After a year of seeing no increase, most residential tenants should expect their rent to rise in 2022.
The Ontario government has approved an up to 1.2% rent increase — the smallest increase for rent controlled units since 2014. This is the maximum amount a landlord can raise rent without obtaining approval from the Landlord and Tenant Board (LTB).
Landlords can apply to the LTB for above-guideline increases if their municipal taxes and charges have increased by an “extraordinary” amount; their security services costs increased or they began providing security services for the first time; or they conducted and payed for significant renovations, repairs, replacements or new additions to the building or individual units.
The rent increase guideline is determined using the Ontario Consumer Price Index, which measures inflation calculated monthly by Statistics Canada using data that reflects economic conditions over the past year.
There are a few exceptions to the rent increase ‘rule.’ It does not apply to new residential rental units occupied for the first time after Nov. 15, 2018. In this case, a landlord can raise rent above the guideline, so long as proper notice is given.
Landlords may only raise rent if they give tenants at least 90-days written notice using the correct form (typically a N1). In addition, at least 12 months must have passed since the first day of the tenancy or the last rent increase.
Last year, Ontario passed unprecedented legislation freezing rent at the 2020 level for the vast majority of rented units covered under the Residential Tenancies Act as a way to help give Ontarians financial relief from the challenges of the COVID-19 pandemic. The rent increase freeze will end on Dec. 31.