Quebec rent hike proposals criticized by tenants, landlords

Montreal region has rising vacancy rate

Each year, Ted Wright sees the same pattern following the announcement of proposed rent hikes: phones ringing with panicked queries from owners; landlord and tenant groups issuing critical press releases; and talk shows debating whether the higher rates will cover inflation.

And when the media blitz is over, the real discussion over how much more Montreal tenants will pay in 2013 is set to begin, said Wright, coordinator of the Westmount Legal Clinic.

On Friday, the Régie du logement du Québec announced proposed rent hikes for 2013, setting off a chorus of denunciation from groups representing landlords and tenants at a time when the vacancy rate has crept up in Greater Montreal from 2.5 to 2.8 per cent, Canada Mortgage and Housing Corp. data show.

Despite objections that the proposed hikes are either “too high” or “too low,” Wright stresses that the proposed rates are only that — proposals.

Rent increases are actually set through negotiations between the landlord and tenant, taking into consideration everything from the rise in municipal taxes to insurance, to the owner’s execution of major repairs.

Homes in hot neighbourhoods like the Plateau are more likely to get hit with higher rent increases because rising property values have led to bigger tax and insurance bills for landlords.

“I think it’s a little calmer this year,” said Wright, whose clinic assists both tenants and landlords to better understand Quebec’s rental laws. “What needs to be in large letters is that ‘this is not one building in particular.’ The rental board suggestions are a starting point, or guide, and are not a definitive rent increase for any building.”

Quebec’s rental board has announced a 0.9 per cent increase in rents for buildings heated by electricity, a 0.2 per cent rise for buildings heated by gas and a 1.7 per cent rise for dwellings heated by fuel oil.

From Wright’s decades of experience, tenants can more typically expect about a two per cent rise in rents, but landlords “will often start at three per cent or four per cent and negotiate,” he said.

“I’ve seen cases where landlords can legally get a seven or eight per cent rate increase,” he said.

No sooner were the 2013 rates announced when a provincial association representing landlords, the Association des Propriétaires du Québec, blasted the suggested hikes as inadequate.

“We are once again denouncing the announced rates, which neither reflect the needs, nor the reality of the Quebec rental market,” president Martin Messier said.

Messier said the board’s rate of a 2.6 per cent hike for major repairs, down from 2.9 per cent in 2012 and three per cent in 2011, gives little incentive for landlords to fix up the city’s stock of rental buildings, which is not only aging but facing increased competition from new condos used as rentals.

“No investor wants to have a return on his or her investment in more than 30 years and this is in fact the case for major repair works undertaken by the owner of a Quebec rental property,” he said.

But Wright pointed out that these higher charges for repairs won’t suddenly be removed from future rents, even after the repairs are completed.

“Once all the major repairs are made, the landlord will keep the rent,” he said. “I’ve never heard of a tenant going and saying, ‘Now that the repairs are done, can you reduce my rent?’

“Landlords never mention that.”

Anti-poverty group FRAPRU said the proposed hikes are too high, pointing out that the number of cases filed to the rental board against tenants for not paying their rent hit a record in fiscal 2011-12, rising 3.2 per cent to 47,049, compared to the previous year.

“A large number of people and families are simply incapable of assuming the smallest hike in rent, without having to cut back in their other essential needs, or without running the risk of being evicted for nonpayment of rent,” said FRAPRU co-ordinator François Saillant.