2007 RENT INCREASE GUIDELINE

Each year the Ontario government announces the province’s rent increase guideline for the following year. The rent increase guideline is the maximum amount by which a landlord can increase the rent for a current tenant without approval from the Landlord and Tenant Board.

The 2007 guideline is 2.6 per cent.

The new rent increase guideline applies to a rent increase that begins any time between January 1, 2007, and December 31, 2007, and applies to most residential units in Ontario.

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 guideline was designed to take into account increases in landlords’ building maintenance and operating costs in order to protect tenant health and safety.

The Guideline Formula

The rent increase guideline is based on a formula that takes into account inflation in the costs of operating a rental building.

The guideline is calculated by averaging over three years the changes in the operating costs of a building. A total of eight operating costs are used in the calculation, including municipal property taxes, heat and maintenance.

Sample Rent Increase Guideline

The monthly rent for an apartment is $800 beginning May 1, 2006. With proper written 90 days notice to the tenant, the landlord could lawfully increase the rent 12 months later on May 1, 2007.

The guideline for 2007 is 2.6%. The 2007 rental increase is 2.6% of $800 = $20.80. Therefore, the new rent on May 1, 2007, could be up to $820.80 ($800 + $20.80).

Above Guideline Increases

Landlords may apply to the Landlord and Tenant Board for an increase above the guideline, if their costs for municipal taxes or utilities have increased by more than the guideline + 50%.

Landlords may also apply for an increase above the guideline for operating costs related to security services and for eligible capital expenditures.

Sample Above Guideline Increase

The 2007 rent increase guideline is 2.6%. 50% of this guideline is 1.3%. (2.6% + 1.3% = 3.9%).

In 2006, a landlord’s utility costs were $10,000.

In 2007, a landlord’s utility costs increased by 15% to $11,500.

The landlord is eligible to apply for an above guideline increase because the landlord’s utility costs increased by more than 3.9%.

Previous Guidelines

Year	Guideline	Year	Guideline	Year	Guideline
2006	2.1%	1998	3.0%	1990	4.6%
2005	1.5%	1997	2.8%	1989	4.6%
2004	2.9%	1996	2.8%	1988	4.7%
2003	2.9%	1995	2.9%	1987	5.2%
2002	3.9%	1994	3.2%
2001	2.9%	1993	4.9%
2000	2.6%	1992	6.0%
1999	3.0%	1991	5.4%

Will the 2007 guideline change now that the Residential Tenancies Act, 2006 has been proclaimed?

No, the rent increase guideline for 2007 will remain at 2.6% even though the Residential Tenancies Act has been proclaimed.

The 2008 guideline will be based on the Consumer Price Index.

Additional Information

The Landlord and Tenant Board provides information to the public through a network of regional offices across Ontario.

The Board can be reached 24 hours a day by calling 416-645-8080 or toll-free 1-888-332-3234. Information is also available on the Board website at www.LTB.gov.on.ca.

For a copy of the Residential Tenancies Act, 2006 please call Publications Ontario at 416-326-5300 or toll-free 1-800-668-9938, or online at www.publications.gov.on.ca. The text of the Residential Tenancies Act, 2006 is located on the e-Laws website at www.e-laws.gov.on.ca.