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Rent Increase Rules in Ontario. What You Need to Know

As mortgage rates explode, landlords are looking to increase rent prices to keep up with the cost of owning rental units. Strict laws surround these rent increases, so here's what you need to know.

How Much You Can Increase Rent

According to the new guidelines for 2023, landlords are allowed to be increased by 2.5%. This is well below the inflation rate. The Minister of Municipal Affairs and Housing said they kept the cap lower than the inflation rate to keep housing prices fair for tenants while encouraging people to build more houses and units to keep up with demand.

Who Does This Rent Increase Cap Apply To?

The 2.5% rent increase cap applies to units under the Residential Tenancies Act. Here are the scenarios where it doesn't apply:

  • rental units occupied for the first time after November 15, 2018

  • vacant residential units

  • community housing

  • long-term care homes

  • commercial properties

Properties that are not under the Residential Tenancies Act may not be subject to rent control.

The Process to Increase Rent

You have to take a few steps before increasing your unit's rent. The rules only apply to units with rent control, so if your unit is not under the Residential Tenancies Act, these rules may not apply. For units with rent control, landlords must give tenants at least 90 days' notice before increasing the rent. This notice must be in writing, including the amount of the increase and the date it will take effect. In addition, at least 12 months must have passed since the first day of the tenancy or the last rent increase. There are also rules against increasing rent in retaliation for something your tenants did.

It's Possible to Increase Rent by More Than 2.5%

While it may be harder to do, you can appeal to the Landlord and Tenant Board to seek an increase in rent above the guidelines. Landlords may appeal to the board if their costs for municipal taxes and charges have increased by an "extraordinary" amount, if they did significant repairs, or if their cost for security has increased.

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