Most tenants expect that rent will be increased year to year, when they renew their lease agreements. However, Hamilton landlords cannot raise the rent arbitrarily or excessively. There are several legal issues that need to be considered, and today we’re talking about how to increase your rent without gaining the approval of the Landlord and Tenant Board.
Deciding How Much to Increase Rent
It’s important not to raise the rent too much. If you have a good tenant in place who is paying rent on time and taking good care of your property, a dramatic rental increase might cause them to begin looking for another place to live that’s more affordable.
The legal rent increase guideline is 2.2 percent for the year 2020. When you decide to increase your rent between January and December of 2020, you must stay within that limit unless you’re willing to defend a higher increase in front of the Landlord and Tenant Board. In 2019, the limit is 1.8 percent, so any rental increases before the end of the year will need to meet that maximum.
The limit on how much rent can be increased only applies to those properties covered by the Rental Tenancies Act. That doesn’t include commercial properties or even vacant units. So, if you don’t have a tenant in place and you’re looking for a new resident, you can establish any rental amount you want, even if it’s more than 2.2 percent of the rent you were previously charging.
When to Increase Your Rent
The law allows you to raise the rent 12 months after your last rental increase. You cannot raise your rent every three months, for example. You have to wait for the end of that year before you can raise it on tenants you have in place. When a new tenant first moves in, you can also raise the rent to whatever level you believe is competitive and meets the market demands.
Providing Written Notice of Rental Increases
Landlords are required to provide notice to their tenants before increasing the rent. A period of 90 days is the legal standard, and your lease agreement should reflect that. So, if you know that you’re going to raise the rent on the tenants currently living in your property on the first day of February in 2020, you’ll want to send that written notice to your residents by the third of November in 2019.
Accurately pricing your rental property has a distinct impact on how quickly you rent it, whether you retain good tenants, and how much money you earn. It’s an important consideration, whether you’re renting out one property or dozens of units in a building. Make sure you’re increasing your rent within the legal requirements, and always remember that tenant retention is often more profitable than a few extra dollars every month.