Last week it was announced that the new Ontario rent increase guideline for 2020 will be 2.2%, up from 1.8% which it’s been for the last two years. This is the maximum percentage a landlord can increase a tenant’s rent without getting special approval from the Landlord and Tenant Board.
How is the Ontario Rent Increase Guideline Calculated?
According to the Ontario government’s rent increase guideline page, the 2020 guideline is calculated based on data that looks at inflation and economic conditions from June 2018 to May 2019.
Who Isn’t Affected by the Ontario Rent Increase?
Not all renters will be affected by the higher rent increase. Under Premier Ford’s recent changes to rent control, those renters who are occupying or plan to occupy a rental unit that was leased for the very first time after November 15, 2018 are exempt from rent control. This means they are susceptible to an increase in rent decided upon by their landlord, which can be more or less than 2.2%.
Beyond those that are not affected by rent control are:
- commercial leases
- nursing homes
- social housing
- vacant residential units
When Can a Landlord Increase Rent?
If a landlord plans to increase their tenant’s rent, they can only do so 12 months after the original lease date or 12 months after the previous rent increase. Landlords must also give 90 days notice to their tenants of the intended rent increase.
For instance, if your tenant’s lease began on July 1, 2019 you would be eligible to increase their rent on July 1, 2020 so long as you give them written notice of the rent increase no later than April 1, 2020.
Calculating Your Ontario Rent Increase 2020
Whether you started renting on July 1, 2019 or your rent was previously increased on July 1, 2019 to $2,000 a month, your next eligible rent increase can be no earlier than July 1, 2020 and no higher than 2.2% or $44 per month.
$2,000 x 0.022 = $44
Your new rent rate would be $2,044 per month. Remember that in this example, you must be given notice of the rent increase no later than April 1, 2020.
Can a New Landlord Increase Rent in Ontario?
If a landlord sells their rental property to a new owner who intends to continue to rent out the unit, the new landlord must follow the same rent increase guidelines. A tenant’s lease agreement and all of its details are inherited by the new landlord and they can only increase their tenant’s rent by the Ontario guideline amount 12 months after the original lease date or 12 months after the previous rent increase provided they give the mandatory 90 days notice.
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