A provincial law is needed to protect long-term residential leaseholders

In 2022 the need for B.C. legislation to regulate the operation of long-term residential leases is still best understood by reading the following 2017 submission to Victoria-Beacon Hill MLA Carole James, who was at the time Deputy Premier. The situation has changed, though, with the B.C. Court of Appeal having ruled that these are standard-form leases, confirming that they were not negotiated freely. For a summary explanation of the implications, turn to this site’s page titled ‘Lease is a standard-form contract’. In short, these are not commercial leases in which the Province should not meddle, but take-it-or-leave-it leases that put long-term residential lessees at enormous disadvantage with the building’s owners.

Below the submission to Ms. James you’ll find a chronology (most-recent items first) of news reports, letters to the editor, petition letters and a link to a more technical analysis of leasehold issues and proposed legislated solutions, which last item was prepared by Orchard House lessee Hugh Trenchard.

——————

Our original submission to MLA Carole James:

Acting on behalf of 40 Orchard House leaseholders who had met on 4 November 2017, on 14 November I delivered to the community office of our MLA, Carole James, a letter asking the government of B.C. to enact legislation to protect us long-term residential leaseholders. Along with the letter I provided the following article summarizing our situation so that Government MLAs and other Cabinet Ministers can quickly understand our needs. Consider writing our MLA, and speak to any government-side MLA or Cabinet Minister you may know, asking them to legislate the protective measures we need.

By Gerald Rotering 12 November 2017

Mr. Rotering holds the assignment of a leasehold suite in Orchard House tower, 647 Michigan Street, James Bay neighbourhood, Victoria. He has been a city councillor and mayor of Nelson, B.C., and a Calgary condominium-specialist realtor, author and real estate instructor. He created the web site www.OrchardHouseLeaseholder.ca to address issues at that building and with long-term residential leases province-wide.

Although most B.C. renters and all condominium owners enjoy guidance and protection under provincial law, nothing protects residents of long-term lease apartment buildings. For those who “own” a suite with a lease of more than 20 years (usually originally 99 years), no law or regulation of any kind protects them. This has to change.

The leases that govern the buildings at issue were prepared by construction companies in the early 1970s in their own interests. Neither the original suite lease purchasers nor people who buy the remaining years of a lease had then–nor have now–any say in the terms of their lease with the building owner. The standard-form leases require very little disclosure about building operations although the suite lessees–tenants, really–must pay all the bills. Leaseholders have no statute-granted say in what they will be charged for an upcoming year’s operations, nor even the right to see the budget. They also have no right to disclosure about capital-cost projects, even though they must pay sometimes astronomical bills, such as for new exterior windows and doors ($37,000 for each two-bedroom suite in only the most recent substantial levy at Orchard House), and often receive little notice because many of these leases require no notice at all.

As well, if leaseholders organize, there is no requirement that a representative association be recognized by building owners. Those who “own” a suite lease do not even have the right to assemble in the lobby of the building where they have their homes, nor to post notice of an off-site leaseholders’ meeting on any bulletin board. Would any other renter or condominium owner put up with this situation?

Keep in mind that it is often people who cannot afford true-ownership condominium homes who turn to leasehold options. Leasehold suites have reduced prices and resale values because one actually “owns” nothing but the right to live in a suite for a period of years. Don’t trust me; ask any local realtor. We are tenants, but paid the B.C. home-purchase tax and only have the right to live where we do for the remaining years of the lease, which is registered at Land Titles and qualifies us for the annual B.C. Homeowners’ Grant.

Most other jurisdictions dealt with this enormous imbalance of power decades ago. All Canadian provinces other than B.C. and Saskatchewan have landlord-tenant laws that cover leases exceeding 20 years. Our legal-system mother country, Great Britain, has national legislation protecting those who buy into long-term residential leases. What happened in B.C.? Most likely provincial governments just didn’t want to deal with it. The recent Liberal government (conservative, really) heard our appeal and dismissed it as falling under commercial leases.

Commercial leases? You mean those negotiated between lawyers representing independent parties protecting their respective interests? The 1970s-era long-term residential leases were not negotiated at all, but were signed by corporate entities owned and even signed, in many cases, by the same person. Nothing was negotiated, and those who buy the remaining years of a suite’s lease must sign on the dotted line—no questions asked—or not have an affordable home.

Long-term leaseholders cannot even bring a dispute to the Residential Tenancies Branch. Right now any and every issue raised must be pursued in court, which is complex and expensive. Certainly the building owners have no interest in compromise or negotiation; why should they, when they hold all the cards in a lease they created to serve themselves? Even courtesy by building owners is often lacking, as my letters politely asking for the annual budget are ignored. Some of the letters that we receive from management are rude to the point of being outrageous.

