Gordon Nelson Investments Drop Appeal Of Seafield Supreme Court decision overturning RTO’s 38% rent increases

FOR IMMEDIATE RELEASE

Gordon Nelson Abandon Appeal of Decision Denying them a 38% Rent Increase

Residents of the Seafield Apartments learned yesterday that landlords Gordon Nelson Investments dropped their appeal of Madam Justice Loo’s Supreme Court decision denying them a 38% rent increase.

This is a big win for all renters in Vancouver and BC at large as the decision, which now goes unchallenged, helps to clarify the law around geographic area rent increases.

The decision shows that landlords aren’t entitled to an additional rent increase simply because a couple of tenants pay higher rents in a similar unit; Dispute Resolution Officers must look at all the evidence about the whole market for similar units in the same area, not just the evidence dealing with a few higher rents.

Justice Loo also expressed doubt that the rent increase legislation is meant to let a landlord use the higher rents it is getting for newly rented units to bootstrap up the rent in other units in the same building.

While this is a major win for Seafield tenants too, the case is still supposed to be reheard at the Residential Tenancy Office (RTO), which adjudicates disputes between landlords and tenants under the Province’s Residential Tenancy Act. Residents have not been informed of any hearing date.

Background

Jason Gordon and Chris Nelson of Gordon Nelson Investments filed an application for a rent increase at the Seafield of up to 73% in January 2009.

The pair made their application under the additional rent increase section of the residential tenancy act.  This section allows landlords to receive a higher than normal annual rent increase if they can show that residents in their building pay significantly lower rents than those in similar buildings in the same geographical area. (The normal increase for 2009 was 3.7%.)

Despite the breadth and quality of the tenants’ evidence, Dispute Resolution Officer K. Miller of the RTO did not consider the tenants evidence and granted Gordon Nelson Investments a 38% rent increase in April 2009.

Seafield residents applied for a Judicial Review of the 38% rent increase in August 2009, and the Supreme Court of British Columbia set aside the RTO’s decision because it was found to be “patently unreasonable” in January 2010.

Residents at the 14-unit apartment building in Vancouver’s West End have been pressured by Gordon Nelson Investments since the former Bodog executives purchased the building in the summer of 2008.

All original tenants in the building are still living in their apartments, despite more than a year and a half of threats to their ongoing tenancies.

West End Renters Triumph Against Landlords

NEWS: West End renters triumph against landlords

Source: The Westender
By: Jackie Wong
01/21/2010 12:00 AM

After more than a year of tenant-landlord conflict, residents of the West End’s Seafield apartment building were relieved last week to learn that the rent increases applied for by their landlords were overturned by the B.C. Supreme Court. The January 12 judgement by Supreme Court Justice Linda Loo called the landlords’ application for 15- to 38-per-cent increases in the 78-year-old building “patently unreasonable.”

A B.C. Supreme Court judge declared it “unreasonable” that the landlords of the West End’s Seafield apartment building (pictured) applied to increase rents by up to 38 per cent. Credit: Jackie Wong

Madame Justice Loo ordered the landlords — a brother-in-law duo who own Gordon Nelson Investments, a property management firm that purchased the Seafield in summer 2008 — to refund tenants the difference of the increased rents they had paid since April 2009, the month in which a dispute-resolution officer at the B.C. Residential Tenancy Office (RTO) controversially approved Gordon Nelson’s application for the increases. The landlords argued the increases would bring the Seafield, a 14-unit building located at 1436 Pendrell Street, up to market value.

The Seafield’s close-knit community of long-term tenants banded together to bring the dispute before the Supreme Court in November 2009, in the hope of drawing attention to what they and other tenants’ rights advocates saw as unfair legislation.

Seafield tenants will likely start receiving refunds in the form of deductions on upcoming months’ rents, although this has not been confirmed. But the tenants aren’t sure when or if they’ll be back in court, in the event that their landlords appeal the judgement. Property manager Chris Nelson told WE in an e-mail that he and Gordon Nelson Investments partner Jason Gordon will make a decision within the 30-day time frame allowed for appeal.

