In Ontario, when the landlord increases the rent, the tenant can ask the following questions to see if the rent increase is lawful and valid.
1) Did the landlord give the tenant proper notice of rent increase?
Your landlord is obligated under Section 116 of the Residential Tenancies Act to provide you with a written 90-days’ notice about the rent increase.
2) Does the amount of rent increase fall within the Rent Increase Guideline?
In Ontario, there is a rent increase guideline that sets a maximum rent increase amount. The amount listed in the Guideline changes each year based on the Ontario Consumer Price Index. Some previous guidelines include:
Year Guideline (%)
2020 – 2.2%
2019 – 1.8%
2018 – 1.8%
2017 – 1.5%
2016 – 2.0%
*Note for 2021, an Ontario legislation was passed freezing the rents increase at 2020 level. With the legislation in effect, the rents will not increase in 2021 for most rented units covered under the Residential Tenancies Act.
The landlord in Ontario is prohibited from increasing the rent beyond or above the amount stated in the rent increase guideline unless the landlord qualifies for the exceptions.
3) Is the Ontario rent increase applied following the lawfully prescribed period?
In most cases, the rent for a residential unit can be increased 12 months after either:
– the last rent increase
– the date the tenancy begins
Example:
Your monthly rent was increased to $1,000 on February 1, 2018. The Guideline for 2019 is 1.8%. Therefore:
An increase of 1.8% on $2,000 = $36.00
$2,000 + $36.00 = $2,036.00 (Total of increased rent)
Your landlord could lawfully increase your rent payment 12 months later, on February 1, 2019, up to $2,036.00 per month.
Your landlord would need to provide you with written notice at least 90 days before February 1, 2020.
If the landlord fails to comply, you can bring the matter to the Landlord and Tenant Board to retrieve the rent amount you overpaid due to an unlawful rent increase.
FOR LANDLORDS:
The landlords may want to increase the rent above the Guideline for various reasons.
First, the landlords should assess if their rental unit falls under an exemption from the Residential TenAct’s rent control Act.
Suppose the rental unit is subject to rent control of Ontario’s Residential Tenancies Act. In that case, the landlords can bring an application to the Landlord and Tenant Board if they wish to increase the rent above the Ontario Rent Increase Guideline for the following:
An “extraordinary” increase in the municipal taxes and charges for the residential complex
First time operating costs or an increase in the operating costs for security services for the residential complex
Prices for the capital expenditure work done in the residential complex.
The eligible capital expenditure work includes work to protect or restore the residential complex’s physical integrity, maintain it, provide access for persons with disabilities, promote energy or water conservation, etc. It does not include replacing a system or equipment when no major repair or replacement was required.
The above Guideline – Ontario rent increase cannot apply if a new tenant’s tenant agreement took effect after the capital expenditure work was completed.
Whether you are a tenant or a landlord, you will need the assistance of a lawyer or a licensed paralegal to assess your situation and take the appropriate steps. Contact Juzkiw Law Firm for more details – 416-221-2221.
