Backgrounder - The 2012 Rent Increase Guideline

The annual Rent Increase Guideline is a calculation based on the Ontario Consumer Price Index by Statistics Canada.

The rent increase guideline applies to most private residential rental accommodation covered by the Residential Tenancies Act, 2006 (RTA).

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

TIMING OF RENT INCREASES

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.

CALCULATION OF THE GUIDELINE

The rent increase guideline is calculated under the Residential Tenancies Act, 2006, and is based only on the Ontario Consumer Price Index which is 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.

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).