A statement on Gordon Nelson’s website says the company is confident that the Seafield rent increases will be restored in a re-hearing or “quite possibly result in a larger market-supported rent increase, as rents in Vancouver and the West End have continued to increase in the face of tough economic times.”

A representative from the B.C. Ministry of Housing and Social Development, who asked not to be named in this article, told WE the ministry is currently reviewing the Supreme Court decision, and that a new hearing will be scheduled in the near future.

The rent-increase issue is the last in a long line of disagreements between Seafield tenants and Gordon Nelson Investments. In fall 2008, WE reported that Seafield tenants felt threatened by Gordon Nelson’s intimations that tenants would be evicted to make way for building renovations. “After only a month of living here, I was being told I was going to get kicked out of my own home,” recalls Seafield tenant Melissa Mewdell. “I had no idea what to do about it. If these guys weren’t around to help me,” she adds, gesturing to her neighbours, who have supported each other through the conflict, “I probably would have left.”

Even though the disputes have resulted in Seafield tenants becoming extremely well versed in residential tenancy procedure, the lack of transparency they’ve experienced at the RTO has been troubling, says Mark Moore, who lives at the Seafield with his family. “You can’t find out how many of these cases there are [at the RTO]. You can’t find out how they were decided. There are no transcripts kept of any hearing. If this is where things are going to be adjudicated… it would at least be nice to know what’s going on here. This is notwithstanding the fact that we never know how many people are evicted who never go to the RTO because they don’t complain.”

Vancouver-West End MLA Spencer Herbert has been working with Seafield tenants and other local renters during their lengthy struggles with the province’s residential tenancy system. As part of efforts to resolve what he sees as gaps in B.C.’s Residential Tenancy Act that leave long-term renters vulnerable to unfair rent increases, Herbert brought forward a private member’s bill in November 2008. It has not yet been reviewed in the B.C. Legislature.

“I really hope that Housing Minister Rich Coleman will look at [the Seafield] decision and will look at the evidence, which is piling up, and decide that the Residential Tenancy Act needs to be reformed,” Herbert says. “B.C. renters owe a huge debt of thanks to the Seafielders for their perseverance, but think about the huge number of people out there who don’t have those resources, who don’t have that sense of community to support each other.”

Seafield Tenants win at BC Supreme Court – Landlord Denied 38% RTO Rent Increases

Seafield Tenants win at BC Supreme Court –Gordon Nelson Investments Denied 38% RTO Rent Increases and Ordered to Refunds  Tenants

January 13, 2010
Sharon Isaak

The Seafielders and BC renters won a monumental victory at the BC Supreme Court today. Madame Justice Loo’s decision overturned the RTO’s decision giving 15-38% rent increases to the Seafield’s new owners, Gordon Nelson Investments Inc,  and ordered refunds  of  the   additional rent increases the tenants have already paid resulting from the RTO decision.

In April 2009, Dispute Resolution Officer K. Miller delivered an unprecedented RTO decision ordering up to nearly $500/month increases to some tenants at the Seafield.  The DRO’s decision was based only on several higher priced units chosen from the landlord’s evidence, and she refused to consider the tenants extensive evidence showing their units were priced similarly to other comparable units in the same geographic area, and in line with current CMHC guidelines for average rents in the area.

However, BC Supreme Court Justice Loo disagreed with the DRO’s decision, and overturned it based on patently unreasonable errors in law and fact. The DRO’s refusal to consider the tenants evidence was at the heart of the appeal. The matter is remitted back to a new DRO at the RTO for another hearing.  This is not the first time DRO K. Miller’s decisions have been overturned at Judicial review on this very issue of additional rent increases.

