Wednesday, 14 January 2015

Rent Control in Ontario

You’ve survived several months in your rental unit and have managed to transform your rental unit into a home. You’re probably wondering about the amount of rent you’ll have to pay if you remain living there. You have no clue what the rent will be like next year if you decide to stay in your rental unit (you also have no clue about what you’ll wear tomorrow but that’s a whole different story). Here are a few guidelines that will satisfy your curiosity about rent control in Ontario.

After 12 months have passed since you first moved in (or since your last rent increase), your landlord can (and more than likely will) increase your rent once every 12 months. Once the 12 months have passed, you’ll be happy to know that your landlord cannot surprise you with an increase of rent without first notifying you. In fact, the landlord must give you a written notice of rent increase at least 90 days before the day the rent increase is to start. Why 90 days? Well, if you don’t like (or can’t afford) the new rent, it will allow you enough time to give the landlord proper notice of termination and find another suitable place to call home.

Regarding how much your landlord can increase your rent by, in most cases your landlord will follow rent increase guidelines set annually by the Ministry of Municipal Affairs and Housing. The Ministry isn’t inventing random numbers but relying on the Ontario Consumer Price Index (CPI), which is a measure of inflation calculated monthly by Statistics Canada. For 2014, the rate of allowable rent increases is 0.8%.

For example, if your monthly rent ($900) of an apartment began on September 1, 2013, then 12 months later on September 1, 2014, your landlord could lawfully increase your rent by 0.8 percent. Of course, proper written 90 days’ notice should have been provided to you. Therefore, your new rent amount from September 1, 2014 would be ($900 x 0.008 = $7.20) $907.20. Now here’s where it can get complicated. If your rent increases by more than 0.8% then it’s probably because the law allows landlords to apply to the Landlord and Tenant Board for an increase above the rent increase guideline for operating costs related to security services, for eligible capital expenditures, or if their costs for the municipal taxes or utilities have increased by more than the guideline plus 50 per cent.

The only silver lining with all this talk about rent control is that the interest rate on the deposit for the last month or week that you gave to your landlord before you began your tenancy is the same as the rent increase guideline.

Source: Matthew Wilson, real estate and land development lawyer

1 comment:

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