You’re a landlord and to cover your rental’s expenses, you may need to increase the rent. Depending on provinces, rent increases must respect certain timeframes and maximum increase percentages. Read the 5 steps to a successful rent increase.
1. Make sure your increase is legal
Ontario and B.C. governments put in place policies to make housing accessible and affordable. In response to tighter and tighter rental markets, rent increases are subject to a maximum percentage.
- In Ontario, it’s 1.8% for 2018 and applicable for the current calendar year. This is based on the Ontario Consumer Price Index. This guideline doesn’t apply to vacant properties or social housing. You could increase your rent above this guideline in some circumstances including when renovations have been done.
- In British Columbia, the maximum increase authorized for 2018 is 4%. You could ask your tenants to voluntarily agree to a rent increase greater than the allowable amount.
In Quebec, it’s the Régie du Logement who establishes the Regulation respecting the criteria for the fixing of rent.
For rental owners in Montreal, there’s a property tax increase in 2018. If you don’t pass it onto your next rent increase, it’s at your expense.
To help you calculate the rent increase of your rental in accordance with applicable laws, please refer to the tool of your province:
- In Ontario, the Landlord and Tenant Board provides instructions.
- In British Columbia, it’s Residential Tenancy Branch‘s tool.
- In Quebec, it’s the Régie du logement‘s calculator.
Rent increases aren’t regulated in Alberta. So you can increase your rent without any limitation.
2. Send a written notice to your tenant
You must notify your tenants of their rent increase in writting. This makes it official and gives you proof in case of disagreement. Here are the recommended forms:
- For Ontario, download here the N1 Form.
- For British Columbia, download here the RTB-7 Form.
- For Quebec, download here the Régie du logement Form.
- For Alberta, the written notice must only indicate the effective date of the rent increase and must be dated and signed by the landlord.
3. Respect the proper timeframe
Usually you must notify your tenants of their rent increase 90 days before the effective date and you can only increase the rent once a year. So if you have a 12-month lease ending on June 30th, you must advise your tenant before March 31st.
In Quebec, the notice timeframes change according to the rental’s length. It varies between 10 days when renting out a room and up to 6 months in advance for rental of 12 months or more.
4. Wait for your tenant’s reply
If your tenant doesn’t communicate with you, it’s an implied agreement. The increase will be effective as from the date written on your notice.
- In Quebec, your tenant has a month once he receives the notice to react. If he refuses, he must provide you with a written notice. You will negotiate to find an agreement. If you can’t find any, you can ask the Régie du Logement to arbitrate.
- In Ontario, if there are serious outstanding maintenance issues, the tenant can try to block the increase by applying to the Landlord and Tenant Board.
- In British Columbia, the tenant can’t refuse a rent increase if it respects allowable amount.
5. Rely on your good relationship with your tenant
Don’t make the rent increase the only contact you have with your tenant during the year. It will always be easier to get it approved if you have a good relationship with your tenant. Read our 10 secrets to a successful landlord-tenant relationship.