Ontario Announces 2012 Rent Increase Guideline

by | Aug 1, 2011 | Rental Property Management Tips

Next year, Ontario landlords can increase rent by 3.1 per cent without making an application to the Landlord and Tenant Board.

This guideline applies to rent increases between January 1 and December 31, 2012.

Ontario’s annual Rent Increase Guideline currently is based on the Ontario Consumer Price Index (CPI), which is a measure of inflation calculated monthly by Statistics Canada.  The 2012 rent increase guideline was calculated by averaging the percentage increase in the Ontario Consumer Price Index during the previous 12 months from June 2010 to May 2011.

The average yearly increase from 2004-2011 was 1.89 per cent.  The average yearly increase from 1993 – 2003 was 3.17 per cent.

The rent increase guideline applies to most private residential rental housing. The guideline does not apply to:

Vacant residential units

Residential units first occupied on or after November 1, 1991

Social housing units

Nursing homes

Commercial property 

In most cases, the rent for a unit can be increased if at least 12 months have passed since a tenant first moved in, or if at least 12 months have passed since the last rent increase. 

A tenant must be given proper written notice of a rent increase at least 90 days before the rent increase takes effect.

Sample Rent Increase Calculation

The monthly rent of an apartment is $800 beginning August 1, 2011. 

With proper written 90 days notice to the tenant, the landlord could lawfully increase the rent 12 months later on August 1, 2012.

For example:

The guideline for 2012 is 3.1 per cent.
The rent increase is 3.1 per cent of $800 = $24.80.

Therefore, the new rent on August 1, 2012 could be up to $824.80 ($800 + $24.80).

Application for Rent Increase Above the Guideline

A landlord can apply for a rent increase above the guideline for any of the following reasons:

The landlord’s costs for municipal taxes and/or utilities (heat, water and electricity combined) have increased by an “extraordinary” amount.  

The landlord did extraordinary or significant renovations, repairs, replacements or new additions to the building or to individual units. This type of work is called a “capital expenditure”. 

The landlord’s costs for security services increased, or the landlord began providing security services for the first time. 

For more information on application for rent increase above the guideline, contact the Landlord and Tenant Board.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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