A Vancouver landlord has been ordered to refund tenants at a West End apartment building after a B.C. Supreme Court judge overturned an almost 40 per cent rent increase.
Justice Linda Loo found that a decision by the Residential Tenancy Office (RTO) to allow landlords Gordon Nelson Investments to raise rents at Seafield Apartments in April 2009 by 38 per cent was "patently unreasonable."
Provincial guidelines dictate rents can only increase four per cent a year but the RTO ruling saw some rents jump by $471 a month because of a clause in the Tenancy Act that allows landlords to raise rents to that of comparable suites.
Tenants at the Seafield, a 14-unit heritage building on Pendrell Street, were rocked after their new landlord demanded rent increases of 52 to 73 per cent six months after taking possession of the building in July 2008.
The RTO cut that back to between 15 and 38 per cent for 11 of 14 units.
Loo ruled some of the decision was unseasonable because the Dispute Resolution Officer didn't look at enough comparable apartments or properly consider submissions from affected tenants.
The management company must now return all of the additional rent collected after the decision.
Sharon Isaak of Renters at Risk, a legal advocacy group helping renters, is thrilled with the decision.
"It's such a relief for B.C. tenants to see that Seafield tenants got justice in the courts. A 38 per cent rent increase is completely unfair," she told ctvbc.ca in a telephone interview.
Isaak, herself a renter in the area, said the ruling is a clear message that the clause in the Residential Tenancy Act is not meant to be used for landlords hoping to increase rent for existing tenants.
"When a tenant enters into a rental contract they expect to pay a certain amount for rent," she said.
"For a legislator to allow an increase so huge would effectively end rent control in the area."
Vancouver-West End MLA Spencer Herbert, who has long championed rental rights in the area, called Wednesday's ruling "a victory for renters."
The longest standing tenant at the Seafield, a 92-year-old man, has lived in the building since 1961.
Chris Nelson of Gordon Nelson Investments called the decision "very disappointing" and that the company hasn't yet decided whether to fight the decision.
"It's certainly been an arduous process for all of us."
Nelson said the arbitration process has made relations strained between the tenants at Seafield and the management company.
"They hung effigies of us outside at Halloween so, yes, it's sort of awkward. We're all sort of not getting along."
The longest standing tenant at the Seafield, a 92-year-old man, has lived in the building since 1961.
In a statement, B.C.'s Housing Ministry said it is reviewing the court decision.
