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How To Protect Yourself From A Rent Increase

May 2, 2013
3 mins
A young woman sits on the floor working on her laptop while her big dog cuddles her legs

Renters in Toronto have suffered from rent rate vertigo as of late, as a legal loophole has allowed landlords to increase rents as much as 2.5 per cent. Ontario tenants are asking the Residential Tenancy Act to address the situation after many are being forced to pay higher rents than expected.  If you’re a tenant in Ontario, you already know landlords can raise your rent each year. The Ontario Landlord and Tenant board determines the amount to raise rent based on the Consumer Price Index as compiled by Statistics Canada.

Condo Renters Are Most Vulnerable

It is with the recent surge in condominium rentals that the loophole, which exempts buildings from rent increase guidelines, has been revealed. In the Residential Tenancy Act any building built after November 1st 1991 is not subject to the same laws when it comes to rent. Therefore, landlords can raise the rent  more than the determined amount if they are, for example,  faced with rising maintenance and utility costs. This has left many condo renters, in particular, vulnerable to unexpected hikes in their monthly rent as many of these buildings were built in the last 20 years.

How Landlords Raise Rent

Landlords are allowed to raise rent every 12 months. To do this he or she must give you 90 days notice in writing that rent will be increasing. The notice should list how much rent is going up by, the percentage and what will now be due at the first of the month (or whenever you pay rent), and the first day the higher rent will be in effect. If you disagree with the rise in rent you still have to pay your rent but can then take legal action to fight the landlord. If you win the extra will be returned to you with interest.

Protect Yourself With a Lease

If you’re looking to rent a property that was built before November 1, 1991, it would be helpful for you to negotiate rent increases with your soon-to-be landlord. Ask them how much they have raised rents in the past and if they would agree to putting in the lease a guaranteed upper limit of how much they will raise rents while you are their tenant. Before you sign the lease, you are in the position of power and have the right to ask for anything that makes your move there more comfortable.

How To Negotiate Lower Rent

By knocking even $50 dollars a month off your rent from the day you move in, you will save yourself hundreds of dollars over the time you live there. Bank that extra money to be used towards any unexpected rent hikes. This creates an emergency/insurance fund and gives you confident to handle a rent hike when it comes.

Calculate Your Ownership Costs

If you're considering a rental, it's a good idea to compare what the associated costs would be to own a similar property. It may work out that your mortgage, taxes and general maintenance and utilities are affordable enough for you to own real estate rather than rent. Be sure to include often overlooked home buying costs, such as property transfer tax, condo fees and home inspections.

As a renter, especially in a big city, it can be hard to navigate the rules and regulations when it comes to becoming a tenant, I highly recommend consulting the Landlord and Tenancy board in your province to know your right and limitations as a tenant.  Knowing you rights as a tenant and protecting yourself from unexpected costs like higher rents,  will make your stay as a renter more enjoyable and stress-free.

Rubina Ahmed-Haq

Rubina Ahmed-Haq is a financial journalist and personal finance expert with more than 15 years of experience. Her career spans three continents with appearances on TV, radio, print and online. She is the Finance Editor for HOMES Publishing. You can also read her columns in CondoLife and Active Life. Rubina runs the website She has also contributed on personal finance matters at The Toronto Star, The Globe and Mail, National Post, CTV Newschannel, Mississauga Life Magazine,, OurKidsMedia, CAA Magazine, South Asian Focus TV, ANOKHI Magazine, Bridal Fantasy Magazine, Canadian Running Magazine, FRESH JUICE magazine and NEWSTALK 1010.

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