The laws regarding rent increase vary from province to province, however, in Ontario the laws are different. The Ontario government has strict laws for rent control that restrict landlords to increase the rent by an exorbitant amount. Prior to 2017, rent control legislation in Ontario only applied to properties that were built prior to November 1, 1991. However, the laws have changed and the Fair Housing Act was introduced and applied rent control provisions to all the rental units in Ontario.
The right way for the landlord to increase the rent is to follow the guidelines provided by the Fair Housing Act. These guidelines are based on inflation and market conditions. Based on these guidelines, a landlord can only increase rent once a year to the maximum percentage provided by the government.
For the year 2020, the maximum percentage increase in rent is 2.2% of the base rent. For the year 2018 and 2019, the percentage was 1.8%.
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In order to increase the rent, the landlord has to give a written notice to the tenant at least 90 days in advance. For the rent increase in 2021, the Ontario government is considering putting a rent increase freeze because of the on-going COVID pandemic. Prior to giving notices for rent increase, the landlords should consult their local laws or a professional property management company.
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