Apparently, the answer is yes.
We recently bought a house with two basement suites in it, and one of the tenants pays substantially less than market rates. Of course, he’s been there eleven years. I think Alicia and I have decided not to raise his rent because he’s got a lot invested in the building, and we’d like to keep him, but apparently it would be pretty easy to raise his rent to market rates in one fell swoop.
Apparently, all a landlord has to do is prove that there are specific units on the market renting for more than their unit. That’s it. Seems a little scary, but I can certainly understand the logic. If you bought a building expecting a certain amount of rent per unit, and then found that these units were renting for so much less than you expected, you might have trouble making your MTG payment, or at the very least getting a decent return on your investment.
As for what to do if you’re a tenant faced with a massive rent increase… Try finding specific units in your area renting at the same rate as yours. This may not help according to the language of the Residential Tenancy Act, but remember that arbitraters are human and might be swayed by these kinds of arguments. Also, do what the tenants in the above linked article did and go to local media. Perhaps the added attention will scare the landlords into revising their opinions.
In the end, however, you might just have to pony-up more rent or move out. This is one area of the Act that seems to favour landlords over tenants.