Ontario Landlords – Rent Increases

September 13th, 2010 · 6 Comments · Buying or Selling Your Property, Property Management

This years pathetic rent increase of  less than one percent is shameful. (It’s 0.7 %) You can see the official Ontario site – 2011 Rent Increase Guidleine Good luck if you include your utilities in your rent

Investors Remember November 1991

November 1991 is a special date that should be close to all investors hearts. Why?

ALL RESIDENTIAL UNITS BUILT AFTER 1991 ARE EXEMPT FROM THE “LEGAL GUIDELINE INCREASE” although you must still give 3 months notice and use the form provided for the purpose from the Ontario Landlord & Tenant Board.

If you’re going to buy a condo for the purposes of renting it out try to buy one built after November 1991.

You can find this information yourself at the Ministry of Housing site here. Here’s the text from that website.

Q9. How does the Residential Tenancies Act, 2006, help landlords?

A9. The Residential Tenancies Act, 2006, promotes investment in our rental housing market by:

  • Continuing to allow landlords and prospective tenants to negotiate starting rents for all vacant units.
  • Continuing to exempt rental housing constructed since November 1991 from the annual rent control guideline and most rent controls (however, for these units, landlords are covered by the RTA rules that allow one increase per year and require a 90 day notice).
  • Continuing to allow landlords to recover capital improvements, extraordinary increases in utility costs or municipal taxes and security operating costs through above guideline increases.

Isn’t that nice?

You didn’t become a landlord to win popularity contests I hope. So for those of you who are proud owners of units that are partially exempt I’m happy for you! For the rest of you, I’m sorry about your loss. It really sucks to have your costs increase without being able to pass those costs on. I just hope you’re not providing subsidized housing.

For those of you where the market rent is lower than your costs at least you’ll be able to raise the rents if the rental market picks up as long as you bought a newer building or unit. Landlords had a trick back when rent controls were in effect. They would give rent increases based on the “legal rent” of the apartment. The “market rent” was often below the “legal rent” but if you had an irritating tenant you’d raise his rent to the “legal rent” which could be $300-$400 higher per month.

Raising the Rent

When giving out rent increases you’ll have to decide how much is enough and you’ll have to figure out market rent for your building. You can only give one increase per year and you have to give it 90 days in advance. If you’re wrong about how much to raise the rent per month, you can expect a 60 day notice to terminate the tenancy and the associated possible vacancy and the risk of a new tenant that may not be as good as the one you currently have.

Additionally you can have discounts on the increase for paying by post dated check and signing a new lease. In this way you can create incentives for making life easier for you.

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6 Comments so far ↓

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  • Marcia Hall

    Live in Oakville ON
    My Landlord raise my rent 4.9% for 2013
    Please advise.
    Landlord is
    Interfaith Homes


  • Cathy

    My tenants lease started June 1, 2012. Can I serve them with a notice to increase even if the lease has automatically renewed at the same terms and conditions ?

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  • scott

    I recently bought a 1960’s bungalow that has been owner occupied since it was built. I’ve gutted / renovated and rented the whole house to one tenant. My question is does section 6.2 of the RTA exempt my property from rent control guidelines for the current tenant as well as future tenants?

    • Rachelle

      No you are not exempt from rent guideline increases, the key point is “residential” occupation before 1991 and owner occupied vs tenant occupied both are residential, and not when it was renovated.