2006 Rent Increase Guideline Released

The Ministry of Municipal Affairs and Housing
today released the province's rent increase guideline for 2006. The 2006
guideline will be 2.1 per cent.
The annual guideline is the maximum amount that most landlords can
increase a tenant's rent without making an application to the Ontario Rental
Housing Tribunal. Most tenants in Ontario receive an annual rent increase that
is at or below the rent increase guideline. The 2006 guideline is effective
from January 1, 2006, to December 31, 2006.
The 2006 guideline reflects increases in landlord operating costs. The
table showing the individual operating cost increases in the 2006 Rent
Increase Guideline will be published in an upcoming edition of the Ontario
Gazette.

2006 RENT INCREASE GUIDELINE

The 2006 guideline is 2.1 per cent. This guideline is in effect from
January 1, 2006, to December 31, 2006.

Annual Rent Increase Guideline

The annual guideline is the maximum amount that most landlords can
increase a tenant's rent without making an application to the Ontario Rental
Housing Tribunal.
The guideline applies to most private residential rental accommodation
covered by the Tenant Protection Act, 1997. The guideline does not apply to
residential dwellings first occupied on or after November 1, 1991, nor does it
apply to social housing units and nursing homes.
In most cases, the rent for a unit can be increased if at least 12 months
have passed since a tenant first moved in or since his or her last rent
increase. The tenant must be given proper written notice of the rental
increase at least 90 days before the rent increase takes effect.
The 2006 guideline of 2.1 per cent is based on eight common costs
involved in the operation of rental housing such as maintenance, hydro,
heating costs and taxes. Each cost category is weighted according to its
proportion of the overall costs of running a multi-residential property. The
costs in these categories are averaged over a three-year period.
Landlords can apply to the Ontario Rental Housing Tribunal for an
increase above the guideline if their annual costs for heat, hydro or
municipal taxes have increased more than the guideline allowed for, or if
they have done major capital work.

Sample Rent Increase Guideline

The monthly rent for an apartment is $800 beginning May 1, 2005. With
proper written 90 days notice to the tenant, the landlord could lawfully
increase the rent 12 months later on May 1, 2006.
The guideline for 2006 is 2.1 per cent. The 2006 rental increase is 2.1
per cent of $800 = $16.80
Therefore, the new rent on May 1, 2006, could be up to $816.80
($800 + $16.80)

Tenant Protection Act

On June 17, 2004, the government amended the Tenant Protection Act, 1997
to remove the 2 per cent base from the guideline calculation. As a result,
the rent increase guideline reflects only increases in landlords' operating
costs. This was a time out measure while government is consulting with
stakeholders and developing revised legislation.