The BC Residential Tenancy Act limits yearly rent increases to 3.7% in 2009,  except under a relatively new 2004 RTA Regulation that allows landlords to apply for additional rent increases in a geographic area on units “significantly” below rents in the area.  Soaring rents over the last three years have triggered some landlords to use this clause as a way to catch up  longer term renters to peak market values in an area and get around yearly  rent increase limits, which was not the intent of the regulation.

This is a huge victory and the first bright light for BC renters since the Berry Court Decision in 2007 overturning DRO K Miller’s Renoviction decision at Bay Towers.  It means a landlord doesn’t just get a free ride to to leverage the “Geographic Area Increase  clause for easily obtained and exorbitant market rent increases based on a few top priced rental units in the area as evidence.  Tenants will now have a stronger legal leg to stand on if they fight similar additional rent increase cases at the RTO.

BC Renters owe a large debt to the Seafield tenants, who have lived under extreme stress since the building was bought by Gordon Nelson Investments over a year ago, and yet had the courage, determination and support, to see this case through to the Supreme Court of BC.

The four key points overruling the RTO decision are:

• That the Dispute Resolution Officer (DRO) “failed to comply with the statutory requirement” by not considering the Tenants’ evidence. Madam Justice wrote: “…the Officer must consider the Tenants’ relevant submissions. It defies common sense to imagine an affected tenant…would make a submission showing that there are rental units that attract higher rents.”

• That the DRO was “patently unreasonable” in awarding the landlord an above normal rent increase when the landlord had only two “comparable” units demonstrating their case. (In contrast, our evidence – which was disregarded – contained scores of comparable units, in some cases even identical, at similar or lower rents). She wrote: “…it is doubtful that s. 23(1)(a) requires merely two comparator units.”

• The DRO made an error of law by basing her analysis on rents before (rather than after) the regular annual rent increase (3.7%) permitted under the law;

• The Judge concluded that “the officer made a patently unreasonable factual error” when the DRO granted the rent increase based on apartments that were not, in fact, comparable to units at the Seafield by her own admission.

Conference calls no way to settle tenant-landlord disputes

Easy to get that disconnected feeling:
Conference calls no way to settle tenant-landlord disputes

By Jon Ferry, The Province
December 16, 2009

It’s cold, it’s hard to get work and it’s tough to find an affordable place to rent these days, particularly in Metro Vancouver. Which is why the government must do all it can to ensure tenants aren’t being gouged.

When landlord-tenant disputes arise, B.C.’s housing ministry is supposed to resolve them through prompt and fair hearings, not leave either party on hold.

The trouble is, the vast majority of these hearings now are done by telephone conference call. And that, according to Vancouver-West End NDP MLA Spencer Herbert, is causing numerous problems — for seniors, the hard of hearing, those with limited English or those who simply get lost in the phone system.

“In some cases, they have called in at the appointed time, but have never been dialled through to the case, leading to their case being dismissed,” Herbert told me. “In many cases, the people I have spoken with have just given up or accepted rulings that might have been thrown out, had they had a fairer and more even process.”

Some landlords also find the conference calls frustrating. But it’s usually the tenants who come off worse, especially if they’re battling big property owners with seasoned staff.

Vancouver housing advocate Leslie Stern, who’s just been evicted from the False Creek townhome she has lived in for 25 years, says telephone hearings are impersonal and mechanical: “Everything seems biased towards a developer or a landlord who has staff and means.”

And Sharon Isaak, co-founder of the tenants’ rights group Renters at Risk, stresses they can be very confusing. “They say they’re making it streamlined, but it’s not,” she said, adding it’s nearly impossible for tenants who want a face-to-face hearing to get one.

Vernon mom June Ross, though, took on the system and won. Her 2007 application to recover money owed her by her landlord was initially dismissed by a dispute-resolution adjudicator on the grounds she’d failed to show up for the arranged telephone hearing.

That decision was upheld by a second adjudicator, but later dismissed by the B.C. Supreme Court.

