Vancouver man fights rental company after being forced to pay $1K with application
A BC man who was recently looking for a place to live is sharing his frustrations in an effort to warn other renters about the legal gray areas that nearly cost him more than $1,000.
“The scales are so weighted against us,” Don Mostert said about his search in the West End.
Out of about five rentals he considered, he claims two landlords said he would need to pay a fee with his application to be considered a tenant.
When he showed interest in renting at Elliot Towers on Broughton Street and Jung Lane, he said his application required a mandatory payment of $1,275 to the company running the building, Forth Gen Holdings Ltd.
This was the second time he had been asked to pay a fee with his application, Mostert told Daily Hive.
“I was like ‘this is weird,’ because if I have to apply to multiple places, and this keeps up, I don’t want to have to pay multiple people for an application fee, which is something I’ve never had to deal with in my life,” he said.
Elliot Towers (Google Maps)
Mostert claims he did ask the building manager if he could opt out of paying a fee with his application but was told “no.”
“I was pretty scared that if I don’t get a place then it becomes last minute, and you might have to end up somewhere that’s not practical for you,” he said. “So I decided I’ll pay this one.”
Looking back, Mostert said he felt the landlords were disguising the rental application fees, especially because he was told he would not be able to apply without putting money down.
In an email forwarded to Daily Hive from Mostert, the strata company for Elliot Towers, Forth Gen Holdings Ltd., confirmed that it received $1,275 from Mostert as a “security deposit … for the application.” It added it would submit the application to Forth Gen Holdings’ office and give him an update.
“If this is rejected we will refund [the] full amount back to you,” the email reads.
As his rental search went on, Mostert eventually found a rental he liked in the building his sister was already living in.
Once approved to move in, Mostert was excited for his rental hunt to end.
However, he said a new nightmare had emerged.
Is it an application fee or a security deposit?
One landlord returned the money Mostert paid with his application almost immediately, but he added that Forth Gen Holdings, Ltd. refused.
Mostert argued with the strata, “I was not allowed to even apply to [the rental] without having to pay this deposit, which I don’t think is fair.”
While he had plans to sign the lease, Mostert said he did not yet agree to live in the rental and did not sign a contract.
Mostert attempted to escalate the issue when he contacted Tenant Resource & Advisory Centre (TRAC), which advised him to send a letter.
In the letter, he stated that “a security/pet damage deposit cannot be a barrier for applying to an apartment and constitutes an application fee” and pointed to a section of the Residential Tenancy Act.
Mostert shared with Daily Hive Forth Gen Holdings’ response to him, which said the Vancouver resident completed an application for tenancy and provided a security deposit for the rental unit, “not an application fee.”
A one-bedroom and bath apartment in Elliot Towers. (Forth Gen Holdings Ltd.)
It added that after the application for tenancy was accepted, Forth Gen Holdings removed its advertisements for the suite, and the building manager declined other prospective tenants.
“As the next step, you were requested by the building manager to pick up the accepted application and sign the Residential Tenancy Agreement. However, you subsequently informed the manager that you were no longer interested in moving into the suite and requested the return of your security deposit,” the letter reads.
Mostert said he did not sign anything apart from an application, but this application, Forth Gen Holdings argues, states “if this offer is accepted, it becomes a binding agreement, and that … the applicant, will subsequently sign the Landlord’s Residential Tenancy Agreement.”
Andrey_Popov/Shutterstock
According to Forth Gen Holdings, in the letter added to the agreement, Mostert is liable for one month’s rent if the suite is not rented out.
“If we successfully re-rent the suite for September, you will receive your damage deposit back. However, if we are unable to rent the suite, you will be liable for one month’s rent and any related expenses incurred,” Forth Gen Holdings told Mostert.
The property management company told Daily Hive it uses the LandlordBC Agreement.
The “gray area”
Robert Patterson is a lawyer with TRAC who explains that the Residential Tenancy Act allows a landlord to charge a security deposit of half a month’s rent.
“The purpose of a security deposit, when a tenant pays it at the beginning of the tenancy, is essentially to secure that tenancy,” he confirmed.
“So, under the Residential Tenancy Act and the policy set up by the residential tenancy branch, payment of a deposit, acceptance of that deposit by the landlord is typically sufficient evidence to prove that an agreement has been made,” he explained further.
However, he mentioned “there is some gray area” in this agreement.
JamesChen/Shutterstock
For legal purposes, the template tenancy agreement put out by the landlord organization has standard terms that say that the deposit is typically proof of an agreement.
However, he said it’s not technically an agreement; “it’s an offer to agree.”
“And if a landlord accepts it, then the tenant must pay them … [more] money, but [the tenant] doesn’t know whether it’s been accepted until they hear back from the landlord.”
In an email statement to Daily Hive, Kevin Glassman of Forth Gen Holdings said the tenancy was a twelve-month term with liquidated damages, and Mostert phoned to say he did not want the suite two weeks after he was accepted.
“He claimed to believe the money was a fee and refused to accept the liability,” Glassman said, but added, “Fortunately, the suite was rented, and the security deposit was then returned.”
Mostert confirmed that Forth Gen Holdings returned his money, and while he is “somewhat happy with the outcome,” he added, “I do not want to lose focus on what is going on here in the west end.”
Hopeful renters getting “bamboozled”
Patterson said the gray areas regarding the deposits attached to application fees do leave some landlords the opportunity to abuse them. Some folks could use this language to collect several deposits from people who are interested and hold them, which is not legal “because the payment of a deposit creates a tenancy agreement.”
Patterson cautions people never to sign agreements if they are unsure of what they are signing.
“If it looks like an application fee and walks like an application fee, just because you call it a deposit does not make it legal,” he said.
Patterson advises that people who have paid a deposit but don’t get a tenancy can pursue remedies through the residential tenancy branch.
Your Hand Please/Shutterstock
Mostert has lived in Vancouver for about 10 years and has even become a Canadian citizen. During his time here, he mentioned that finding a place to live has been consistently challenging.
“That’s the thing in Vancouver: if you miss your shot at a place, you might not get the place that you want,” he said.
Mostert admits that if his deposit were held, it would not “completely destroy” him. However, he said it’s still unfair for other people in the rental hunt who may be more vulnerable and less financially secure.
“I don’t think it’s fair for every person in Vancouver to have a law degree in property management to know when they’re getting bamboozled or not,” he said.
Despite earning more than the average person in Vancouver, Mostert said he is “fed up” with the rental and housing market.
“I can’t afford a one-bedroom apartment to buy … and that’s just extremely depressing for everyone involved,” he said. “You feel so hopeless about … [what] should be a human right for everyone, not just for those who have money.”