Not all residential leasehold situations are this bad, of course. Property owners like Indian bands, the University of B.C., the City of Vancouver and even the Vancouver School Board host everything from strata condo towers to townhouses and single-family homes on their land, almost certainly with high standards of management and disclosure to residents. For the 1970s group of buildings, however, it’s one battle after another just to know where our money is going, why suite fees are up 38% and whether the property owner can use our money to fight us in court. A new law would apply to all, of course, but we expect that the landlords with higher standards would not object to a law and regulations setting minimum standards.

At Victoria’s Orchard House tower one suite leaseholder, Hugh Trenchard, became fed up with management’s refusal to disclose information. He is pursuing legal actions against building owner Westsea Construction at enormous personal cost, and may yet accomplish a precedent affecting the dictatorial powers and behaviour of building owner Westsea Construction and of other landlords. But any legal precedent he might accomplish would still require expensive litigation to enforce. Wider Provincial protections are needed regardless of court-case outcomes.

Forty leaseholders at Orchard House tower voted (4 November 2017) to ask for quick legislative action to give these working-class owners of modest leasehold suites basic protection from and disclosure by building owners, which we might call the B.C. Residential Leaseholders’ Rights Act. It need not deal with everything at once. The complexity of what happens when leases expire, for example, can be studied and dealt with in the future. Here are the minimum rights that B.C. apartment leaseholders need immediately:

  • Disclosure of the annual budget so that we know exactly why our 2018 monthly suite fees are to rise 38% over this year, which is the current Orchard House example.
  • A cap on the annual increase in operating fees charged to us and a prohibition on rolling capital projects into the annual operating budget.
  • Disclosure of a more detailed audit report than one that says ‘looks good’, as we need to see that costs were properly incurred on our behalf.
  • Disclosure of contracts, so that leaseholders know, for example, what duties the on-site manager(s) should be performing.
  • Prohibition of building owners using the buildings’ operating funds to pay for legal expenses litigating leaseholders. This issue is one that Mr. Trenchard’s legal actions are trying to address.
  • The requirement that building owners submit to a dispute-resolution mechanism, such as the Civil Dispute Resolution Tribunal.
  • Recognition of an in-house organization of leaseholders with the duty of building owners to disclose to and communicate with it to resolve common issues.
  • Permission to post notices on an in-house bulletin board and to assemble in what would be called “common property” in condominium/strata buildings (the lobby, say).

These are not the concerns for a handful of people, but of thousands. I’ll close with a list of the 1970’s-era leasehold buildings in Victoria, then some across the strait that I’m aware of:

  • Orchard House tower, 647 Michigan Street, 211 suites.
  • Villa Royale, 964 Heywood Avenue, 128 suites.
  • El Mirador, 777 Cook Street, 65 suites.
  • Ocean Villa, 20 Olympia Avenue, 42 suites.
  • Edgemont Villa, 909 Pendergast Street, 41 suites. These four total 487 suites.

In Vancouver’s West End there are: Westsea Towers, 157 suites; The Chelsea, 40 suites; El Cid, 208 suites; The Horizon, 89 suites; The Martinique, 92 suites; The St. Pierre, 41 suites; The Surfcrest, 160 suites; Lancaster Gate, 44 suites. These eight buildings have a total of 831 suites.

Surrey’s townhouse and apartment complex called Sun Creek Estates has 301 homes on long-term leases from Westsea Construction. In Richmond there are: Bristol Court,110 suites; Sussex Square, 216 suites; Blue Haven, 50 suites; Imperial Apartments, 50 suites. These four buildings house 426 suites.

In total these listed leasehold buildings have 2,000 suites, many or most of them “owned” by leaseholders with no rights or protection under B.C. law.

———————-

Update 15 June 2020: Twenty-four lessees at a Richmond building owned by Westpark Investments (‘same owners as Westsea Construction) are being sued for not paying all or part of between $40,000 and $50,000 to refurbish the aging wood-frame building in which they lease suites. The Vancouver Sun has reported on their desperate situation and touched on the B.C. Court of Appeal recognition that the Richmond building’s lease as well as nine others including Orchard House is a standard-form contract. Overlook the first story’s error about the nature of apartment leasehold. The reports are here (each link opens a new browser tab): VanSun 12 June 2020    VanSun 15 June 2020 .  Orchard House lessee Hugh Trenchard posted a comment on the Sun’s second on-line article, pointing out that a court ruling on major works could favour lessees closer to the end of each lease term… but that legislation should make it unnecessary for the next generation of lessees to sue; read that here:  Hugh re VanSun 15 June 2020   .

Update 10 June 2020: Orchard House lessee Mr. P. B. Davis had a strongly-worded call for Provincial action published today as a Times-Colonist editorial page commentary. He used the term “condo”, which doesn’t really apply at leasehold buildings, so substitute the word “suite”. It also does not diminish his well-stated points to note that the courts have not yet decided whether Westsea Construction billing lessees its litigation expenses is permitted under the lease (although one judge opined ‘not’), and no statute law in B.C. covers this issue or the long-term-residential leases, the desperate need for which is Mr. Davis’ point. The billing of landlord litigation expenses to lessees is addressed under this site’s heading ‘Disputing WS’s legal costs’. You can read Mr. Davis’ T-C commentary here (opens new browser tab): T-C op-ed by Mr. Davis . Two days later the Times-Colonist published the following to-the-point letter from our fellow lessee Kay Walker: Kay’s letter to editor  .

