There is developing case law in Alberta that says landlords cannot raise rent to indirectly evict a tenant, known as an “economic eviction”.
Economic evictions happen when a landlord tries to evict a tenant by raising the rent. It is common knowledge that Alberta’s Residential Tenancies Act doesn’t limit how much a landlord can increase rent after each 365-day period. However, there is developing case law in Alberta that says landlords cannot raise rent to indirectly evict a tenant. In such situations, the courts and Residential Tenancy Dispute Resolution Service (RTDRS) may void (cancel) rent increases.
Similar to how the issue of short-term rentals became a hot topic several years ago, the timing is now right to shed light on this developing area of law. Over the past year, CPLEA undertook a research project that involved gathering frontline insights from the Community Legal Clinic, Edmonton Community Legal Centre and Calgary Legal Guidance. Our work culminated in developing our new public resource, Economic Evictions. Below are four high-level takeaways that we learned in our research process.
1. It’s not always easy to spot the signs of an economic eviction
One recurring theme from our research is that it’s often difficult for tenants to realize that their landlord may be economically evicting them. When a tenant receives a rent increase notice, they should be watching out for whether the notice is valid – even if the landlord follows all the proper rent increase rules like giving 3 months’ notice for a periodic tenancy and the rent increase notice has all the required information.
Some signs of a possible economic eviction are:
- A significant increase, especially if it seems much higher than average or expected.
- The landlord seems to be singling out the tenant for a rent increase.
- The landlord has a motive for increasing rent. For example, maybe the landlord and tenant have ongoing disagreements, or the landlord has tried evicting the tenant before.
- There is no reason for the rent increase. For example, an increase that doesn’t reflect the condition of the building or unit, or what similar places and locations are renting for.
These “signs” of a possible economic eviction are especially difficult to spot in situations where a landlord is indirectly evicting all or many tenants in a building by raising rent significantly. For example, to get everyone out so they can renovate the building and re-rent units at a higher rate (also known as a “renoviction”). We also heard concerns on the ground about the possibilities of rental price collusion and AI-driven algorithmic pricing happening in the Alberta rental market. Such possibilities make it even more difficult for tenants to spot whether their rent increase was higher than average or expected, or whether the increased rate reflects what similar places and locations are renting for.
2. Tenants have a few options
For tenants, getting a large rent increase notice is frustrating and overwhelming. That said, they do have a few options. And the reality is that it often comes down to doing what feels right for them given their individual circumstances. For example, some tenants may decide to stay put and pay the higher rent. Or a significant rent increase notice becomes a wakeup call for tenants about whether they even like their landlords or their rental premises – so they may decide to look for a new place to rent.
Some tenants may decide to dispute the rent increase notice. If they do, they have two options:
- Tenants can explain to their landlord in writing why the rent increase is invalid, pay the higher rent, and then apply to the RTDRS or court for rent abatement. When the case goes to the RTDRS or court, the decision-maker will assess the validity of the rent increase.
- Tenants can refuse to pay the increased amount of rent and explain to their landlord in writing why the increase is invalid. If the landlord starts a case with the RTDRS or court because the tenant is not paying the higher rent, the tenant can then raise economic eviction as a defence. The decision-maker will assess the validity of the rent increase.
If a tenant gets a notice of rent increase and needs legal help, community legal clinics can help them at no cost as long as they meet the clinic’s eligibility guidelines.
3. What the courts and RTDRS consider
Based on the developing caselaw up to this point, the courts and RTDRS will look at various factors in deciding whether a rent increase notice was an attempt at an economic eviction. For example, this includes looking at:
- The relationship between the landlord and tenant, or other circumstances, which may show whether the landlord has a motive to evict the tenant
- Whether the rent increase is part of a broader increase for all tenants
- Whether the landlord is singling out the tenant
- Whether the rent increase is higher than for similar units in a similar location
- Whether the landlord has a reason for the increase, for example, market rental rates have gone up or there are building or unit upgrades
However, a significant rent increase by itself is not enough to be an economic eviction. The courts and RTDRS look at the factors listed above and the specific situation in making their decision.
For more information and practical tips on dispute processes and caselaw searches, refer to CPLEA’s new Economic Evictions resource.
4. The value of understanding case law
The issue of economic evictions is the classic reminder of why it’s important for the public to be aware of sources of law in the legal system. Both legislation and common law are sources of law in Canada’s legal system. Legislation is written rules that elected officials from all levels of government create to apply within a government’s jurisdiction (authority). Common law is the interpretation of legislation by the courts (also known as “case law”).
So, even if there are no rules about something in legislation, there can be rules in case law. If we look at the legislation and assume that’s the only source of law, we may miss out on important legal developments. For more insight, we must dig into the case law to see how decision-makers may have decided similar issues. Law often takes time to evolve as decision makers wrestle with articulating legal principles and how they apply to real situations.
A comment on educating the public on legal developments
Admittedly, we at CPLEA were quite apprehensive about addressing the topic of economic evictions until there was more clarity in the case law. As public legal educators, it’s a delicate balance for us to monitor developing law or legal issues and decide when the right time is to disseminate public legal information. Sometimes, it comes down to a judgment call about whether there’s public interest in the topic and whether we think there’s enough clarity in the law, in both legislation and case law, to write about.
Years ago, a few legal experts commented on the early case law related to this topic – see Jonette Watson Hamilton’s piece, “Constraining a Landlord’s Ability to Terminate a Residential Tenancy by Raising the Rent” (May 15, 2014) and Tim Patterson’s piece, “Economic Evictions in a Residential Tenancy” (October 30, 2018). At CPLEA, we greatly appreciate the foundations that such experts have established, which helped pave the way for own eventual resource development. We highly encourage anyone interested in digging deeper into economic evictions to review those two articles and to search CanLII for the most recent case law on economic evictions.
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DISCLAIMER The information in this article was correct at time of publishing. The law may have changed since then. The views expressed in this article are those of the author and do not necessarily reflect the views of LawNow or the Centre for Public Legal Education Alberta.
About Judy Feng
