Stabilizing the Rent Increase Guideline
An amendment to the Residential Tenancies Act, 2006 would, if passed, set Ontario's annual Rent Increase Guideline between one and 2.5 per cent beginning in 2013.
- The annual Rent Increase Guideline is a calculation based on the Ontario Consumer Price Index (CPI) which is calculated by Statistics Canada. CPI is a measure of inflation, or the rate of price change for goods and services bought by consumers.
- The Rent Increase Guideline applies to most private residential rental accommodation covered by the Residential Tenancies Act, 2006 (RTA).
- The guideline is the maximum amount that most landlords can increase a sitting tenant's rent during the year without making an application to the Landlord and Tenant Board.
- 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 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 it takes effect.
Based on the Ontario Consumer Price Index (CPI) the 2011 Rent Increase Guideline was 0.7 per cent. The 2012 Rent Increase Guideline is 3.1 per cent.
Sample Rent Increase Calculation Under the Proposed New Formula
The monthly rent of an apartment is $800 on August 1, 2012.
With 90 days written notice to the tenant, the landlord could lawfully increase the rent 12 months later on August 1, 2013.
Example 1: Ontario CPI for the previous 12 months is 2.7 per cent.
- Since CPI is above 2.5%, the Rent Increase Guideline is determined to be 2.5%
- The maximum rent increase is 2.5 per cent of $800 = $20
- Therefore, the new rent on August 1, 2013 could be up to $820 ($800 + $20)
Example 2: Ontario CPI for the previous 12 months is 2.3 per cent
- Since CPI is greater than 1.0% and less than 2.5%, the Rent Increase Guideline is determined to be 2.3 %
- The maximum rent increase is 2.3 per cent of $800 = $18.40
- Therefore, the new rent on August 1, 2013 could be up to $818.40 ($800 + $18.40)
Example 3: Ontario CPI for the previous 12 months is 0.9 per cent.
- Since CPI is less than 1.0%, the Rent Increase Guideline is determined to be 1%
- The maximum rent increase is 1.0 per cent of $800 = $8
- Therefore, the new rent on August 1, 2013 could be up to $808 ($800 + $8)
Previous Rent Increase Guidelines