The average price of rent in Canada is on a steady incline. The latest data compiled by Rentals.ca shows that the average rent price for a Canadian property was nearly $1,900 per month in May of this year, representing a 3.7 per cent rise month-over-month. Experts also say tenants can expect to see prices continue to climb.
With a rent hike likely to be the reality for many Canadian tenants, some may be wondering how to navigate rising costs, or whether any course of action can be taken if they’re slapped with an increase.
Rules and regulations around renting vary from province to province, with each one maintaining its own laws around the frequency and amount by which rent prices can increase. Ultimately, however, landlords do have the right to raise the price of rent on 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's a statutory right for a landlord to increase rent as permitted by the RTA,” he told CTVNews.ca in a telephone interview on Tuesday. “If the increase is up to the guideline amount and not over it … there is not really much a tenant can do.”
Certain requirements, however, must be met by landlords when increasing rent prices.
In Ontario and British Columbia, for example, if a residential property is currently occupied by a tenant, the price can only be raised 12 months after the start of the tenancy or the most recent rent increase. Similar rules are in place in Alberta. Vacant rental units in all three provinces, however, can be priced at whatever amount both parties agree to when entering into a lease agreement.
When preparing to raise rent prices, landlords must give their tenants written notice that the price is going to increase using an approved form, said Jeff Kahane, founder of Kahane Law Office in Alberta. 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 prior to the increase taking effect. This is also the case for periodic tenancies in Alberta, which involve renting on a month-to-month or week-to-week basis without a concrete end date. The notice period, however, can vary between provinces.
“It’s just so that tenants have a long enough heads-up to figure out whether they can continue to live where they live,” Zuzana Modrovic, a staff lawyer with the Tenant Resource and Advisory Centre (TRAC), told CTVNews.ca in a telephone interview on Wednesday. The TRAC is a non-profit organization based in British Columbia.
In Ontario, when increasing rent prices, landlords are only able to do so according to an annual guideline set out by the province, based on its consumer price index. For 2022, that guideline is 1.2 per cent, although it’s expected to increase to 2.5 per cent in 2023. There are also exemptions to this whereby landlords can increase rent beyond the guideline, Melchers said, such as with properties occupied for the first time after Nov. 15, 2018. Landlords can also apply to their province’s residential tenancy board or branch for permission to increase rent above the provincial guideline.
Landlords in B.C. must follow a guideline similar to the one in Ontario, based on the province’s consumer price index, which caps increases at 1.5 per cent for 2022. These guidelines do, however, 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 staff lawyer with the Centre for Public Legal Education Alberta, told CTVNews.ca in a telephone interview on Wednesday.
WHAT CAN TENANTS DO ABOUT RENT INCREASES?
When notified that their rent price will increase, tenants have to decide whether they can handle the additional cost or are better off finding a cheaper place to live, said Kahane.
But as a first step, Melchers recommends that tenants make sure the rent increase notice is lawful 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 amount of notice, the increase is considered void and doesn’t need to be paid, Melchers said. Additionally, tenants are also able to challenge the validity of a rent increase if it’ is above the provincial guideline and no exemption was made, said Melchers. This involves filing an application with their province’s residential tenancy branch or tribunal. In Ontario, this application must be filed within 12 months of the increase.
“I've seen mistakes where tenants are not challenging a rent increase that may have one of these issues,” 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 were served notices by landlords that were not valid, but didn’t challenge them. He pointed to a recent situation where a buyer had given an eviction notice to a tenant before the property had been sold, despite not having the right to do so.
“What frequently happens is that people don't pay attention to their own rights and just kind of go with the flow,” Kahane told CTVNews.ca in a telephone interview on Wednesday.
This also happens among tenants in B.C., Modrovic said. With a limit on rent increases in place, it can be more enticing for landlords to evict their current tenant and enter into a new lease agreement with a different tenant set at a higher price, she explained. As a result, tenants might not be so keen on launching disputes with their landlords over rent increases out of fear they’ll be evicted, said Modrovic.
“Everybody in B.C. … knows that 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 don't want their landlord to start taking efforts to evict them, essentially.”
In these situations, it’s important tenants stay vigilant and are mindful of their rights, Kahane said. A number of resources pertaining to rent increase guidelines and filing disputes can be found online, through websites managed by provincial governments, as well as law schools across the country, he said. He recommends reaching out to legal experts and residential tenancy offices with any questions.
“It's not always easy [for tenants] to get the help they need, or they may not even know that they need help,” Kahane said. “It comes down to education and making sure you're informed anytime you enter into a lease agreement. And read your lease, make sure that you know the terms of your lease.”
Another option that’ is on the table for tenants faced with a rent increase is to attempt negotiations with their landlord to come to an agreement that works for both parties. While it’s ultimately up to the landlord to decide whether or not to go through with the increase, there may be some situations where a landlord may prefer to continue with their existing tenant rather than trying to find a new one, especially in cities with high vacancy rates, such as Calgary and Edmonton, Feng said.
“In reality, a landlord may actually be more interested in keeping a good tenant than just receiving a little extra money,” she said. “There could be some room for a tenant to negotiate there.”
Below are some links to provincial and territorial guidelines on rent increases:
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