Rent Increase Capped At 1.8% In 2018

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Devry Smith Frank LLP

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Under Ontario law, rent increases can not exceed 2.5 per cent.
Canada Real Estate and Construction

Under Ontario law, rent increases can not exceed 2.5 per cent. However, under the new housing reforms, the Liberal government extended their rent control to buildings since 1991 and landlords are required to apply to authorities if they are seeking to increase rent by more than 1.8 per cent next year.

The Ontario Ministry of Housing set the rate at 1.8 per cent last Friday, basing it on the provincial consumer price index.

These protections come after a series of "unreasonable" rent increases and tenants being evicted from their units by their landlords. Landlords will now face a penalty if they evict tenants for personal reasons such as moving in a family member. Additionally, Premier Kathleen Wynne implemented this as part of their housing reforms in order to cool down the then-overheated housing market in April, when units built after 1991 were showing evidence of rent and sale price increases.

There are exceptions to this cap. The cap does not apply to:

  • Vacant units
  • Social housing
  • Nursing homes
  • Commercial properties

If a landlord makes improvements to their units, they have the option to apply to the Landlord and Tenant Board for increases (no more than 2.5 per cent).

As a result, 250,000 tenants will be protected and 1.2 million private rental units will have to follow the new rent cap.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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