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A resident of the Balmoral Hotel, a single room occupancy hotel, shows the water damage in her room in Vancouver's Downtown Eastside, British Columbia, Thursday, June 1, 2017.

Rafal Gerszak/Rafal Gerszak

A proposed class-action lawsuit against a family that runs several run-down single-room hotels in Vancouver's Downtown Eastside is stalled over a dispute about whether the court even has the jurisdiction to hear the case.

The delay in the lawsuit against the Sahota family disappointed housing advocates, who are also watching developments at another Sahota-owned hotel where residents are facing eviction next week. Both cases focus on questions of maintenance, oversight and regulation in the single-room hotels that are considered the housing of last resort for Vancouver's poorest residents.

"We can't wait," Wendy Pedersen, a long-time housing and community activist, said in the courthouse after the hearing, which took place on Thursday afternoon.

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"It's disappointing it's going to take more time."

The procedural step in the proposed class action, which was heard in the B.C. Court of Appeal on Thursday, happened days before tenants at the Balmoral Hotel face eviction. The City of Vancouver recently found that building unsafe and have required tenants to vacate by June 12.

The lawsuit was filed by Jack Gates, who lives in the Regent Hotel. Mr. Gates's lawsuit alleges the Sahotas routinely ignore health and safety concerns at the Regent, including a rat infestation and a chronically broken elevator. He is seeking damages as well as an injunction that would prevent the owners from evicting any tenants while the issues in the building are repaired.

The family's lawyer has argued the case should be heard by the province's Residential Tenancy Branch, which they argue is designed to address landlord-tenant disputes and warned of potential "forum shopping" if the case were allowed to go ahead. A B.C. Supreme Court judge ruled in January that the court had jurisdiction and the case could go ahead, but the Sahotas appealed.

The Sahota family's lawyer, Michael Katzalay, told the court on Thursday that the tenancy branch is the right venue for the case and he warned of "forum shopping" if the case were allowed to go ahead in a courtroom.

"We are dealing at this point with a potential floodgates issue," Mr. Katzalay said.

The Residential Tenancy Act provides for disputes to be heard by the B.C. Supreme Court if the amount of money in dispute is greater than the limit set out in Small Claims Court – currently $25,000 – or if the dispute is linked substantially to a matter before the court.

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Jason Gratl, who is representing Mr. Gates, argued both those thresholds have been met, while Mr. Katzalay maintained they had not.

Allowing this case to go before the courts would not affect the vast majority of tenant disputes that involve relatively minor matters such as damage deposits, Mr. Gratl said, adding that the $25,000 threshold in the act recognizes that some matters require the scrutiny and procedural protection provided by the courts.

The three-judge panel reserved judgment.

In court, Mr. Katzalay argued that the Residential Tenancy Act provides for penalties for landlords that fail to maintain or repair buildings.

But housing advocates such as Ms. Pedersen, who has helped tenants pursue legal action, says neither the tenancy branch nor the city have done enough to ensure landlords keep buildings in decent repair. Now, there are fears that the more than 100 tenants of the Balmoral Hotel could join the city's homeless population. The city has said it is working with tenants and advocacy groups to help people find housing before the June 12 deadline.

A tenant of the Balmoral Hotel has also launched a proposed class-action.

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