Two families living in a duplex in Hampton now have less than 30 days to move out, according to eviction notices stuck in their doors on March 31.
The day before, they told their property manager that they would not accept rent increases that would take their rent from $700 a month to $900 for one unit and $1,000 for the other, effective of August 1.
These increases would be well above the 3.8 per cent rent cap announced by the New Brunswick government on Budget Day, March 22.
Bill 96, an act to amend the Residential Tenancies Act, was introduced on March 29 and is widely expected to pass. When this happens, it will apply retroactively from January 1 and will be in effect until December 2022.
Jennifer Taylor thought that meant she could safely refuse to pay a nearly 30% raise.
Instead, she received an eviction notice telling her that her Hampton apartment is being converted to an Airbnb starting May 1.
“Now we have to start packing our bags and looking for somewhere this affordable,” said Taylor, who lives with her two teenage children.
Michelle Cheslock, who lives on the other side of the duplex, told a similar story. After saying no to a change in rent from $700 to $1,000, she also gets evicted.
The building at 27-29 Acadia Cres. changed hands in December.
According to Service New Brunswick records, the buyers are Kevin Hagerman and Isobelle Reid Marianne of Huntsville, Ontario. They paid $325,000 for the property, which is valued at $179,500.
Taylor said she received her first rent increase notice almost immediately, asking for an increase to $1,000 a month starting April 1.
Then the province amended the Tenancies Act, requiring landlords to give six months’ notice of increases.
Then, last month, the province promised more rent control, with a cap of 3.8%.
Taylor said the property manager tried to persuade her to ignore that cap and voluntarily pay more.
She said she received a phone call on March 30 from Karen Sharp, president of Leading Edge Property Solutions.
“She calls and says, ‘I’m sure you’ve heard of the rent cap in the province. It will only allow us to raise the rent by $25, but it won’t work for the landlord,'” Taylor said. .
“So she asks me if I would be willing to pay $900 a month starting in August? I said, ‘No’.”
The very next day, an eviction notice was stuck in his door.
Sharp did not grant an interview. Instead, she referred CBC News to its chief commercial officer, Alex Urosevic, who said he had Hagerman’s permission to speak about the situation.
Urosevic described Hagerman as an honorable man who was taken by surprise by a government decision that suddenly made his investment in Hampton unsustainable.
“If this gentleman had bought his property after the law was passed, I would say, ‘Well, you’re on your own,'” Urosevic said. But that wasn’t the case, he said, and with the cap, his customers’ numbers suddenly didn’t work.
That’s why he decided to “change his business model,” Urosevic said.
“What he’s going to do is turn all the units into short-term rental units. These will be short-term units that people can rent out whether they’re on vacation or in town for business. He doesn’t ‘There will be no limit on their ability to stay a week or a month or three months or if someone needs to stay longer.’
Taylor said she still believed there was something that could stop this.
She thinks it could be zoning.
Airbnbs are not explicitly listed in Hampton’s bylaw definitions.
Currently, 27-29 Acadia Cres. is zoned residential, according to city building and development officer Arthur McCarthy.
Lodgings, which are defined as hotels, motels, bed and breakfasts and other traveler accommodations, are only permitted in commercial areas of Hampton.
McCarthy said the landlord could apply to council for a rezoning, which could take three to six months.
“Everyone does it”
Urosevic said the province was wrong to blind buyers with a rent cap that had previously been rejected.
In May, a review of the province’s rental housing market ruled out capping rent increases in all but the most extreme cases.
He said he knows buyers who back out of deals because of the surprise.
He also knows of buyers who acquire a property anyway, with “the full intention of evicting the entire building and doing so-called reno-victions”.
“Everybody does that,” he said. “I can tell you about 20 properties that are doing this because their hands are tied behind their backs. [by this cap].”
Urosevic said Hagerman plans to make major upgrades to his property that could top $100,000. This includes spending $35,000 on a third unit to make it livable again. Urosevic said he was left in fairly rough condition.
He said three-bedroom units with a private yard, private parking and laundry facilities in this part of Hampton are expected to fetch $1,200 on the market.
Landlords can end Airbnb rentals with proper notice
Cheslock and Taylor said it wasn’t the rent when they moved in and they expected the promised protection to apply.
Both contacted the rental company for advice, but by Friday Cheslock had not heard at all and Taylor was waiting for answers.
CBC asked to speak to the province’s residential tenancies manager, Jennifer Bernier, but she was unavailable.
In an email to CBC, a spokesperson for the department wrote that Airbnbs do not fall under the Residential Tenancies Tribunal Act because they are not rented or leased as residences.
“Under the provisions of the law, landlords may terminate rentals if they intend to convert the property to Airbnb, provided proper notice is given to tenants,” the spokesperson wrote.
“For month-to-month leases, the landlord must provide one month’s written notice, and for year-to-date leases, the landlord must provide three months’ written notice.”