Rent Increase Guidelines 2011
Each year the Ontario government announces the province’s rent increase guideline for the following year. The annual rent increase guideline is the maximum percentage by which a landlord can increase the rent for most sitting residential tenants without approval from the Landlord and Tenant Board.The 2011 guideline is 0.7 per cent.
The new rent increase guideline applies to a rent increase that begins any time between January 1, 2011 and December 31, 2011 and applies to most residential units in Ontario.
In most cases, the rent for a unit can be increased if at least 12 months have passed since the tenant first moved in or since his or her last rent increase. The tenant must be given proper written notice of the rental increase at least 90 days before the rent increase takes effect.
The guideline was designed to take into account increases in landlords’ building maintenance and operating costs in order to protect tenant safety and health.
THE GUIDELINE FORMULA
The annual rent increase guideline is based on the Ontario Consumer Price Index (CPI). The Consumer Price Index is released monthly by Statistics Canada and is widely regarded as a reliable and objective measure of inflation.
The 2011 rent increase guideline is calculated by averaging the percentage change in the Ontario Consumer Price Index during the previous 12 months from June 2009 to May 2010.
SAMPLE RENT INCREASE GUIDELINE
The monthly rent of an apartment is $800 beginning August 1, 2010. With proper written 90 days notice to the tenant, the landlord could lawfully increase the rent 12 months later on August 1, 2011.
The guideline for 2011 is 0.7 per cent.
The rental increase is 0.7 per cent of $800 = $5.60.
Therefore, the new rent on August 1, 2011 could be up to $805.60 ($800 + $5.60).
ABOVE GUIDELINE INCREASES
Landlords may apply to the Landlord and Tenant Board for an increase above the guideline, if their costs for the municipal taxes or utilities have increased by more than the guideline plus 50 per cent.
Landlords may also apply for an increase above the guideline for operating costs related to security services and for eligible capital expenditures.
SAMPLE ABOVE GUIDELINE INCREASE
The 2011 rent increase guideline is 0.7 per cent. 50 per cent of this guideline is 0.35 per cent.
To claim an above guideline increase related to municipal taxes, costs should increase by more than 1.05 per cent (0.7 per cent + 0.35 per cent = 1.05 per cent.)
In 2010, a landlord’s municipal taxes were $10,000.
In 2011, the landlord’s municipal taxes increased to $10,500 -- an increase of 5 per cent.
Therefore, the landlord is eligible to apply for an above guideline increase because the landlord’s municipal taxes increased by more than 1.05 per cent.
PAST GUIDELINES
Year |
Guideline % |
Year |
Guideline % |
Year |
Guideline % |
2010 |
2.1 |
1998 |
3.0 |
1986 |
4.0 |
2009 |
1.8 |
1997 |
2.8 |
1985 |
6.0 |
2008 |
1.4 |
1996 |
2.8 |
1984 |
6.0 |
2007 |
2.6 |
1995 |
2.9 |
1983 |
6.0 |
2006 |
2.1 |
1994 |
3.2 |
1982 |
6.0 |
2005 |
1.5 |
1993 |
4.9 |
1981 |
6.0 |
2004 |
2.9 |
1992 |
6.0 |
1980 |
6.0 |
2003 |
2.9 |
1991 |
5.4 |
1979 |
6.0 |
2002 |
3.9 |
1990 |
4.6 |
1978 |
6.0 |
2001 |
2.9 |
1989 |
4.6 |
1977 |
8.0 |
2000 |
2.6 |
1988 |
4.7 |
1976 |
8.0 |
1999 |
3.0 |
1987 |
5.2 |
1975 |
8.0 |
GUIDELINE AND RENT DEPOSITS
A landlord can collect a rent deposit from a new tenant on or before the start of a new tenancy. The rent deposit can only be used as the rent payment for the last month or week before the tenant moves out. The landlord must pay the tenant interest on the rent deposit every year.
Under the Residential Tenancies Act, the interest rate is the same as the rent increase guideline.
ADDITIONAL INFORMATION
The Landlord and Tenant Board provides information to the public through a network of offices across Ontario. The Board can be reached by calling toll-free 1-888-332-3234 (outside Toronto area) or 416-645-8080 (from within the Toronto area). Information is also available on the Board website at www.ltb.gov.on.ca
A copy of the Residential Tenancies Act, 2006, can be ordered from ServiceOntario Publications by calling 416-326-5300 or toll-free 1-800-668-9938, or online at www.publications.gov.on.ca. The text of the Residential Tenancies Act, 2006 can also be located on the e-Laws website at www.e-laws.gov.on.ca