Update on 8 June 2020: I was angry when I wrote this e-letter to Deputy Premier/our MLA Carole James yesterday, but it’s time for provincial action to prevent even more Orchard House and many other B.C. lessees from losing their affordable homes. The B.C. Court of Appeal has decided—as a side issue to the question of the windows replacement expense—that our lease is a standard-form contract, refuting the Ministry of Housing staffs’ dismissal of our concerns as being a dispute over a commercial lease; nonsense, the judges agreed. Open a printed-out version of the e-letter, sent on 7 June 2020 (opens new browser tab): Cabinet Order, please .  The June 7 front-page Times-Colonist story was attached to the e-mail and a print-out of that can be found here (also opens a new tab): T-C reports BCCA decision  .

Updates for 23 June and 8 September, 2019: I spoke again briefly on both of these dates with our MLA and Deputy Premier Carole James, as I/we have done in the past. Ms. James has been sympathetic to the plight of all long-term lessees in B.C. since before being elected to government, even meeting with many of us at the B.C. Legislature and bringing in MLA David Eby, who became the current Attorney General. It is time for Ms. James to tell Minister of Housing Selina Robinson to direct that legislation be drafted to protect us from building owners.

Update, 6 June 2018: I’ve spoken with MLA and Deputy Premier Carole James about the need for protection for lessees, which she replied might best come under the Residential Tenancies Act. The very next day we at Orchard House each received a bill for our share of $551,954 for a 2017 operating budget shortfall, $426,337 of it being Westsea’s legal expenses, largely to oppose Mr. Trenchard’s actions that seek fairness for all of us. This new expense–on top of so many before it–will finally make leasehold “ownership” here unaffordable for more of us; homes will be lost. With urgency, I’ve written to Ms. James about this new development, which letter and billing from Westsea you can read here (opens new tab):  Ltr to Carole re WS billing us legal expenses

Update, 23 May 2018: Sun Creek Estates in Surrey has 301 homes owned by Westsea Construction that are on long-term leases and whose leaseholders face almost $13 million in capital costs, which averages $43,000 per home… on top of $5,000 or more already paid in 2016 and 17. This week I mailed a letter to some Sun Creek lessees telling of our campaign for Provincial protection and offering them a prepared petition letter to fill in and send to their New Democrat MLA, Harry Bains, who is also Minister of Labour. If any leaseholders there need to print out copies of that petition letter, find it here (opens new tab): pdf petition to MLA Bains  .

Update, 17 April 2018: Thirty-five Orchard House lessees met last evening and endorsed the following letter to B.C.’s recently-appointed Rental Housing Task Force (opens new tab): Ltr to rental housing task force

Update, 28 March 2018: I’ve mailed to 276 Victoria leasehold suites a copy of my op-ed article on these issues that appeared in the Times-Colonist on March 4th (a short version of what’s below), along with a petition letter that people can fill in and deliver to MLA Carole James. Numerous people have already done so, and if you misplaced that mailing, print out a copy from this pdf, fill it in, and please send it to her (opens new tab): Petition form letter pdf

Update, 8 March 2018: A comprehensive paper on our issues and suggested legislative solutions has been prepared by Hugh Trenchard and delivered to the B.C. Deputy Minister of Housing. Hugh’s paper can be found here (opens new tab): Toward regulating long-term leases, Hugh Trenchard . The troubled history of leaseholds is very well reviewed by Hugh, using extensive quotes from 1980’s debates in the B.C. Legislature at page 2–6 and page 8–11. New Democrat MLAs like Robin Blencoe of Victoria-Hillside foresaw the problems we experience today. He documents that Social Credit (read “conserative”) cabinet ministers rolled back the limited protections lessees had and spoke for building owners. In fact, Orchard House tower’s conversion from rental building to leasehold to avoid rent-rate controls was controversial from the outset, as shown by this news report in The Times Colonist headlined “Firm denies using lease loophole” (opens new tab; scroll down in the document to an easy-to-read typed version): O.H. news clip plus text re deny loophole .

Update, 7 March 2018: The Minister of Housing needed to hear that Orchard House leaseholders are now being billed IN ADVANCE for Westsea’s legal expenses to oppose any lawsuit filed against it. Here’s what I’ve delivered (opens new tab): Letter to Minister 001  .

Update, 4 March 2018: The Times-Colonist has printed an editorial page commentary from me titled “Laws needed to protect long-term B.C. leaseholders”, which can be read here (‘opens a new browser tab): T-C op-ed 4 March 2018 .