N.S. housing crisis: How the fixed-term lease ‘loophole’ can be ‘easily abused’

Advocates are raising concerns about the use of fixed-term leases in Nova Scotia as the province grapples with the ongoing housing crisis and rock-bottom vacancy rates.

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Unlike periodic leases — such as month-to-month or year-to-year — fixed-term leases have beginning and end dates, which means they do not automatically renew.

While fixed-term leases are useful in some situations, Mark Calligan, a community legal worker with Dalhousie Legal Aid Service, said they “can be easily misused by bad landlords.”

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“Since the landlord can elect not to enter into a new fixed-term lease at the end of the old one, they don’t have to explain why they don’t want to rent to a tenant,” said Calligan. Interview.

“Unfortunately, tenants don’t have much recourse in those situations because the landlord is under no legal obligation to enter into a new lease.”

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Fixed-term leases for landlords could be one way to eliminate the temporary two percent rent limit imposed by the Nova Scotia government in 2020, as the limit does not apply to new tenants.

While he did not have exact numbers, Calligan said he has seen a “sharp” increase in the use of these leases since the pandemic began.

Calligan said Dal Legal Aid has also seen “a number of situations” in which tenants have been pressured to convert their periodic lease to a fixed-term lease, often when ownership of a building is changing hands.

“Landlords are not allowed to change the type of lease,” he said. “They have no right to request that you change or change the terms of the contract.”

He added that Nova Scotia is one of the only provinces with rent controls that doesn’t even have the extra security around fixed-term leases.

In BC, for example, landlords are required to give tenants a new lease at the end of their fixed-term lease, unless the landlord or a close family member plans to move into the unit.

“I would advocate for Nova Scotia to adopt this model,” he said.

Calligan said fixed-term leases have been an issue for a long time, but they have become a “special problem” since rent caps were introduced.

“Indeed, landlords have every incentive in the world to raise people’s rents, and are trying any trick they can find to raise those rents,” he said.

“This is a very obvious loophole in the law, and we have repeatedly brought this problem to (the government), and to previous governments, and there is a lack of action on this issue.”

Halifax Needham legislator and NDP housing spokeswoman Suzy Hansen says she gets at least one or two calls a week from constituents who are concerned about their fixed-term leases.

“It’s really, really frustrating because people were really nervous about this particular type of lease, because there were no guarantees. It was stressful for them,” she said.

With 15 months left in Nova Scotia’s temporary rent cap, Hansen said many tenants are feeling fear and uncertainty about their living conditions.

“As we know now, things are really expensive, people are struggling, so there is concern about whether or not they can afford to stay where they are,” she said.

While the NDP is pushing to make the temporary rent cap permanent, Hansen said more measures are needed to close the loophole.

During the fall of the 2021 legislature, the party introduced the Rental Fairness and Affordability Act, which, among other things, tied rent increases to units rather than tenants, so there would no longer be any incentive to get rid of old tenants.

The bill would also link allowable rent increases to the consumer price index, and require the landlord to make a specified capital expenditure, or add new services, in exchange for a further increase in rent.

Hansen said the bill would help level the playing field between landlords and tenants.

“I think it has to be a balance, because you can’t only have security for one and not the other, or not enough for each,” she said. “And it should be something that is good enough for all renters and landlords.”

Ultimately, the bill did not pass in the legislature, but Hansen hopes to see it again, along with similar legislation.

“We will continue to propose some more bills, especially on permanent rent controls,” she said.

Fixed-term leases ‘have always been an option’

Kevin Russell is executive director of the Investment Property Owners Association of Nova Scotia (IPOANS), which represents the interests of residential investment property owners.

In an interview, Russell declined to comment on the prevalence of fixed-term leases in Nova Scotia and the landlords reportedly using them to get around rent limits, saying he doesn’t think it will do so without further data. will be responsible for issue.

“Fixed-term leasing has always been an option available to rental housing providers, and there is no data available to support the observations that there has been an increase in the use of fixed-term leases,” he said.

Obtaining such data would be difficult, as Dal Legal Aid does not have a sufficiently sophisticated tracking system, and there is no official registry of rental units in Nova Scotia. While IPOANS runs its landlord registryIt does not state what types of leases are being offered.

Russell said fixed-term leases make rental housing more accessible to those without a rental and credit history, such as refugees, new Canadians, students and new renters.

“If it weren’t for fixed-term leases, this…

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