The Ministry of Municipal Affairs and Housing recently annoucned its annual rent increase cap for 2025, it’s kept at 2.5% same as 2024. What is Rent Control, is your property governed under the Rent Control ?
Rent control in Ontario is governed by specific regulations that determine how much landlords can increase rent and when these increases can occur. These rules are designed to protect tenants from unreasonable rent hikes while ensuring landlords can cover their costs.
Rent Control Regulations: Units first occupied for residential purposes before November 15, 2018, fall under Ontario’s rent control regulations. This means that rent increases for these units are capped at a percentage based on the previous year’s Consumer Price Index. For the year 2025, the allowable increase is set at 2.5%.
Notice of Rent Increase: Landlords must provide tenants with a Notice of Rent Increase at least 90 days before the increase takes effect. This ensures tenants have adequate time to adjust their budgets or make necessary arrangements.
Frequency of Increases: Rent can only be increased once every 12 months for a unit under rent control. This provides stability for tenants, knowing their rent will not continuously escalate throughout the year.
Exemptions to Rent Control: Units that were first occupied for residential purposes after November 15, 2018, are not subject to the rent control cap. This allows landlords to set new rental rates for vacant units. While this can potentially undermine the effectiveness of rent control by allowing significant increases for new tenants, it also encourages the development of new rental properties.
Above Guideline Increases (AGIs): Landlords can apply for AGIs if they have made substantial improvements to the property or if they are facing significant tax increases. These applications must be approved by the Landlord and Tenant Board (LTB) and are an exception to the standard rent increase cap. Tenants who suspect they have been subjected to an illegal rent increase have the right to file a T1 Application with the LTB within 12 months of the charge. This process provides a formal avenue for disputes to be resolved and ensures tenants are not unfairly overcharged. Be informed of Rent Control regulations For tenants, understanding these regulations can help protect against unexpected rent increases and provide a mechanism to challenge increases that may not comply with the law. For landlords, staying informed about rent control rules is essential for setting rent increases legally and fairly, avoiding potential disputes with tenants.
