BC Supreme Court Justice Linda Loo found that the RTOs decision awarding the 38 percent rent increase was patently unreasonable.


The Residential Tenancy Act (RTA) allows landlords to raise residential rents by 3.7 percent annually. But under Liberal legislation, landlords can apply for an additional increase if they can prove the increase will put their units on par with the areas market value.


Justice Loo ordered that the RTOs April 2009 decision be overturned and the dispute sent for a re-hearing at the RTO.


Jess Hadley, lawyer for the Seafield tenants, says her clients are pleased.


Theyre relieved and theyre glad that this judge has applied the law properly and struck down the rental increase, she told Xtra West, adding that tenants are expected to receive their rent reimbursements as soon as next month.


In a written statement, Hadley adds that tenants are particularly happy to have created a legal precedent that will guide decision-making in future rent increase cases.


One of the best things about this decision is the message it sends that just one or two higher rents, in the context of a market where most tenants are paying equal or lower rents for a similar unit, wont justify a rent increase, Hadley further states.


Chris Nelson, who owns the building with his brother-in law, Jason Gordon, says hes disappointed with the ruling.


We are surprised because we felt like it was a reasonable outcome, he says, referring to the RTO ruling permitting a 38 percent rent hike rather than the 73 percent Gordon Nelson Investments had requested.


We look at it humbly, he says. They [tenants] pay roughly 50 percent of market value, he insists. Thirty-eight percent [was] not a bad outcome for them.


But those who lobby for tenants rights disagree.


BC renters owe a debt of gratitude to the residents of the Seafield building, says NDP MLA Spencer Herbert. So many buildings and so many people give up [their fight for tenants rights] but the Seafield tenants have shown that if you organize and stand up for yourself you can win, he adds.


Kudos to the Seafield residents, Ackerman says. We finally have a leg to stand on in regard to the geographic rent increase clause of the RTA.


But while the Supreme Court ruling is a positive step toward RTA reform, the struggle regarding geographic rent increase is far from over, adds Herbert, whose defeated private member’s bill introduced last year was aimed at closing loopholes in the Act that permit rent hikes based on geographic marketability.


The struggle continues, Herbert acknowledges. Gordon Nelson can apply [to the RTO for a rent increase] again until the law is changed, he said.


Gordon Nelson Investments say no decision has been made regarding whether they will pursue a re-hearing of the matter at the RTO or appeal the Supreme Courts ruling.