Will landlords follow the rules or bend them?
Canadians already struggling with inflation and high rents would be relieved at the 2022 rental guidelines in Ontario capping the rent increase to no more than 1.2%.
Based on the Ontario Consumer Price Index (CPI), the guideline on rent increases for 2022 in Ontario stands at 1.2% The CPI is a measure of inflation calculated monthly by Statistics Canada using data that reflects economic conditions over the past year.
The guideline applies to most residential rental accommodations covered by the Residential Tenancies Act. It does not apply to rental units in buildings occupied for the first time after November 15, 2018, social housing units, long-term care homes or commercial property.
The rent increase guideline is the maximum most landlords can raise a tenant’s rent without the approval of the Landlord and Tenant Board (LTB). It is applicable to most rent increases between January 1 and December 31, 2022.
Ontario had frozen rent for the vast majority of tenants in 2021. To support renters, the 2021 rent increase guideline was set at 0 per cent.
Rent increases are not automatic or mandatory. Landlords may only raise rent if they gave tenants at least 90 days’ written notice. In addition, at least 12 months must have passed since the first day of the tenancy or the last rent increase. If a tenant believes they have received an improper rent increase, they may dispute it.
Will rents keep rising in Canada?
The latest guideline will definitely slow down the rate of rent increase, but it is unlikely to translate to low rents for newly listed properties.
The average rent for a 1-bedroom apartment in Toronto, is currently around $1,825. Rents in highly desired neighborhoods are wildly inconsistent. Bidding wars are also applying to some rental properties with some two-bedroom condos climbing to as much as $2,500.((Ontario))
With over 400,000 new immigrants expected to pour into Canada in 2022, the rental market is not likely to cool down anytime soon.