Large N.S. landlord running 'scheme' to collect illegal deposits, says legal aid group

Zhaojun Xu held her breath and sent the payment. The deposit of $3,142.50 emptied her bank account, but she needed housing for herself and her adult son.

Weeks later, after numerous discussions with the landlord and still no signed lease or apartment, Xu began to feel anxious.

"That's when I feel so uncomfortable, and I sense something has gone wrong," Xu said in an interview on Monday. "I also asked them to show me the lease. They never did."

Xu withdrew her application in September, but the rental company did not refund her money. To support the family, her son took on a second job, and they ended up living in a hotel for several weeks, aided by a local non-profit organization where Xu volunteers.

A Halifax legal aid organization states that the deposit Xu paid to secure an apartment is illegal, yet this practice is becoming more prevalent as affordable housing dwindles and desperation increases among renters.

"People feel pressured to pay these kinds of fees because they know it's very difficult to find somewhere to live," remarked Sydnee Blum, a community legal worker with Dalhousie Legal Aid Service.

"Landlords are aware that people are in desperate situations, and frankly, many bad actors are taking advantage of that."

Blum is representing Xu in her efforts to recover the thousands of dollars she paid to Olympus Properties, a property management company that owns at least 70 residential and commercial buildings in Nova Scotia, according to property records.

Blum asserts that the rental company is operating a "scheme" that is affecting many tenants.

Legally, landlords can collect half a month's rent as a deposit, but only after a lease is signed. According to the provincial department overseeing the Residential Tenancies Act, "the maximum a landlord can charge for a security deposit is 50 percent of one month's rent, but only after a lease has been signed."

"Anyone who has been charged an application fee for an apartment should apply to the Residential Tenancies Program to recover that money," said Rachel Boomer, a spokesperson for the Department of Service Nova Scotia, in an email.

CBC News reviewed communications between Xu and employees of Olympus Properties, in which they stated her application had been approved, but the deposit to secure the apartment was $1,047.50, along with "the last month's rent to be held in trust" of $2,095. The letter also specified that the money should be received within six hours.

When presented with the language in Olympus Properties' letter, another department spokesperson stated: "The Residential Tenancies Act makes it clear that requesting application fees is not allowed; landlords are also not permitted to request the last month's rent."

In an email to CBC News, Olympus Properties claimed it adheres to the correct procedures as outlined in the Residential Tenancies Act and only charges half a month's rent as a deposit.

"Olympus Properties Management Ltd. also never charges a fee to apply for our units," the email read. "Applying is completely free of charge, and the rental application form is readily accessible on our website."

The company declined to comment on Xu's specific situation, citing a policy "to not comment on matters currently before the Director of Residential Tenancies."

Complaints Against Olympus

Cailee Clark, a former tenant of Olympus Properties, stated that she was once asked to pay a 30 percent rent increase during her tenancy.

When she pointed out that this was illegal under the province's temporary rent cap, the offer for a new fixed-term lease was rescinded.

"It's just completely shady, from start to finish," Clark said in an interview on Monday. "I've been renting my whole life, and I've never had to be on guard about what they're doing or be aware of the little sneaky things they're trying to pull."

When she moved out, Clark reported that the company attempted to withhold $250 of her damage deposit, and she had to fight to recover it. CBC News also spoke to other tenants who claimed they had not damaged their units but had to go to small claims court to get their deposits back from the company.

Olympus Properties stated in its email to CBC that it "has never withheld someone's security deposit without just cause."

Blum mentioned that Dalhousie Legal Aid has at least three clients facing similar security deposit issues with Olympus Properties and that she receives weekly complaints about other concerns, such as lack of repairs and intimidation.

However, Blum noted that this issue is not isolated to this landlord.

"In a well-functioning tenancy system, we would have some mechanism at the provincial level to hold landlords accountable for repeatedly breaking the law, but unfortunately, we just don't have that here," she explained.

Blum was referring to years of requests from both tenants and landlords for a residential tenancies enforcement system, a proposal that the Houston government rejected in September.

Xu Waiting for November Hearing

After Xu filed for a hearing with the Residential Tenancies Program, the company offered to return $900 of the $3,142.50 she paid. She declined the offer and is now awaiting the hearing scheduled for November 5.

Last week, she found a new place to live and hopes to retrieve her full deposit.

"My son feels very sad, and my husband blames me. They said I threw the money away," Xu said. "That's a lot of money. So I feel so disappointed and very stressed."