How Do Rental Rate Increases in Ontario Work?

In Ontario, the Residential Tenancies Act sets the rules for rent, including guidelines for when and how landlords can increase rent. The Act also provides a process for tenants to dispute a rent increase if they feel it is too high. In this blog post, we will provide an overview of the rules around residential rate increases in Ontario so that you can be informed about your rights and responsibilities as a landlord or resident.  

When and How Much Landlords Can Increase Rent  

In Ontario, landlords can only increase rent once every 12 months, and the amount of the increase cannot be more than the guideline set by the province. For 2023, the guideline is 2.5%. This means that when you sign a lease on June 1, 2022 with current rent of $1,000 per month, you can only be charged up to $1,025 per month starting on June 1, 2023, and your landlord would need to provide you with written notice at least 90 days before June 1, 2023. 

You should also be aware that landlords cannot charge any new or increased fees for services that were included in your rent when you first moved in (e.g., parking, laundry). The only exceptions to this rule are if you request a change to the rental agreement (e.g., adding someone to the lease) or if there is an extraordinary increase in costs beyond the landlord’s control (e.g., a significant increase in hydro rates).  

The Government of Ontario has provided a brief guide to understanding rental increases for this coming year 2023. One important change to note is the way the rent increase is calculated.  The guideline applies to most private residential rental units covered by RTA but there are also exceptions enumerated particularly for landlords who can apply to the Landlord and Tenant Board for approval to raise the rent(PDF) by more than the rent increase guideline, In care homes (such as a retirement home), new buildings, and additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018. You may visit this link for more details! 

Tenant Protection from Unreasonable Rent Increases   

The Residential Tenancies Act provides tenants with protection from unfair or unreasonable rent increases. If you believe your landlord has incre applies to most private residential rental units covered by used your rent unfairly, you have the right to file a complaint with the Landlord and Tenant Board (LTB). You must do this within 90 days of receiving notice of the increase.   

Upon review, the LTB may decide that the rent increase is reasonable and order you to pay the increased amount of rent. Alternatively, the LTB may find that the rent increase was excessive and order a reduction in your rent back to the previous amount. If you have already paid the increased amount of rent, you would be entitled to a refund for any overpayment.  It is important to note that even if your complaint is successful and your rent is ordered to be decreased, your landlord can still apply to the LTB once every 12 months to try again to raise rent by following all of the rules set out in the Residential Tenancies Act.   

The rules around residential rate increases in Ontario can be complex. However, it is important for landlords and residents to be aware of their rights and responsibilities under provincial law. If you have any questions about how these rules apply to your specific situation, please contact us at help@portsmouth.ca for assistance. We would be happy to help you resolve any issues about rent control so that you can enjoy a peaceful and productive tenancy agreement.  

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