Real estate investment by trusts is changing landlord-tenant relationships
Real estate investment trusts are companies that own, operate, or finance income-producing properties.
Real estate investment trusts are companies that own, operate, or finance income-producing properties. They are popular among investors who want to diversify their portfolio and earn regular dividends from real estate without having to manage the properties themselves.
However, some critics argue that Real estate investment trusts are also contributing to the housing affordability crisis and the deterioration of landlord-tenant relationships in Canada.
According to Robert Patterson, a lawyer and advocate with the Tenant Resource and Advisory Centre (TRAC), the growing trend of ownership of rental properties by Real estate investment trusts is turning the motivation to make a profit into “overdrive”.
He told CBC News that Real estate investment trusts are more likely to raise rents, evict tenants, and neglect maintenance than individual landlords 1. He also said that Real estate investment trusts are less accountable and responsive to tenants’ concerns and complaints.
Patterson cited some examples of how Real estate investment trusts have negatively impacted tenants in British Columbia. He said that one REIT, Starlight Investments, has been accused of renovicting hundreds of tenants in Burnaby and New Westminster by claiming that they need to do major repairs or upgrades 2.
He also said that another REIT, InterRent, has been sued by a group of tenants in Vancouver for allegedly breaching the Residential Tenancy Act by imposing illegal rent increases, failing to provide adequate heat and hot water, and refusing to return security deposits.
Patterson said that the provincial government should take action to protect tenants from Real estate investment trusts by implementing stronger rent controls, enforcing tenant rights, and increasing the supply of affordable housing 1.
He also urged tenants to organize and advocate for themselves by joining tenant associations, filing complaints with the Residential Tenancy Branch, and seeking legal advice from TRAC or other organizations.
However, not everyone agrees that Real estate investment trusts are bad for tenants. Some proponents of Real estate investment trusts argue that they provide benefits such as professional management, improved quality and safety of rental units, and increased investment in the rental market. They also claim that Real estate investment trusts are subject to market forces and regulations that limit their ability to exploit tenants.
"I'm not surprised that the number is so low," said Samuel Mason, a lawyer at Parkdale Community Legal Services.
"This very much hits home how fines against landlords are issued very conservatively ... and very rarely," said Mason.