2022 Ontario Rental Increase Guidelines

Wednesday Sep 08th, 2021

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The rental Increase guideline for Ontario rentals has been set to 1.2% in 2022. Previously in 2021, legislation was passed to freeze rents for the majority of rental properties at 2020 levels, to provide financial relief to Ontarians during the COVID pandemic. 
 
Does this apply to you?
 
Rental increases are neither mandatory nor automatic so it is up to the landlord if they wish to implement them. The guideline applies to most residential rental accommodations covered by the Residential Tenancies Act. It does not apply to:
- Rental units in buildings occupied for the first time after November 15, 2018
- Social housing units
- Long Term Care Homes
- Commercial rentals 
 
1.2% is the maximum amount Landlords can increase a Tenant’s rent by, without approval from the Landlord Tenant Board. Also, 12 months will need to have passed from either the 1st day of tenancy or the last rental increase, before a rental increase can be implemented.
 
How do you increase the rent?
 
Landlords must provide at least 90 days notice for the rental increase to take place, using the correct form which is the N1 form in most cases. The rental increase will take place on the day that the rent is due, as long as at least 90 days notice was given of the increase. Even though there is a rental increase freeze until December 31, 2021, Landlords are able to provide notice of a rental increase that comes into effect on January 1, 2022 onwards.
 
It would be timely to also “top up” the last month’s rent deposit since the amount being held by the Landlord is designated to be applied against the last month’s rent is the original amount and would not cover the new post-increase rent. We also typically calculate the interest due to the Tenant on the last month’s deposit and net out all of the calculations in a one-time adjustment.
 
How we can help
 
We can provide you with an update on the rental market and a valuation on what the current market rent is for your rental property. Sometimes that is helpful when deciding on whether to increase the rent or not. Our overall recommendation is to increase the rent on an annual basis, but every situation may be different. 
 
We can also help perform the necessary calculations or the completion of the necessary forms. Further assistance regarding Landlord/Tenant rights and what is prohibited/permitted under the Residential Tenancies Act can be found through the Landlord Tenant Board. 

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