Setting Rental Rate For Existing Tenant In Ontario

[ClintL]

As a new landlord/owner of a property I just bought in Ontario and when getting an existing tenant to enter into a new lease agreement with me, can I set the new rental rate up to a market rent level right away? Or do I have to limit any increase to just the % stated by Landlord & Tenant Board for the year?



The current rent this tenant is paying is about $100 to $150 below market and has been paying this same rate for the past four years. The previous landlord/owner never bothered to increase it.



I'm open to keeping this current tenant or getting a new one.

 

[BrianPulis]

Hi Clint if the tenant is existing the permissable increase in 3.1% this year. This is a rate that the Landlord and tenant board establishes for each year. You also need to give the tenant 90 days written notice. You will find the forms on the landlord and tenant board website.



www.pulisinvestments.com

 

[invst4profit]

Your situation is a perfect example of the short sighted vision of landlords in Ontario not wishing to increase

there tenants rent annually because they are "good" tenants or they fear they may move if faced with a rent

increase. Very poor business practice but all too common of Mom and Pop landlords not understand they are

operating a business.

Hopefully you purchased at a reduced market rate in light of the below market rent.



As already stated you are limited to the allowable increase of only 3.1% for 2012.

I would strongly advise you send notice of that increase immediately (before October 1) otherwise the tenant

may argue (unsuccessfully) that you are limited to the 2013 allowable increase. Also a rent increase Jan 1 of

each year makes for easier book keeping.All future increases in Ontario are capped at a maximum of 2.5%.



As far as replacing your tenant is concerned in Ontario that is not a option a Landlord has. Only a tenant has the right

to decide if they chose to vacate a property. A landlords right is restricted to evicting a tenant based on the justifiable

reasons included in the Ontario RTA. From experience I can confirm that eviction, other than for non payment of rent,

is nearly impossible in Ontario if a tenant does not wish to move. Aside from the case of a tenant physically destroying

a landlords property (major destruction) there is no point in wasting money trying to evict in Ontario. Landlords are

restricted to collecting rent and putting up with what ever behaviour a tenant wishes to inflict upon them.

 

[Rickson9]

[quote user=invst4profit]Landlords are restricted to collecting rent and putting up with what ever behaviour a tenant wishes to inflict upon them.




Awesome quote.

 

[Darr]

Hi Greg- Based on your previous response, you may be the right person to answer the following:



If rent increases are scheduled for May 1, 2013 and I send a rent increase notice prior to October 2012, I can use the 2012 allowable 3.1% or do I have to use the 2013 rent increase schedule?

 

[housingrental]

2013 afaik

 

[invst4profit]

As Adam has posted 2013 rate applies. I have double checked and the reality is that any increase taking place on or after Sept 1, is restricted to the next years increase. It is already too late, contrary to my previous post, to use this years 3.1% increase.



Unfortunately as future increases are restricted to a max of 2.5% we are going to have to be creative in convincing long term tenants to move on. Personally I never wanted to see any tenant stay longer than 3 years due to restrictive rent controls in Ontario. Long term tenants are bad for business.

 

[housingrental]

Have you thought about student housing?

I'm assuming Kingston would work for you?

[quote user=invst4profit]As Adam has posted 2013 rate applies. I have double checked and the reality is that any increase taking place on or after Sept 1, is restricted to the next years increase. It is already too late, contrary to my previous post, to use this years 3.1% increase.



Unfortunately as future increases are restricted to a max of 2.5% we are going to have to be creative in convincing long term tenants to move on. Personally I never wanted to see any tenant stay longer than 3 years due to restrictive rent controls in Ontario. Long term tenants are bad for business.