Sunday, 16 December 2012

Ontario: Maximum Rent Increase for 2013

The Annual Guideline rent increase amount for Ontario in 2013 is 2.5%.  This means that for many tenancies in Ontario the most that a landlord can raise the rent, for a sitting tenant, is 2.5% with 90 days notice.  An example of applying the 90 day notice period would be as follows.  Presume a rent of $1000 with the intention to raise the rent by the maximum guideline amount as soon as possible with the Notice of Rent Increase being delivered (Form N1) as of the date of this blog (December 16, 2012).

On these facts the rent increase could not take effect until April 1, 2013 ($1025) .  You will note the time period is slightly longer than the required 90 days--this is because the rent increase must take effect on the first day of a new rental period after the 90 days of notice and not in the middle of a rental period---i.e. the tenant, in this example, has paid rent for the entire month of March 2013 on the first of March, therefore you can not raise the rent in the middle of the month.

What if 2.5% is not enough?   The simple reality is that the Ontario government has artificially capped the annual guideline amounts at 2.5% and thereby is forcing landlords to absorb the impact of inflation and increasing costs while preventing them from passing on these costs to tenants.  The Residential Tenancies Act was changed to cap the guideline amount in June 2012.  But for this change in the law, the guideline increase amount in 2013 would be 2.6%.

What can a landlord do if the guideline amount isn't enough?  Aside from Above Guideline Increase applications it is increasingly probable that many landlords are renting out units that are exempt from the annual guideline increase caps imposed by the Residential Tenancies Act.  The exemptions, for the most part are based on the date that the rental units were built or used for residential purposes.  If you have a relatively new rental unit or otherwise want to know if you can avoid the rent increase guideline amounts you should contact a Landlord and Tenant lawyer who can go over all of the ways that your unit might be exempt under the RTA.  While a call to the Landlord and Tenant Board may also get you an answer, you should be aware the the language of the exemptions is less than straightforward and the interpretation thereof should be done by an experienced landlord and tenant lawyer.

Michael Thiele
Ottawa, Ontario

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Any answers provided are intended to reflect the Law of Ontario, Canada. The answers are not legal advice and no one should rely on the answers provided as legal advice. The answers are intended to be general information about Ontario Law and are the personal view of the author based on the limited facts provided to the author. The answers may not be legally accurate and may indeed be contrary to the law of Ontario. Answers and conclusions drawn may have been different if facts had been shared that have not been disclosed in the comment/question. This blog is intended to assist people in learning about Ontario Landlord and Tenant Law. However, if you have actual legal problems this blog should under no circumstances replace proper legal advice obtained by retaining a lawyer or licensed paralegal to advise you. Nothing in this blog, comments submitted or answers provided, gives rise to a solicitor and client relationship. Comments are published as submitted and commenters should be aware that if they identify themselves in a comment that their identity will become public upon the comment being published. Comments that have been published may be deleted upon request to the author.

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About Michael Thiele

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Ottawa lawyer and partner at Quinn Thiele Mineault Grodzki LLP.  Graduate of Queen's University in Kingston, Ontario.  Called to the bar in Ontario in 1997.  Undergraduate degree at Colby College, Waterville Maine, U.S.A.