Why Landlords Increase Rent Every Year.
Posted on: Monday November 10, 2014
The government of Ontario releases rent increase guidelines yearly. For 2017, the maximum allowable increase is 1.5%. In general, rent can only be increased if one year has passed since the tenant moved in, or one year after the last rent increase. As a landlord, you must give your tenant at least 90 days notice before the increase can take effect.
As a landlord, you should increase your rent regularly
Let’s say you have a tenant who has been renting your unit for 3 years. You haven’t increased rent in the past because you didn’t feel the need to — you were satisfied with the amount of positive cash flow you were receiving. Now in your fourth year, your cash flow decreased significantly.
You might think, “I’ll just catch up on the increases that I didn’t take advantage of, and increase rent this year by the past years’ guideline amounts combined. The problem is — you can’t.
A landlord cannot combine increases from past years
The rent increases that you don’t take advantage of are lost forever. It may be possible to increase rent by more than the guideline amount, but youhave to apply to the Landlord and Tenant Board and provide valid reasoning — for example, a substantial increase in property taxes or utilities.
The forms required to increase rent can be found on the Landlord and Tenant Board’s website.
Written By: Vic Bansal, B.A. (Hons.), J.D., Associate Lawyer