The average cost of rent in Canada is on a steady incline. The latest data compiled by Rentals.ca shows that the average rental price for a Canadian property was nearly $1,900 per month in May of this year, representing a 3.7% month-over-month increase. Experts also say renters can expect prices to continue to rise.
With rent increases likely to be a reality for many Canadian renters, some may be wondering how to deal with rising costs or if there is any action they can take if they are hit with an increase.
Rules and regulations regarding renting vary from province to province, with each maintaining its own laws regarding the frequency and amount by which rental prices can increase. Ultimately, however, landlords have the right to raise the rent for their properties, as enshrined in each province’s Residential Tenancies Act (RTA), said Mark Melchers, a lawyer with Cohen Highley LLP in southwestern Ontario.
“It is the landlord’s legal right to increase the rent as permitted by the RTA,” he told CTVNews.ca in a phone interview Tuesday. “If the increase is up to the guideline amount and not above it … there’s really not much the tenant can do.”
However, certain requirements must be met by landlords when increasing rental prices.
In Ontario and British Columbia, for example, if a residential property is currently occupied by a tenant, the price can only be increased 12 months after the start of the tenancy or the last rent increase. Alberta has similar rules. However, vacant rental units in all three provinces can be valued at whatever amount both parties agree upon when entering into a lease.
When preparing to raise rents, landlords must notify their tenants in writing that the price will increase using an approved form, said Jeff Kahane, founder of the Alberta law firm Kahane. This is the case for every province and territory in Canada.
In Ontario and British Columbia, notice must be given at least 90 days or three months before the increase takes effect. This is also the case with periodic tenancies in Alberta, which involve renting on a month-to-month or week-to-week basis without a specific end date. However, the notice period may vary from province to province.
“It’s just that tenants have had a long enough heads-up conversation to figure out if they can continue to live where they’re living,” Zuzana Modrovic, staff attorney at the Tenant Resource and Advice Center (TRAC), told CTVNews.ca in a phone call. interview on Wednesday. TRAC is a non-profit organization based in British Columbia.
In Ontario, when they raise rent prices, landlords can only do so in accordance with annual guidelines set by the province, based on its Consumer Price Index. For 2022, that guideline is 1.2 percent, although that is expected to increase to 2.5 percent in 2023. There are also exceptions to this where landlords can increase rent above the guidelines, Melchers said, such as properties , occupied for the first time after November 15, 2018. Landlords can also apply to their provincial housing rent board or branch for permission to increase the rent above the provincial guidelines.
British Columbia landlords must follow a guideline similar to Ontario’s, based on the province’s consumer price index, which caps increases at 1.5 per cent for 2022. However, these guidelines vary from province to province.
“In Alberta, for example, there is no limit on how much a landlord can increase rent under the Residential Tenancies Act,” Judy Feng, a lawyer with the Alberta Center for Public Legal Education, told CTVNews.ca in a phone interview Wednesday.
WHAT CAN TENANTS DO ABOUT THE RENT INCREASE?
When notified that their rent will increase, tenants must decide whether they can handle the additional cost or whether they’re better off finding a cheaper place to live, Kahane said.
But as a first step, Melchers recommends that tenants make sure the rent increase notice is legal and meets all the requirements outlined in that province’s RTA.
If the notice is not served using the correct form or with the required notice amount, the increase is considered invalid and does not need to be paid, Melchers said. In addition, tenants can also challenge the validity of a rent increase if it’s above provincial guidelines and no exception has been made, Melchers said. This involves making an application to their province’s housing tenancy branch or tribunal. In Ontario, this application must be made within 12 months of the increase.
“I’ve seen mistakes where tenants don’t contest a rent increase that could have one of these problems,” Melchers said. “The tenant just pays their rent and doesn’t do anything about it. By the time they decide to do something about it, it’s too late.
Kahane said he has also witnessed situations where tenants in Alberta have been served notices by landlords that were not valid, but have not challenged them. He pointed to a recent situation where a buyer served an eviction notice on a tenant before the property was sold, even though he had no right to do so.
“What often happens is people don’t pay attention to their own rights and just go with the flow,” Kahane told CTVNews.ca in a phone interview Wednesday.
That’s also happening among renters in British Columbia, Modrovich said. With a cap on rent increases in place, it can be more tempting for landlords to evict their current tenant and sign a new lease with another tenant set at a higher price, she explained. As a result, tenants may not be as keen to start disputes with their landlords about rent increases for fear of being evicted, Modrovich said.
“Everybody in British Columbia … knows it’s an extremely tight market [and] tenants are afraid to rock the boat,” she said. “Often, tenants will get an illegal rent increase and choose to just pay it because they basically don’t want their landlord to start making efforts to evict them.”
In these situations, it’s important for tenants to remain vigilant and be mindful of their rights, Kahane said. A number of resources related to rent increase and litigation guidelines can be found online, through websites run by provincial governments as well as law schools across the country, he said. He recommends contacting legal experts and housing rental offices with any questions.
“It’s not always easy [for tenants] to get the help they need, or they may not even know they need help,” Kahane said. “It all comes down to education and making sure you’re informed every time you enter into a lease. And read your lease, make sure you know the terms of your lease.
Another option on the table for tenants facing a rent increase is to try to negotiate with their landlord to reach an agreement that works for both parties. While it is ultimately up to the landlord to decide whether or not to go through with the increase, there may be some situations where the landlord may prefer to continue with their existing tenant rather than trying to find a new one, especially in cities with many vacancy rates, such as Calgary and Edmonton, Feng said.
“In reality, the landlord may be more interested in keeping a good tenant than just getting a little extra cash,” she said. “There may be room for negotiation with a tenant there.”
Below are some links to provincial and territorial guidelines on rent increases:
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