If you rent a place in Winnipeg, you may have already been affected by what tenants and community organizers are calling a loophole in rental legislation that gives landlords the power to raise the rent well above provincial rent controls.

Manitoba’s Residential Tenancies Branch (RTB) sets a rent increase guideline every year. However, the Residential Tenancies Act – legislation that outlines landlord responsibilities – gives landlords the ability to apply for an increase beyond that guideline, so long as they can account for expenses to justify the increase.

Nearly 300 landlords applied for an above-guideline rent increase in 2008 alone.

“Landlords will and have used this loophole to their advantage,” said Peter Koroma, constituency assistant for Jon Gerrard, leader of the Manitoba Liberal Party, who has received several complaints on the issue.

Expenses to justify a rent increase are often associated with renovations to the properties, he said.

Tenants of One Evergreen Place, an Osborne Village apartment, know this firsthand. Evergreen is located on Roslyn Road where tenants have recently been subject to major renovations and an above-guideline rent increase of 3.5 per cent for 2010.

“I have to pay it, it doesn’t matter, but I felt that we [tenants] should have been compensated for the noise rather than charged,” said Teresa Mendham, a 94-year-old tenant who has lived in the building for 13 years.

Mendham was one of several tenants on the first five floors of the 30-floor building whose suites underwent renovations to their balconies, causing consistent noise from 8:30 a.m. to 5:30 p.m., Monday to Friday, for nearly two months late last year.

“Several times I just went for a drive in a taxi to escape the noise,” said Mendham, who has macular degeneration, an age-related condition that causes severe visual impairment. She was given six days notice about the renovations.

The renovation project, which will continue in the spring, is meant to restore worn concrete and install new railings and privacy dividers in order to give the building a new contemporary look, according to a notice sent out by the building’s property manager. The property manager declined an interview.

“ Landlords will and have used this loophole to their advantage.

Peter Koroma, constituency assistant for Jon Gerrard

One Evergreen isn’t the only Roslyn Road block where landlords have increased the rent above the guideline. Tenants at The Blair House at 43 Roslyn Rd. have seen a 2.9 per cent increase in rent for this year.

“The increase was justified with suite-by-suite renovations, including heat, water and laundry facilities,” said Amanda Campbell, property administrator for Shindico Properties, which owns the block. “We haven’t received any complaints from the residents.”

Masha Giller has lived at Blair House since the autumn of 2004 and has fought unsuccessfully against rent increases at the building, including an increase of over eight per cent last year.

The current Residential Tenancies Act effectively allows landlords to neglect building maintenance for years and then apply for a rent increase for renovation expenses. Those expenses in some cases could have been spread over 15 to 20 years if normal maintenance had taken place, she said.

Out of the nearly 300 landlords that applied for above-guideline rent increases in 2008, the RTB did not track statistics on how many of the applications were successful. The number of applicants for 2009 have yet to be accounted for, an RTB spokesperson said in an e-mail.

Read Part II of this story next week for more about 43 Roslyn Rd. and a process that gives landlords the power to vacate tenants and substantially increase rent for large renovations.