Answers to Questions about Rent from Ontario Landlords Association Members
Ontario’s annual Rent Increase Guideline is released pursuant to the Residential Tenancies Act, 2006 (RTA) – the legislation that governs rental housing in Ontario. We believe this legislation balances the rights and responsibilities of both landlords and tenants.
Ontario’s annual Rent Increase Guideline is based on the Consumer Price Index (CPI) for Ontario – an objective and transparent measure that is calculated by Statistics Canada.
The 2012 Rent Increase Guideline is 3.1%. This guideline applies to a rent increase that begins any time between January 1, 2012 and December 31, 2012 and applies to most residential units in Ontario. However, other provisions of the RTA allow only one rent increase every 12 months, and require at least 90 days advance notice to tenants of a rent increase.
The guideline continues to be based on Ontario’s CPI. However, recent amendments to the RTA establish that, in future years, the annual Rent Increase Guideline will not be more than 2.5%. The recent amendments also require a review of the calculation for the guideline every four years.
The Rent Increase Guideline for 2013 is 2.5%.
The amended guideline formula is in line with the average Rent Increase Guidelines over the past five years (1.8%) and 10 years (2.1%).
Our approach provides stability and predictability for both renters and landlords during these uncertain times. However, our government recognizes that modest rent increases are necessary to ensure that landlords can properly maintain their rental properties.
Our government recognizes the valuable contribution that landlords make to the rental-housing market in Ontario. That is why landlords can continue to apply to the Landlord and Tenant Board for above-guideline rent increases for the following:
- extraordinary increases in the costs of municipal taxes and charges, or utilities;
- eligible capital expenditures; and
- increases in operating costs related to security services.
The RTA also contains several provisions to promote a healthy investment climate for rental housing:
- with regard to market rent, when units are vacant, landlords may negotiate rents with new tenants;
- rental units built or first occupied after November 1991 are exempt from the annual Rent Increase Guideline;
- the interest rate that a landlord must pay on the last month’s rent has been lowered from 6% and is now the same as the Rent Increase Guideline, which is based on Ontario’s CPI.
Once again, thank you for bringing your concerns to my attention. Please accept my best wishes.