Although the New Scotland government has no plans to regulate a type of lease contract that has been called Laguna in the rental capitalization legislation of the province, some real estate listings announce fixed term leases as a financial benefit for potential buyers.
A brief search by CBC News of residential buildings of a multiple unit for sale in Halifax in May showed a trend: at least 11 listings mentioned tenants in fixed -term leases.
Two lists declared: “Currently, two -digit returns with rent increases in September”, and one also says that the property has “little maintenance, vacancy and augmented rentals.”
Others mentioned leases that ended soon and boasted of money manufacturing potential in statements such as “for the intelligent investor, finance are upwards as the tenants turn around.”
Tim Allenby, president of the Dartmouth chapter of the Acorn tenant group, said he is not surprised by this marketing tactic.
“It is the incentives of the system that currently exists,” Allenby told CBC News in an interview. “They have it configured in such a way that the owners benefit mainly from depending on the fixed -term leases, so, of course, that will end up being an investment benefit.”
According to the New Scotland residential holdings law, a fixed -term lease contract is carried out for a fixed period of time, with a established completion date. This means that it is not automatically renewed every year and the owners can decide whether or not to offer an existing tenant a new lease.
Although the province has a temporary rental limit of five percent for existing tenants, fixed -term leases have been criticized by housing defenders as a way to avoid this legislation, which allows owners to force tenants to leave and increase prices more than five percent for new tenants.
The Association of Real Estate Agents of Nueva Scotia refused to comment why this type of lease is attractive to property buyers, and why it could be announced as an asset of a property that appears for sale.
He sent CBC News to rental housing suppliers, Nueva Scotia, a group that has defended the use of fixed -term leases as a way of mitigating the risk of renting tenants as students, newcomers or persons with bad credit or without references of owners.
Kevin Russell, executive director of rental housing suppliers, New Scotland, said he cannot comment on how real estate agents market their product, “that depends on them and the owners,” but said that fixed -term leases play an important role in the rental market.
“It is difficult to rent when there is no credit history or references of owners. Therefore, they are accustomed to [mitigate] any risk “.
Russell referred to the investigation carried out by his organization in 2023 and 2024 who found 86.1 percent of the owners who responded use fixed -term leases, with the main reasons for risk management, limiting the damage to property and the establishment of relations of owners in the tenant.
The survey found that 53.9 percent of respondents would sell units if fixed -term leases were eliminated or altered.
“It will make thousands of units are not available to rent as the owners sell their properties,” Russell said. “And many times when we are renting fixed term leases, everything is made … with a partner, with one of the shelter organizations.”
Russell said the surveys did not ask if the owners chose to use this type of lease to increase profits, recover costs or avoid the rental limit.
Province says that marketing tactics is “disappointing”
An interview application for Jill Balser, the minister in charge of residential holdings was rejected.
“Fixed term leases, in some situations, work for both tenants and owners,” said a government spokesman in a statement sent by email attributed to Balser. “It is disappointing to see them used as a marketing tactic.”
The statement said that Balser “suggests strongly” the tenants report on fixed -term leases before committing one.
“I also want to remind tenants that there are options.
In mid -May, a provincial official acknowledged that some new Scotland owners abuse the fixed -term leases, but Balser confirmed that the following week there is no plans to do anything to help prevent abuse.
“They are aware of the problem,” said Allenby. “They have it as a result of a escape they created, and now they are telling everyone that they are not going to do anything about it. There are no incentives for an owner to play with the rules.”
The provincial government has said that there is no data on the use of fixed -term leases. The groups of tenants and owners have been asking for the province to do their own investigation.
“If the New Scotland government wanted odd data on how often this problem, they have the resources to get and get it,” said Allenby.
