Elderly renters given short notice of 43 per cent rent hike

Tenants of another New Brunswick apartment building, including several elderly residents, are facing double-digit rent increases that a new landlord is trying to impose twice as fast as New Brunswick allows.

Eighty-two-year-old Irene Murphy has lived in the 45-unit building at 35 McKnight St. on the north side of Fredericton for the last 10 years

She received a letter on Dec. 31 stating that her rent would be increasing $390, to $1,300 a month, on April 1. It's a 43 per cent increase she says she and several of her neighbours, who received similar notices, can't afford to pay.

"Oh my goodness, they are so upset, because a lot of them are on strictly Old Age Pension, and Canada pension for some of them, and so they don't have much of an income coming in," said Murphy. 

She said a friend of hers, who lives in the same building, told her the rent increase would leave her strapped.

"She told me yesterday that by the time she paid everything that she had to pay with this rent increase — and that's without groceries — she'll have $85 left over."

Murphy and her friends join a growing list of tenants in a number of New Brunswick buildings facing a choice between steep rent hikes or hunting for new housing during one of the worst flare-ups so far of  the COVID-19 pandemic.

Murphy's building was purchased in November by a numbered company based in Halifax for $6.675 million, 67 per cent above its assessed value.  

CBC News was unable to reach the company president Sean Kearney at his Bedford office address. Kearney lists himself as a real estate investor with Next Level Properties on LinkedIn.  

According to that listing, Next Level Properties assembles investors looking for returns from the purchase of lower-grade real estate. 

"From Trash to Cash, we team up with busy professionals who have no free time and are looking for additional income to help with retirement, family obligations or freedom to do what they want by providing them with monthly cash flow," reads the description of the group's investment strategy. 

According to property records, at least 21 investors from Alberta and Ontario are helping to finance the Fredericton building in exchange for interest payments on their money of 11 per cent this year.

The new owner brought in K Squared Property Management of Moncton to operate the building, and K Squared delivered the rent increase notice.

In its Dec. 31 letter to tenants, K Squared said higher rents would begin in three months, on April 1, although New Brunswick adopted new rules in mid-December that require tenants be given six months' notice of increases in most cases.