There was a post on the Ontario Landlords Forum with a question that many landlords have. The landlord, gchen said his rental is in Ontario and asked how much he could raise the rent in 2015.
A helpful OLA member answered: that while Alberta landlords can raised the rent as much as they want to, Ontario landlords can raise the rent by only 1.6% in 2015.
When Does The Guideline for 2015 Begin and End?
The 2015 guideline applies to rent increases that will be taken between January 1, 2015 and December 31, 2015.
How Often Can Landlords Raise the Rent?
Landlords may increase rents once every 12 months for sitting tenants by the guideline amount without seeking approval from the Landlord and Tenant Board.
How Much Notice Do You Need To Give Your Tenant?
Landlords must provide 90 days written notice using the prescribed LTB Form N1.
How Is the Ontario Rent Guideline Calculated?
The annual rent increase guideline is determined according to section 120 (2) of the Residential Tenancies Act, 2006 which averages the monthly Ontario Consumer Price Index over a twelve month period that ends at the end of May of the previous calendar year.
If the calculation for the annual guideline amount exceeds 2.5% in any given year it will be reduced to 2.5%. The RTA was amended in 2012 when a maximum cap of 2.5% was implemented for all guideline increases.
If an increase of more than 2.5% is required, the landlord must follow the process to seek approval for an Above Guideline Increase.
Are Some Properties Exempt from the Annual Rent Increase Guideline?
Another helpful Ontario Landlords Association member named gchen said he bought a condo that was built recently. He wondered how much he could increase the rent and if there was anything special for his situation with a new rental property as opposed to an older rental property. Another OLA member asked:
“When was your property built? You might not be covered by this very low guideline and can raise the rent according to market rates in your area.”
Gchen wrote he owned a new condo built in 2012. This means he can raise the rent as much as the market demands as long as he provides property notice to his tenants.
What Ontario Income Properties Are Exempt From the Guideline?
Some properties are in fact exempt and it’s important for landlords to be aware of this.
Exemptions from the Annual Rent Increase Guideline:
The annual guideline applies to most, but not all residential rental properties in Ontario. The Act lists situations, in section 6 (2), in which a landlord may increase rent to an amount that is not limited to the guideline amount.
The provisions of the RTA that deal with the maximum amount by which rents can be increased do not apply with respect to a rental unit if:
- it was not occupied for any purpose before June 17, 1998 – meaning it is either in a new building (often a condominium building) built since 1998, or an older building with a new unit or never occupied, residentially or otherwise, before June 17, 1998;
- it is a rental unit no part of which has been previously rented since July 29, 1975 – meaning only the owner has used or occupied the unit since 1975; or
- no part of the building, mobile home park or land lease community was occupied for residential purposes before November 1, 1991 – meaning the building was probably commercially used before 1991 and then was converted to residential use.
In the above situations, an N2 rent increase form can be given when increasing the rent by any amount. In most other situations (unless the rent increase is by agreement of both parties) an N1 form should be given to increase rent only by the guideline.
Landlords are required to provide 90 days written notice when increasing the rent using either the N1 or N2 form.
If you need more information go to the Ontario Landlord and Tenant Board site.
A question for landlords across Ontario: Are you going to raise the rent in 2015?