Your Property Might Be Exempt from the 2014 Rent Increase Guideline!

The news from the Ontario Ministry of Municipal Affair and Housing shook the world of landlords when the news of the Rent Increase Guideline was announced.

According to the Ministry landlords can only raise the rent 0.8% in 2014.

We wrote about this earlier and about how many landlords were dissatisfied with such a low legal increase.

Even articles in the Toronto Sun had landlords saying such a low rent increase would not cover their costs.

After all property taxes aren’t capped at less than 1 %. 

Neither are the increased costs for electricians, plumbers and other professionals who landlords reply on (and pay) to maintain our properties in good, safe condition.

In the Toronto Sun story a Mississauga landlord explained that such low increases drive good landlords out of the industry because good landlords want to keep their properties in good shape and need rent to help pay to do so.

Meanwhile, landlords who don’t care about keeping their properties safe and maintained don’t care about such a low rent increase because they won’t spend on their rentals.

Some Ottawa landlords wrote how they were going to leave the residential rental sector for the commercial sector where there are fewer government controls.

Other Ontario landlords have expressed an interest in leaving Ontario and investing in other provinces such as British Columbia where the guideline is the inflation rate plus 2% (to protect landlords and make sure they can cover costs) or the province of Alberta (where there is no rent control for landlords).

I Heard Some New Buildings Can Raise the Rent As Much As The Landlord Wants

There is good news for landlords who own newer rental properties.

According to the Ontario Landlords Association some properties are exempt from the Rent Increase Guideline.

For example, while the Residential Tenancies Act restricts how much landlords can raise the rent these but rent control provisions only apply to buildings occupied before November 1st, 1991.

Why Are New Buildings Allowed To Raise The Rent?

Linda Jeffrey is the Minister of Municipal Affairs and Housing. The Minister provided us with the following information about why new buildings are allowed to raise the rent above the guideline while older properties cannot. 

She said:

– The post 1991 rent exemption was first introduced to be an incentive to private landlords to create new rental properties

– This exemption has been maintain for the same purpose

– The incentive helps ensure Ontario has new rental properties coming into existence

– The creation of new rental stock creates employment in the construction industry and helps the Ontario economy.

Was Your Condo, Townhouse, House or Apartment for Rent Built After Nov 1, 1991?

If it was you are probably exempt from rent control and can raise the rent as you see fit.

Make sure you check out the Landlord and Tenant Board website to find out more information.

To Discuss This And Other Landlord Issues Take A Look At the Toronto Landlord Forum