What is fairness and Fair for Whom? – Series of Stories of Owners & Tenants

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I bought my 3-plex in July 2007. 3-plex means that I have 2 tenants.  One tenant had been there for 11 years and the other 4 years and their rents were very low. Usually, the new owners would take one apartment with low rent back for themselves, but for my case, I need the bigger place for my son and my business. One family quit their unit before I became the owner.

The other tenant was a 60 years old retired woman who had been there 11 years. According to the Rental Board of Quebec ( Rental Board – Site de La Regie de Logement), the increase of rent is allowed by percentage corresponding to the factors of tax increase, inflation rate, management costs & renovations proceeded. It is the 2nd year after the city property tax increase and the roof was redone in 2004, windows and doors are 10 years old and the property is generally in good condition. But obviously there was no important rent increase for both tenants in the history of leases included in the purchasing documents and the property was sold more expensive than the city evaluation. Both of the tenants had protested against an increase proposal of 7 dollars and paid an increase of 2 dollars for the year before I bought it!  I, as the owner who has the obligations to expensive mortgage payments, property and school taxes, insurance and the conditions of the building,  find it unfair to keep the rent so low for me.

As we know, the real estate in Montreal soared drastically up after 2000. The price of a single house with a living area of 1,500 square feet, land area of about 6,000 sq.ft and double garages rocketed from 120k in 2000 to 360k in 2007. That of a 6-plex from 120k to 450k as well, which is almost 4 times in 7 years! The drastic increase of value in the real estate in Montreal in general is due to the fact that it had been low all those years after the down fall of economy in the late 80s and early half of 90s when Quebec was fighting for their independence, scaring off the English or non-French investors in Quebec to English speaking provinces such as Ontario and BC.

The increases of value in properties had created a conflict between the owners and the tenants in which the owners have the steeply increased obligations and henceforth bigger risk and the latter continuing paying low rent because of the time delay in adjusting the regulations in order to reflect the fairness for both sides in the drastic changes. If the owners didn’t have their own houses before buying the plex, they could occupy one or 2 units with the lowest rents, depending on how many adult kids they have or if they have spouses or parents on their charge in this family ( Law for unit repossession). The owners of course will fight for their interest and the tenants will do the same. In Montreal where there used to be more than 80% of tenants and only less than 20% owners, The Rental Board has detailed rules preventing the owners from doing whatever they want to the tenants. For the owners, they have CORPIQ to help them ease their headaches! Nevertheless, the 2 organizations can just do so much for each side leaving many owners and tenants sort out their own problems. The result is usually either owners give in, leaving alone the low rents or paying extra money besides the 3 months rent loss driving the bad tenants out, or the low rent tenants have to move out knowing that the repossession is not all the time for their family members than just seeking this fairness for themselves.

The now 62 years old tenant is not a bad tenant. She pays her rent on time and she is very quiet. But she is paying a way too low rent! She has been there very long and she likes to stay not only for the low rent, but also for the nice environment ( nice neighborhood, 30 seconds to St-Laurent River and Riverside park). I should agree to her argument, but she didn’t agree with me for the 50 dollars raise of rent, not even 25 dollars. I had been trying to raise her rent to a reasonable level for me thinking that this ” BIG” rent increase could have kept her there in her comfortable corner where she can continue enjoying watching the neighbor’s girls playing in the pool, sitting on the front balcony watching the river flowing by and I will feel a bit better watching my big bills being thrust in through my door every month! Well, she really was hard headed and not smart even though I took my time and intelligence in letting her know that she could have saved 203 per month together with all the trouble and expenses moving if she had to leave. She still enjoyed telling me that she doubted my incentive of taking her unit back for my family and still thought that she could stay there paying a rent of 225 lower than the market level.

I accepted her 7 dollar raise for last year because I passed the delay in giving her the repossession notice. This year, it will be the end for her. Not that I need this increase bad, but that it is unfair for me. I have a son who is 20 years old and I have the very property reason for the Board to let her leave. I don’t feel bad at all because I had tried being considerate for her and at the same time have been respecting my obligations and hard working as a tax payer in Canada. I sent her the notice 6 months and 25 days ahead stating the repossession for my son or my visiting my parents and I got the refusal from her naturally 10 days after. I consulted CORPIQ and the consultant told me to send her a modification correcting that the repossession will be for my son uniquely and canceling the previous notice because my parents are not coming this year, but mostly because, according to their experience ( jurisprudence), if the reason is not clear for the right persons ( my visiting parents would not be the right persons), then the Board could refuse my request and let her stay. So this time, I knocked on her door and she signed the Accusé  de Reception as a proof that she has received my modification within the legal delay. Next I have to send a letter to the Board within 30 days upon receiving her 2nd refusal letter.

As of the relationship with her, I will quote what she told me in person last year after telling her my intention: “Vous etes parlable”. She was comparing me with my previous owner-a 78 years old woman with 4 daughters who were not ” parlable ” obviously. She is right. Usually, if the owners want to drive their tenants out, they would not be ” parlable ” to their tenants. They would just send the letters without any problem! But I figured that she had been here 12 years and she looked like a reasonable person, so I should try to find the balance myself first before bringing it to the Board. I respected my obligations to clean the stairway whenever it snows, put rubber mattresses for us and her to be safe; I helped her with her wine cases up the stairs and she offered me one bottle for my help( of course I didn’t accept!). When I gave her my 2nd letter, I could see that she was a bit regretful, but I could not go back in negotiating the raise anymore. It was too late. In the end, I told her that I will let the Board decide. Both of us will have to accept whatever decision of the board. We have been in pretty good relation despite of all these unpleasant disputes…

Soon, I will send my request to the Board. If she can stay, hard luck for me! If she has to leave, then for her! But I couldn’t help thinking that it is inflexible and impractical of her and eventually inconsiderate of her for me not to have accepted my 25 dollar proposal and the law is just a tool to help people find the balance among all kinds of disputes. I should say that I had tried to achieve this balance between her and me quite objectively, yet unfortunately, because of her age or mentality or her angle towards this matter, she lost her objectivity and assumed an opposition attitude towards me, forgetting to take a look at the reality itself, and decided to cling to the rules that might have been out of date in reflecting the fairness because of the drastic changes in the real estate market today.

Please go to this site for reference even though the opinions are very much right winged and the opinions might not be objective about The Quiet Revolution of Quebec (Dr.Roy’s thoughts about what the Rental Board does)…

To know the judgement, please keep an eye on my recent posts.

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