Ontario’s 2011 Rent Increase Disappoints Landlords

by | Jul 30, 2010 | Rental Property Management Tips

2011 Rent Increase Lowest in 35 Years

The Ontario government announced that the province’s rent increase guideline for 2011 is set at 0.7%.  The increase represents the maximum percentage by which a landlord can increase the rent for most sitting residential tenants without approval from the Landlord and Tenant Board.

The 2011 guideline is the lowest figure for Ontario landlords in three decades. By contrast, Ontario’s cap this year is set at 2.1%, while British Columbia’s allowable rent increase for 2010 is 3.2%.

The new rent increase guideline governs rent increases that begin any time between January 1, 2011 and December 31, 2011 and applies to most residential units in Ontario. In most cases, the rent for a unit can be increased if at least 12 months have passed since the tenant first moved in or since his or her last rent increase. The tenant must be given proper written notice of the rental increase at least 90 days before the rent increase takes effect.

The guideline was designed to take into account increases in landlords’ building maintenance and operating costs in order to protect tenant safety and health.

Some landlords are not impressed.

If fact, property manager and Sales Representative David Pylyp with RE/MAX Realty Specialists Inc., in Toronto has no plans to raise rents at all because he is concerned that, while the increase will do little to offset increased costs, asking for it will have a larger negative impact on the relationship with the tenants. “With financing at 2.6% (variable rate) and a low occupancy rate, I’m not willing to risk making the tenants angry for a less than 1% increase. That’s like saying, ‘Dear Great Paying Tenant, your rent of $1,800 is being increased by $13.’ They would hate that landlord every month,” he explains. Pylyp knows many landlords who feel the same way.

The annual rent increase guideline is based on the Ontario Consumer Price Index (CPI). The Consumer Price Index is released monthly by Statistics Canada and is regarded as a reliable measure of inflation.

Guideline Deviations

Landlords may apply to the Ontario Landlord and Tenant Board for permission to increase rent above the guideline if they can demonstrate that their costs for municipal taxes or utilities have increased by more than the guideline plus 50%. Landlords may also apply for an increase above the guideline for operating costs related to security services and for eligible capital expenditures.

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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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