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How much rent can a landlord charge?

When you first rent a place, you and your landlord agree on the rent you will pay. In most cases, the rent can be any amount that you both agree on.

Your rent could include things like:

  • electricity
  • cable
  • parking
  • cleaning
  • meals

Make sure your rental agreement or lease clearly says what is included and what is not included.

Future rent increases

In most cases, your landlord must wait a year before raising your rent and must give you 90 days' written notice.

Usually your landlord cannot increase your rent more than the "Guideline" percentage which is set by the government each year. But some places, including units in newer buildings, are not covered by the Guideline.

It is important to find out if your place is covered by the Guideline. If it is not covered, your landlord can raise your rent as much as they want after a year.

If your rental agreement has any discounts, this could also affect future rent increases.

In some situations, there might be an Order Prohibiting Rent Increase (OPRI). An OPRI means the rent can't be above a certain amount until the landlord does repairs.

This situation is extremely rare, so it is unlikely that your new unit will be affected by an OPRI. If your unit is affected, your landlord has to tell you before you move in.

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Check the rental agreement

If you are renting a new place, make sure the written rental agreement lists what's included. For example:

  • energy, such as electricity or gas
  • cable
  • parking
  • locker or storage space
  • laundry room
  • gym
  • cleaning services

Before you sign, make sure the written agreement accurately says what you and the landlord are agreeing to.

It is usually best to have a written agreement. But if there is no written agreement, speak to your landlord to make sure you both have the same understanding of what you are agreeing to and what is included in your rent.

If you are renting in a care home, for example, a retirement home, there must be a written rental agreement that lists the costs of any services not included in your rent. And the landlord must give you an information package before you sign a rental agreement.

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Find out if the unit is covered by the rent increase Guideline

When you rent a place, it is important to know if you will be protected by the rent increase Guideline. Most rental units are covered, which means that the landlord can only raise the rent a certain amount each year.

By the end of each August, the government announces the percentage for the following calendar year. For 2016, the Guideline amount is 2%. For 2015, the amount was 1.6%. The Guideline for 2017 will be 1.5%.

You are not covered by the Guideline if you are renting a subsidized unit, which is sometimes called Rent Geared to Income (RGI) housing. There are other rules about how much rent you have to pay, usually based on your family size and household income.

Some other types of rental units aren’t covered by the Guideline. You are not covered if:

  • no one lived in your building before November 1, 1991 (for example, the building was originally a warehouse or factory and was later changed to residential use),
  • your unit was not occupied for any purpose before June 17, 1998 (for example, it is a new addition or in a new building completed after 1998), or
  • you share a kitchen or bathroom with the landlord or their close family members.

In these situations, the landlord can raise your rent as much as they want after the first year, as long as they give you 90 days' notice in writing. If you share a kitchen or bathroom, they don’t even have to wait a year, or give you 90 days' notice, unless your rental agreement says they do.

If you are not protected by the rent Guideline, a landlord may give you a really good price for the unit in the first year but then raise your rent a lot the next year. One warning sign is if the advertised rent is much lower than what other tenants are paying in the same area or the same building.

Understand how rent "discounts" work

You should check the rental agreement for any "discounts" your landlord might be offering. Make sure you understand how much you will really be paying.

Some landlords will give you a discount on your rent when you sign your lease. But after your discount period is over, you have to pay the higher, non-discounted rate every month.

And after the first year, the landlord could raise your rent based on the full rate – not the discounted rate. This means you could find your rent increasing a lot more than the Guideline, even if your unit is covered by the Guideline.

For example, your agreement says your rent is $1200 but you only have to pay $1050 per month for the first 8 months. In the 9th month the discount will end and your rent will go up to $1200.

If you are covered by the Guideline

If the rent increase guideline is 2%, then in the above example your rent after the first year could go up to $1200 plus 2%, which comes to $1,224. This would be a 22.4% increase over what you were paying for the first 8 months.

But the landlord is allowed to do this only for the following kinds of discounts:

  • up to 3 months of free rent in any 12-month period, which must only be given in rent-free periods
  • a total discount of up to 1 month's rent given anytime over the first 8 months of a 12-month rent period
  • a total discount of up to 1 month's rent given anytime over the first 7 months, plus up to a 1 month rent-free period in the next 5 months after that
  • a discount of no more than 2% for rent being paid early or on time (this is the only discount that does not have to be in writing)

Landlords can offer any other kinds of discounts but they will not be allowed to apply a future Guideline rent increase to the full rent. Instead, future increases will be based on either the lower, discounted rent or some other amount. The rules for figuring out this amount are extremely complicated.

If your rental unit is not covered by the Guideline, then these rules don't matter because the landlord can increase the rent as much as they want after the first year.

But a landlord cannot use a very high regular rental amount as a way to evict you. For example, if your rental agreement says that your discounted rent is $1,000 and that the regular rent is $10,000, your landlord cannot simply start charging you $10,000 as a way to get you to move out of your unit. If you believe your landlord is raising your rent to try to evict you, get legal help.

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August, 2016

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