Toronto rents are expected to rise next year as the province’s rent freeze, introduced at the height of the pandemic, comes to an end. But if landlords want to take advantage early in the new year, they’ll have to act quickly.
Introduced in October 2020, the freeze expires on December 31st, giving landlords the opportunity to up their rates for the first time in 12 months, but they’ll still need to give their tenants 90 days notice if they want to do so.
Property owners looking to acquire the extra rent as soon as possible in 2022 should be thinking about providing written notice now so they can run the clock on the 90 days. For example, notice of a rent increase given on November 1st can take effect in February.
Rent rules and regulations
According to the Landlord and Tenant Board of Ontario (LTB), landlords may only raise rent if they provide written notice at least 90 days in advance and if 12 months have passed since the first day of the tenancy, or the last rent increase.
The freeze may be over, but there’s still a ceiling on rates. The rent increase guideline for 2022 is set at 1.2% – this is the maximum landlords can charge without the approval of the LTB and it’s calculated by using the Ontario Consumer Price Index.
Using this metric, a Toronto landlord charging $1,000 each month can now up that to $1,012 per month. Hardly a huge increase, this slight adjustment reflects the current economic volatility as the market enters recovery mode.
So you can raise rent, but should you?
Raising rent is never an easy task for landlords, but it’s often necessary. Rental properties are, first and foremost, an investment and every investment has to stay ahead of the market if it wants to remain profitable.
Given that rents have stayed steady for a year and the increase for 2022 is so slight, a rent hike now shouldn’t unduly disadvantage your tenants.
Of course, if they’re struggling with their finances due to unemployment or other issues, it will require a sensitive touch. The important thing is to get the conversation started. There are always options, such as delaying an increase, but the best solution is the one that you negotiate together.
HighGate Properties has decades of experience working with both landlords and tenants in the GTHA to resolve any issues – whether those involve tenancy agreements, rents or contract negotiations. We’re a one-stop shop for property owners looking to outsource the day to day operations of their investment. We take care of everything so you can focus on what matters most to you. For more information about our property management and realty services, contact us today.