In a press conference Wednesday about proposed legislative changes, Colton LeBlanc, the provincial cabinet minister responsible for the Residential Tenancies Act, said his government will extend Nova Scotia’s current rent cap through the end of 2025, and raise the cap on rent increases from 2% to 5% starting Jan. 1, 2024.
When asked about landlords exploiting fixed-term leases to get around the rent cap, LeBlanc told the gathered reporters that the extra 3% landlords could charge starting in January should fix the fixed-term loophole. The problem, according to LeBlanc, was that the cap was too low.
However, if a landlord wants to make as much money as possible on a rental unit, they are still able to sign a fixed-term lease with a tenant, and then jack up the rent on the next person who rents that unit—even if that’s the current tenant. When The Coast reported this on Oct. 17, 2022 a residential property manager told The Coast: “Due to changes in the Tenancy Act, the industry has moved away from month-to-month leases and moved to fixed term so that both tenants and owners are on equal footing in regards to the terms and options of the lease.”
Did you catch that? The appeal of fixed-term leases isn’t money, it’s power. A fixed-term lease in Nova Scotia has a lot of benefits for a landlord. Not only do fixed-term leases allow landlords to circumvent the rent cap, but it means tenants have no legal right to stay in a unit at the end of a lease.
Periodic leases, the ones that typically last for a year and then roll over into month-by-month, provide tenants with legal protection under the Residential Tenancy Act. Fixed-term leases have no such tenant protections. So on top of fixed-term leases allowing landlords to bypass the rent cap, it also means landlords are less likely to have a prolonged legal battle with a tenant they are trying to evict.
Essentially the problem with this legislation is the complete lack of incentive for landlords to stop using fixed-term leases and adhere to the rent cap. Can you imagine a military operation being planned assuming the enemy would just voluntarily not exploit a glaring, publicly known critical weakness? This is the legislative equivalent of that type of naive planning.
LeBlanc told reporters fixed-term leases have a role when used appropriately, and that he hopes increasing the rent cap to 5% will stop landlords from exploiting the loophole his government left open, which will continue to allow landlords to use fixed-term leases with little to no consequence.
The good news for residents of Halifax is that unlike provincial ministers, the city’s director of housing and homelessness, Max Chauvin, lives in the real world. And he warned council that if the province gets rid of the rent cap, a COVID policy which had been due to expire at the end of 2023, the city would have to figure out how refugee camps work. Today’s announcement doesn’t eliminate the rent cap until 2026, but it also does nothing to make landlords adhere to it.
We should start planning for refugee camps.