Two B.C. landlords whose costs have skyrocketed – due to their variable-rate mortgage – have been allowed to impose huge rent hikes on their tenants to offset their financial losses.
In a recent ruling, an arbitrator with the province’s Residential Tenancy Branch approved increases totalling 23.5 per cent over two years for each of the landlords’ four rental units.
That’s on top of the 3.5 per cent annual increase previously approved by the B.C. government for 2024.
“The landlords experienced dramatic interest rate increases which have made managing the property unsustainable,” reads the ruling, which was published in May.
Then fucking sell the property and cut your losses. Why is it that landlords are sacrosanct people that make money regardless of the bad “investment” they made?
The GDP is so tied to the real estate that we see inane shit like that.
Won’t that likely still cost the tenants their home? Any guarantee new owner will keep the old price if the interest rates are higher? Or who would want to buy it if it’s a loss?
No, the new buyer has to honour the lease amount, and then subject to normal 2-4% per year adjustment.
They’re allowed to give the tenants one month notice if they or their immediate family are moving in but yeah outside of that they just inherit the lease as is.
If they do that and then rent it out within 6(?) months they have to pay the tenants 12 months of rent… IF the tenants can prove it and then take the landlord to court. So not ideal eitherway.
The law just changed to 4 months notice for landlord/family use (3 months if it’s for a new buyer) and the landlord/new buyer/family must live there for 12 months (actually live there, not just keep it off the rental market).
If it doesn’t sell, fine. Then maybe people will stop buying up housing to have rental income. And while I understand why people do it, I in no way agree with it … because it’s only wealthier people who can afford to do it. The average person is priced out.
So let those who bought at low-now high interest rates lose their shirts, as it seems that’s the only way prices will come down … because every level of gov’t hasn’t done sweet fuck all to stop (or even hinder) the practice.
It’ll sell at some price point. Property isn’t a guaranteed growth investment and we should stop treating it like one.
Also, only a fucking idiot gets a variable rate mortgage.
Or variable rate interest should be illegal? That’s kinda where I was going. People keep yelling about landlords when everything in general follows the path of least resistance. Cut the problem off as near to the source as possible.
That’s not unreasonable sounding… I’m not certain if there are any second order effects but it feels like a good consumer protection change.
Variable rate let’s me take on the rate risk and pay (on average) less interest. Fixed interest means the bank prices in the rate risk and you pay for that in a higher rate.
I understand what it is. I said make it illegal. It largely contributed to the housing collapse.
I don’t think there was really much of a housing collapse in Canada…
Well it caused a worldwide recession.
The problem occurs when house prices tumble from an influx of sales, and the 32% (In NZ) of your population that are paying their mortgage off on their primary residence are potentially plunged into negative equity on rising interest rates.
Once you’re there, you’re kind of fucked. You can sell, but you’ll still owe the bank money, so you can’t buy/downsize. You can’t even change banks. You’re a risky customer, so you get higher interest rates. All you can do is hope the market rebounds or declare bankruptcy.
So you’re risking fucking over 30% of your nation (and arguably the most productive segment of your country as they’re earning money to pay that mortgage), to appease a fraction of (as not every renter can/wants to buy. Eg, students, temporary immigrant workers etc) the 30% of renters that are being fucked over by high house prices.
Not to mention, all the renters you’ve displaced into an even more competitive rental market.
But that’s not to say the solution is to shrug your shoulders and let the landlord class continue to punch down.
It would be expensive, but you could guarantee (current) mortgages for primary residences in cases of financial hardship. Buy mortgagees out and turn the houses into state housing, renting them back to the previous owners at fair prices.