Raising rent can be a sticky topic. Rent is a bit different from most commodities. For most people paying it, it’s a necessity. That’s why raising rent has long been contentious. Understanding how to raise rent legally is complicated by the fact that the laws that affect rent control change frequently. By extent, taking advantage of those laws might mean hurting a solid relationship with your tenant.

This post isn’t meant to advocate for raising rents. It is meant to help landlords do the right thing within the limits of the law, so let’s get started.

Understanding rent control and raising rent.

The law you will want to look into for your region is usually called “rent control”. It’s the guideline for how much a landlord may raise rent yearly. Now, that sounds simple enough, right? Your tenant pays rent and the local law stipulates how much you can up that rent each year. But slow down, because this is a rabbit hole that runs deep, and lawbooks have a habit of flip-flopping on what is and is not legal.

Understanding rent control policy is essential when pricing your rental for the first time.

How rent control works in Ontario.

Here’s a quick history lesson: until 2017, rent control legislation in Ontario only applied to units that were first built or occupied before November 1, 1991. Then the rules changed. The Fair Housing Act was introduced, applying rent control provisions to all rental units regardless of their build or first occupancy date.

Naturally, this was disadvantageous to landlords. The policy did not last long. In 2018, the policy changed yet again.

The current rent control policy as of October 2019 in Ontario is that rent control rules only apply to residential buildings first occupied before November 15th, 2018. If the residence was occupied on or after that date, then the rent may be raised at the landlord’s sole discretion.

So yes, it is complicated. So much so that if you are reading this after 2019, it is worth double-checking the current policy. Rent control in Ontario has its own Wikipedia page, that’s impressive.

Legal ways to increase rent.

Now that we have got the definitions out of the way, here are the proper ways to go about increasing rent. These options may or may not apply in your area, so be sure to check your local laws and regulations before moving to increase rent.

The first question you need to ask yourself is whether or not rent control applies to you. For the rest of this article, we are going to assume that it does apply.

Now, you will need to review the rent increase guidelines for your area – here are Ontario’s for example. Generally speaking, rent increase guidelines are based on inflation and market conditions. So, if you have a tenant currently leasing your property, you will only be able to raise the rent once every 12 months and only to the maximum amount posted in the rent increase guidelines for that year.

YearMaximum increase (%)
20202.2
20191.8
20181.8
20171.5
20162.0
20151.6
20140.8
20132.5

The importance of giving notice.

As with most changes to the property or living conditions, landlords must submit written notice to the tenant at least 90 days before the planned change.

If you currently have a tenant, it may be frustrating to see rental rates rising around you while you are unable to increase your rent price to match. This has led landlords to find loopholes to evict their tenants so that they may increase rent as they wish. We’d like to caution any landlords considering this route.

Evictions can be messy, and if you are using a loophole to circumvent the intentions of the LTB in order to evict a tenant, they are often within their rights to file a suit to cover their costs incurred. That could mean paying out of pocket for their rent elsewhere and their moving costs to boot.

“Renovictions” are also a growing concern for municipalities. The term implies performing major renovations that require the tenant to vacate the property. Laws differ, but Torontonian tenants who know their rights may request to move back into the unit after the renovations are complete, meaning the landlord would be unable to increase rent and would be out of pocket for the renovations.

Deciding whether to raise rent.

For most landlords, finding a great tenant and pricing your rental unit right the first time is an ideal situation. Getting the most for your rental means knowing the market and the law. Besides, a bad tenant can end up costing far more than a slightly lower rental rate. We have seen it all too often, but with NaborlyShield, problem tenants become a thing of the past.

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