The Ontario Government recently introduced legislation that proposes to constrain the allowable rent increases landlords can legally charge. Its a short bill, just an amendment to the existing act.
By August of each year, the Ontario Govenrment publishes the maximum allowable rent increase for residential leases, for the following calendar year. This new legislation will put parameters around what the most and the least that published rate will be. It says “The guideline for a calendar year shall be not less than 1 per cent and not more than 2.5 per cent.”
Now, should a landlord find that the costs of operating their rental suites increase more than the allowed amount, they can apply to the Landlord and Tenant Board for permission to increase it more, additionally, a landlord can reset the rent charged on a suite, when it goes vacant between tenants.
Here is where you will find the allowable Ontario rent increase for 2012.
Can’t say I really see the point of this. It basically puts cuffs on the government. There are no limits on the increases in the costs to landlords may incur. Should the province one day experience the high rates of inflation we’ve seen in the past of say 6% to 10% inflation, the Government would have to repeal this to get a higher increase put through.
But here is something that is not very well known…
Rental apartments in buildings constructed after Nov 1, 1991 are totally exempt from this maximum rent rule. Yup, that right exempt! So, if you are the landlord of a condo suite you rent out in one of those recently built Toronto condo’s, you could increase the rent by as much as you’d like. You can increase it from $1,000 to $1,500, to $3,000 or to $5,000 – but I’d recommend staying away from unreasonably large jumps. The Landlord and Tenant Board could rule against you for acting in bad faith.