“I don’t feel secure, I feel scammed”: Rent-in-advance scheme is troubling tenants in Halifax

Property management company Olympus Properties has been accused by Dalhousie Legal Aid Service of requiring money from potential tenants in advance of providing a lease—an action DLAS says is contrary to the Residential Tenancies Act.

In an Oct 29 press release, Dal Legal Aid says they have heard from multiple tenants who have been asked to pay a damage deposit, along with last month’s rent, before they have been provided a lease to sign. Section 6 of the RTA states that “No person shall demand, accept or receive, from an individual who may, or applies to, become a tenant of that person, a sum of money or other value in consideration of or respecting the application by the individual to become a tenant of that person.”

In an acceptance letter acquired by Dal Legal Aid written on Olympus Properties letterhead, it states: “To secure the unit,” tenants are required to pay a security deposit “IN ADDITION TO THE LAST MONTH RENT TO BE HELD IN TRUST.” The total of security deposit and rent is to be e-transferred to Olympus within six hours of receiving the letter. The letter reads, “Once your Security Deposit is received, we will prepare and sign the lease.”

Furthermore, if the tenant pays the security deposit and last month’s rent and decides to give up the unit before signing the lease, the letter says Olympus will “retain the full security deposit” and the tenant is “financially responsible for the unit until it is rented.” The letter claims that sending the security deposit means the tenant has agreed to the outlined terms.

June Xu is quoted in the Dal Legal Aid release as one such person who was impacted by Olympus Properties’ alleged actions. “They took a security deposit and last month’s rent before I even saw the lease,” she says. “When I asked for my money back, they refused. I don’t feel secure, I feel scammed.”

Not the only one

Sydnee Blum, a community legal worker with Dal Legal Aid, says in an interview with The Coast that they are representing “a number of tenants from Olympus Properties” in tenancy court who paid rent in advance in order to secure an apartment.

One of the tenants is Matthew Stewart, also quoted in the release. He says he paid the rent in advance and security deposit before seeing the lease, but was shocked to find that Olympus had allegedly attempted to take more money from his bank account without notice after the lease was signed.

“He and his partner paid the rent in advance, and what they assumed was their first month of rent. Olympus Properties told them was their last month’s rent, and so they tried to withdraw their first month’s rent in addition to the money that they had already paid,” explains Blum. “When they got a stop on that, the landlord came back and issued an eviction notice for arrears, claiming they hadn’t paid the first month’s rent. They’re facing an eviction case at the tenancy board because Olympus does not consider the money that they paid for rent to actually apply to their rent.”

Olympus Properties did not respond to a request for comment before publication time.

No enforcement

Blum says situations like this are becoming more common in Halifax as some landlords attempt to squeeze tenants desperately looking for a place to live, noting that Dal Legal Aid has seen an increase in the number of people who are being forced to pay application fees.

“There are no appropriate mechanisms in place currently to deal with this kind of illegal practice,” says Blum. “The tenancy board needs to step in and be more proactive about cracking down on bad actors.”

One solution to keep landlords from breaking the law is to create a residential tenancies enforcement unit. Although the provincial government paid $300,000 for a report on how a residential tenancies enforcement unit could work, Service Nova Scotia minister Colton LeBlanc said it would just add more red tape and bureaucracy to the process.

To Blum, this is only making it more difficult to enforce the province’s policy.

“The fact that we have no mechanism to go after landlords who repeatedly break the law, frankly, allows landlords to repeatedly break the law,” says Blum. “There’s no incentive for landlords to stop because tenants have to apply individually to the tenancy board if they want to get the money back, or if they want an illegal policy to not be enforced.

“Landlords are betting that tenants are not going to do that. It’s a gamble, right? It’s a numbers game: ‘How many tenants are going to pay us money that we shouldn’t be collecting, versus how many tenants have to go to the tenancy board and fight this.’”