Special COVID-19 rules about rent increases end December 31
The following excerpts are taken from On The Radar newsletter.
Many tenants will see their rent go up in 2022 for the first time since 2020. This is because, in most cases, the government of Ontario didn’t allow any rent increases in 2021. For tenants not covered by the rent increase rules of the Residential Tenancies Act (RTA), the increase could be a lot.
This issue of On The Radar looks at the rules in the RTA most landlords must follow if they want to increase rents in 2022.
The usual rules: a refresher
Starting on January 1, the usual rules about rent increases apply once again.
For tenants protected by the RTA, a landlord has to wait 12 months after the tenant moves in before they can raise the rent. And they can only raise the rent once every 12 months. For example, if a landlord increases the rent on January 1, 2022, they won't be able to increase it again until January 1, 2023.
A landlord must also give written notice of the rent increase to the tenant at least 90 days before the day the rent goes up. This means tenants whose rents are going up on January 1, 2022, should have received their written notice no later than October 3, 2021.
Landlords should give notice on one of the Landlord and Tenant Board (LTB) rent increase forms. The most common form used is the N1 Form. Landlords don't need to use the LTB forms, but their notice must have all the information that's on the LTB forms.
For most tenants covered by the RTA, there's also a maximum amount the landlord can increase the rent by each year. This maximum is called the "rent increase guideline" or the "guideline". The guideline is set each year by the Ontario government. In 2022, it's 1.2%.
But for some tenants covered by the RTA, a landlord can increase the rent by any amount, unless the rental agreement says otherwise. This is because the rules in the RTA about rent increase amounts don't apply to them. This exception applies to tenants who live in:
a building, mobile home park, or new addition that no one lived in on or before November 15, 2018
a self-contained apartment created after November 15, 2018, if the house it's in had no more than 2 units before that date, and:
the owner lived in another part of the house, or
the new apartment was created in an unfinished space, like a basement or attic.
Tenants not covered by the RTA
Some tenants are not protected by the RTA. For example, tenants who must share a kitchen or bathroom with their landlord, or the landlord's spouse, parent, or child. Those tenants should check what their rental agreement says about rent increases. If the agreement doesn't say anything about it, their landlord can increase their rent by any amount.
Special rules
Sometimes, landlords can increase the rent by an amount that's higher than the guideline. This can happen in 2 situations:
The tenant agrees to increase the rent by more than the guideline
The landlord applies to the LTB for a rent increase above the guideline ("AGI")
In the first situation, a tenant can agree to an increase above the guideline in exchange for something extra from the landlord. This could be an improvement to the rental unit, like adding a dishwasher or replacing carpets with hardwood flooring. Or it could be for something that appears on a government list of approved reasons to increase the rent at any time, like a new parking space or storage locker.
In the second situation, a landlord can apply to the LTB for permission to increase the rent by more than the guideline if they had certain extra costs:
the cost of security services
unusually high increases in property taxes
certain kinds of capital expenses, like major repairs expected to last at least 5 years.
In both cases, there's still a limit on how much the landlord can increase the rent. For example, for rent increases related to security services, the maximum increase is the guideline plus 3% each year for 3 years. In 2022, that means a maximum rent increase of 4.2%.
Getting help
The rules about how much and when a tenant's rent can increase are complicated. There are many exceptions to the rules. For example, when a landlord adds a service that's on the government list, they don't have to give 90 days' notice of the rent increase to the tenant. And they don't have to wait 12 months since the last rent increase.
It's a good idea for tenants to get legal help if their landlord wants to increase the rent above the 2022 guideline of 1.2%, or if they believe their landlord didn't give enough notice. Tenants can contact their local community legal clinic or a legal advice hotline like the one run by Pro Bono Ontario. Tenants must be financially eligible to get help from a community legal clinic.