Toronto tenants fight rent increase, argue landlord is partially using it to cover redevelopment costs

Tenants of a Toronto apartment complex are fighting an application for an above-guideline increase to their rent, because nearly half of it is covering an environmental assessment that's typically used to help the landlord sell or redevelop the property.

"It's ridiculous," said Amy Nyp, who has lived in one of 115 units in the three low-rise buildings near Black Creek Drive and Eglinton Avenue for nearly nine years.

"Why are we paying for something that doesn't actually pertain to the tenants?"

Without approval from the Landlord and Tenant Board (LTB), landlords in Ontario are only allowed to increase rent for most existing tenants by the province's annual rent increase for inflation. (This year, that guideline is set at 2.5 per cent.)

Above-guideline increases, or AGIs, allow landlords to tack on up to an additional three per cent per year to help cover the cost of capital expenses like major repairs and renovations.

CBC Toronto has previously reported on how the number of AGI applications made to the LTB has increased dramatically in recent years — which tenant advocates attributed to corporate landlords using AGIs to maximize profits by pricing out long-term tenants.

But in this case, tenants, and the area's tenant union, argue the landlord has taken that strategy a step further, by claiming expenses they say aren't eligible for an AGI under Ontario's Residential Tenancy Act.

"It's just such a blatant disregard for the law," said Chiara Padovoni, co-chair of the York South-Weston Tenants Union. "It's a slap in the face for tenants who live here."

In a statement, the landlord, QMW Corporation, said it is pursuing the AGI application to "recover costs related to significant property upgrades that directly benefit tenants."

"The AGI request aligns with regulations allowing recovery for upgrades that enhance tenant living standards, not for future redevelopment," reads the emailed statement.

The application was filed during the 2021 pandemic rent freeze for a 3.81 per cent AGI to cover roughly $647,000 in expenses from replacing a boiler, roof, paving and for "site remediation."

But according to records submitted in support of the application, it appears only about $26,800 of the $295,373.72 claimed for "site remediation" was spent on disposing contaminated soil found under the parking lot. That was in spite of an assessment finding that the soil wouldn't pose a health concern to residents, unless the property were redeveloped. 

The remainder of expenses claimed as site remediation went toward the costs of a geo-environmental investigation and assessment of the site, according to engineering reports and invoices submitted with the application. 

QMW did not address specific questions in its statement to CBC Toronto about what remediation work was completed. Instead it said "recent site improvements, including remediation work, have been conducted in compliance with all relevant standards."