Increasing the Rent

• Author: John Dickie/David Lyman
• Pages: 215-235

215

16

Increasing the Rent

Learning Outcomes

After reading this chapter, you will be able to:

• Explain the guideline rent increase and when a

landlord may take it

• Describe what has to be done for a landlord to take

a valid rent increase

• Explain some examples of rent discounts that do not

affect the lawful rent

• Calculate the lawful rent when different rent

discounts have been given, within the examples

shown in the text

• State where to find the rules about rent discounts

• Explain the validation process for rent increases that

are initially invalid

• Identify the situations in which a landlord may bring

an application for an above-guideline rent increase

• Recount the procedure to bring an application for an

above-guideline rent increase

• Identify when a capital expenditure is deemed eligible

in an above-guideline increase application

• Explain the rules of the RTA that apply if a hearing is

conducted for an above-guideline increase application

• Identify the additional services or facilities that allow

increases in a tenant’s rent without requiring a notice

of rent increase

• Recognize that an approved form must be used in an

agreement for a rent increase above the guideline

under section 121 of the RTA

The Guideline .......................... 216

The 12-Month Rule ..................... 217

Written Notice of Rent Increase .......... 217

What Is Lawful Rent? ................... 218

Discounts .............................. 218

Lawful Discounts .................... 219

Calculating the Lawful Rent ............ 220

Discounts in Oral Tenancy Agreements .... 222

Discounts in Subsequent Years ........... 222

Validation of Initially Illegal

Rent Increases ...................... 223

Increasing the Rent by More than the

Guideline .......................... 223

Increasing the Rent by Application ....... 224

Extraordinary Operating Cost Increases in

Municipal Taxes .................. 224

Capital Expenditures .................. 225

Security Services ..................... 226

Procedure .......................... 227

Written Hearings .................... 229

Other Procedural Issues ............... 229

Extent of Rent Increase and Phase-In ..... 230

Costs No Longer Borne:

Capital Expenditures .............. 230

Specialized Representatives ............. 230

Increasing the Rent by Agreement ....... 231

Agreed Increase for Prescribed Services

andFacilities .................... 231

Amount of Increase .................. 232

Details of the Agreement .............. 232

How the Parties Usually View Rent Increases

for Parking ...................... 233

Agreed Increase for Capital Expenditures or

Additional Services ................ 233

Review Questions ...................... 235

© [2022] Emond Montgomery Publications. All Rights Reserved.

216 WORKING WITH THE RESIDENTIAL TENANCIES ACT

This chapter deals first with the annual rent increases to which a landlord is auto-

matically entitled and the validation of initially illegal rent increases under the Residen-

tial Tenancies Act, 2006.1 The topics covered are the rent-increase guideline, the

12-month rule, the rule concerning the 90-day written notice of rent increase, and

rent increases for new tenants 12 or more months after occupancy began.

The chapter then covers the various rules about rent discounts. That includes dis-

counts that do not affect the lawful rent, and the calculation of the lawful rent when

different rent discounts have been given.

The chapter then covers the various rent increases a landlord can take if an applica-

tion is approved by the Landlord and Tenant Board, as well as the various rent increases

a landlord can take when an agreement is made with a tenant. Chapter 17 covers

tenant applications about the amount of the rent.

The Guideline

Rent control restricts the amount of rent that could otherwise be charged in a free-

market environment, as well as the timing of rent increases. Rent control has been in

place in Ontario since 1975.

At an appropriate rent-increase date, a landlord in Ontario has the ability to raise

the rent in accordance with a guideline that is announced each year by the govern-

ment. The guideline for the calendar year is determined using the Consumer Price

Index for Ontario, averaged over a 12-month period.

During the entire history of peacetime rent control, except for the year 2021, land-

lords in Ontario have been allowed to take a guideline rent increase every 12 months

without any specific government approval. See the box below for the special rules that

applied in 2021.

1 SO 2006, c 17 [RTA].

Limitations to This Book to Be Aware Of

In many other areas of this textbook, the authors have sought to provide enough

information for readers to act for themselves or as representatives (if they are oth-

erwise qualified to do so as discussed in Chapter 11). However, we do not expect

that a reader will gain anything more than a very basic understanding of the rules

about above-guideline rent increases, and the rules about rent discounts, which are

two of the topics covered in this chapter. Rather than providing comprehensive

coverage of those two topic areas, the book’s goal is to give readers a sense of how

those rules work.

Properly making decisions or advising about above-guideline rent increases would

require a very careful study of section 126 and sections 18 through 34 of O Reg

516/06, as well as learning more details of the calculations and processes of these

applications than the information provided in this textbook.

Properly making decisions or advising about specific discounts would require a

careful study of section 111 and sections 10 through 14 of O Reg 516/06, especially

section 12, as well as reading the content of this textbook.

© [2022] Emond Montgomery Publications. All Rights Reserved.