As the year comes to an end, so does the rent freeze, which has prevented landlords from increasing their rents all through 2021. In today’s blog post, we will discuss Ontario’s 2022 rent increase and the change this introduces for both landlords and tenants.

What is a rent increase?

As the name suggests, a rent increase is the highest charge a landlord can increase a tenant’s rent, without applying to the Landlord and Tenant Board. If landlords wish to raise their rent above the guideline, perhaps due to significant modifications, they must seek approval from the Landlord and Tenant Board.

How is the increase calculated?

The Consumer Price Index (“CPI”), amongst other factors, is an important consideration of what rent increase would be viewed as appropriate. The CPI estimates how much consumers pay for goods and services on average and provides an objective measure of what quantum of rent increase would be in-line with inflation. 

What is the current position? 

Due to the financial difficulty faced by tenants as a result of the pandemic, the Government of Ontario passed legislation to keep the rent increase at zero percent from January 1 to December 31, 2021. Thus, landlords were not allowed to increase their rent this year until the expiration of the rent freeze.

What is the future change and requirements?

From January 2022, landlords in Ontario can increase their rent by 1.2%. A 90 days’ written notice must be given to tenants before such an increase occurs. The increased guideline applies to most private rental units under the Residential Tenancies Act. However, it does not apply to commercial properties, community housing units, long-term care homes or rental units occupied for the first time after November 15, 2018.

More information can be found on the Government of Ontario’s website

If you have any questions relating to this matter or other corporate commercial legal services, you can book a free consultation with Northview Law on this link, or contact us at 416-639-7639. We look forward to hearing from you soon.