Rent cap loophole? Halifax-area landlords defend use of fixed-term leases

Some Halifax-area landlords say fixed-term leases allow property owners to recoup operating costs they otherwise can’t under Nova Scotia’s rent cap.

Some Halifax-area landlords say fixed-term leases allow property owners to recoup operating costs they otherwise can’t under Nova Scotia’s rent cap.

Their comments to a legislative committee today are in reaction to plans by the government to extend the five per cent cap on rental increases to the end of 2027.

But opposition parties and housing activists say the bill’s failure to address fixed-term leases has created a loophole that allows large corporate landlords to boost rents past five per cent for new tenants.

But smaller landlords told a committee today that they too benefit from fixed-term leases, which they said help them from losing money on their investment.

Jenna Ross, of Halifax-based Happy Place Property Management, says her company started implementing those types of leases “because of the rent cap.”

Landlord Yarviv Gadish called the use of fixed-term leases “absolutely essential” in order to keep his apartments presentable and to get a return on his investment.

Unlike a periodic lease, a fixed-term lease does not automatically renew beyond its set end date. The provincial rent cap covers periodic leases and situations in which a landlord signs a new fixed-term lease with the same tenant.

However, there is no rule preventing a landlord from raising the rent as much as they want after the term of a fixed lease expires — as long as they lease to someone new.