PENTICTON & DISTRICT MANUFACTURED HOME OWNERS ASSOCIATION
P.O. Box 22020, Penticton, BC V2A 8L1
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PLEASANT VALLEY MHOA TENANTS v PVMHP
Here is another small victory where the landlord does not get all that he wants. This Dispute Resolution result was effective January 7, 2011.
Here in brief is the decision handed down by the Residential Tenancy Branch between the Pleasant Valley Mobile Home Park Landlord and the Manufactured Home Owners Association Tenants of Pleasant Valley.
The Landlord had made application for an additional pad rent increase for:
- 11 units from $357.00 to $585.00 for a 63.8% increase.
- 42 units from $367.00 to $585.00 for a 59.4% increase.
- 11 units from $375.00 to $585.00 for a 56% increase.
Issue(s) to be Decided
Is the rent significantly lower than other similar units, and is the landlord entitled to an additional rent increase?
Background and Evidence
The property consists of 64 units in a manufactured home park located in Penticton. The allowed rent increase set out by regulation was 3.2% for 2010. Based on this value, the allowed rent for the units would have been $368.42, $378.74, and $387.00 respectively.
The salient portion of the parties' evidence is as follows:
The landlord compared the property with 7 other manufactured home park sites in Penticton and provided a survey consisting of the lowest, highest and average pad rent of these sites. The landlord calculated that the average pad rent was $466.29, with the highest average being $521.71. The landlord also submitted that the highest pad rental $590.00. based on that information, the landlord determined that the rent at Pleasant Valley was significantly lower than the rent payable for other manufactured home sites within the same geographical area and that the rent should be increased to $585.00 for all sites.
The Chair for PVMHP argued that the landlord's calculations are misleading because they did not take into account that a number of amenities are included in those comparable rental figures, and are not included in the rent paid by PVMHP tenants, specifically: garbage removal; recycle; TV digital cable; club house; pool/hot-tub/sauna; laundry facilities; on-site manager; green space; RV parking; visitor parking; near shopping; near beaches.
The Chair also objected to the tenants paying the same rent of $585.00, as there is disparity between the pads based on size and curb edging.
The Chair submitted that the sum of the monetary value assigned to these amenities amounts to $125.00. She stated that based on these figures, the average base rent in the geographic area is $406.00, and that the rent at PVMHP is only 11% lower than average. The Chair also submitted that there had been no rent increase at the park since 2008, but that pursuant to the statutory rate increases, the average pad rental of $367.00 would have been $416.66 for 2011, had these increases been imposed.
The Chair also submitted that since the landlord acquired that park in February 2010, the tenants lost the benefit of an on-site manager, and that disruptions and repairs to water lines and common roads occurred as a result of a new residential development under construction adjacent to the park.
The landlord contended that all disruptions have been addressed, that repairs were completed as required, and that an on-site manager does not necessarily constitute a valuable amenity.
The landlord bears the burden to prove that the rent increase is justified when compared to other similar sites within the same geographical area. The evidence established that the tenants at PVMHP did not have a rent increase since 2008. The parties agreed to a degree that their park is a desirable site, with some variances in the values attributed to the amenities. I find that some of these values are somewhat subjective based on individual taste and preference (i.e. being near the beach versus on the hills, near shopping versus in a more secluded area, etc.).
I do find however, that the inclusion of amenities such as garbage removal, TV cable, clubhouse, and visitor parking are valuable incentives that are not included in PVMHP's pad rental but enjoyed in other sites. That is not to say that these other sites have the benefit of all the amenities listed by the Chair. I do not find however that the landlord proved that the pad rental at PVMHP should be set at the highest scale of the range.
I note that the landlord's calculated average pad rental of $466.29 and the Chair's adjusted calculations of $416.66 after deducting the amenities and in consideration of statutory rent increases are approximately $50.00 apart. The current average pad rental of $366.00 is significantly lower because there has been no increase since 2008. That difference represents a margin approximately between 14% and 28% below average.
Residential Policy Guideline #37 states in part:
"However, if a landlord has kept the rent low in an individual one-bedroom apartment for a longer term (i.e. over several years), an Additional Rent Increase could be used to bring the rent into line with other, similar, one-bedroom apartments in the building."
That principle can be applied in this matter in order to bring the pad rental at PVMHP in line with other parks within the same geographical area. On that basis, Pursuant to Section 62 of the Manufactured Home Park Tenancy Act, I find that the landlord is entitled to a rent increase higher than the 2010 permitted increase of 3.2%, and that the landlord may increase the average rent to $441.48, which represents an increase of approximately 20.6%.
The landlord's application has been granted in part. The 20.6% increase may be applied against the current specific pad rentals, and calculated as follows:
- 11 units from $357.00 to $430.54.
- 42 units from $367.00 to $442.60.
- 11 units from $375.00 to $452.25.
Pursuant to Section 35(2) of the Act, the landlord must give the tenants notice of a rent increase at least 3 months before the effective date of the increase.
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