The court found Ross had, in fact, followed instructions and had stayed on the line until it simply went dead. Indeed, Justice Joel Groves ordered the dispute to be reheard because the two adjudicators had “breached the rules of natural justice.”

Justice Groves said it was certainly not the first time in his experience that this type of problem had arisen, and he urged the Residential Tenancy Branch to provide a separate line for those experiencing call problems.

The B.C. housing ministry told me it appreciated both the court’s decision and its recommendation regarding hearing procedures. A spokesman said: “We do treat the process seriously.”

Well, if that’s the case, the ministry should make it seriously easier for folks to attend hearings in person — and not just at one Lower Mainland location.

Basic fairness is being compromised here. And tenants, as well as some landlords, are being left out in the cold.

© Copyright (c) The Province

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West Enders lose rental hike dispute

A group of West End renters are seeking a judicial review after the Vancouver Residential Tenancy Branch ruled in favour of their landlord’s request to hike their rents 38 percent.

“We’re very disappointed and that’s an understatement,” says Seafield tenant Tim Pawsey. “It’s a huge amount of money [and] I haven’t really absorbed it [the ruling] yet.”

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

Pawsey, who has lived at 1436 Pendrell St for 30 years, says the public was not immediately informed of the Apr 7 decision due to legal processes. He says he can’t comment further on the decision since he and his neighbours are now seeking a judicial review.

“This decision, if it stays as is, effectively means the end of any sort of rent control in BC,” says gay Vancouver-Burrard MLA Spencer Herbert.

“It’s pretty shocking but this is the legislation that the BC Liberals brought in and it has been used by landlords to hike rents like we said it would,” adds Herbert, who is running for re-election with the NDP in the new Vancouver-West End riding May 12.

Herbert says the RTA decision reflects an unbalanced Act full of loopholes that benefit landlords.

“This decision is bad because it is based on bad legislation,” says Herbert. “This kind of thing shouldn’t be happening.”

“It’s Christmas every day for landlords now,” Stephen Hammond of RentersFightBack.com said in a statement.

“It’s just a matter of time before every BC landlord applies for excessive rent increases, and thanks to Gordon Campbell, they’ll get it,” he predicts.

“Gordon Campbell doesn’t give a crap about renters, and it’s time we mobilized to fight back and kick him out,” adds Christine Ackermann, also with RentersFightBack.com.

If the ruling is allowed to stand, the Seafield tenants are looking at a 38 percent rent increase as of Aug 1.

But the building’s owner, Gordon Nelson Investments, says the rental hike still isn’t enough.

“We are disappointed that we didn’t receive the full amount, but we respected the process,” says co-owner Chris Nelson.

The Nelson and his business partner Jason Gordon had asked for rent increases of up to 70 percent for a two-bedroom suite.

Herbert introduced a private member’s bill in the BC legislature last November to eliminate the section of the RTA that allows landlords to raise rents above the allowable limit to the market value in a particular area.

He says the only way the RTA will be balanced is if the BC Liberals are overthrown at the ballot box May 12.

“The landlords have tried to use any means they can. The BC Liberals have been pretty clear about not changing the RTA,” Herbert told Xtra West in March.

“I think the RTA is the only tool we have to ensure tenants rights are protected,” retorts lesbian Liberal candidate Laura McDiarmid, who is running against Herbert in Vancouver-West End.

“We need to be fair to everyone,” McDiarmid says. “If the RTA has loopholes, it is like any other act. It is fluid and needs to be revised.”

McDiarmid says she would have to review the current RTA before commenting on what changes, if any, are needed to existing RTA legislation; something she promised will happen if she wins the Vancouver-West End seat.

Herbert says the NDP has reviewed the act and are ready to reform it. “If we form government we will change the law to make sure we have balance between landlords and tenants,” he promises, adding that BC renters need to take an active stand against uncontrolled rent hikes regardless of who gets elected.

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