Raising rents in Ontario with existing tenant vs vacant unit

13 Replies

My understanding of raising rents in Ontario is a percentage based system that caps how much you are able to raise rents. Does this only apply when you have an existing tenant for the purpose of preventing a landlord from forcing someone out of their property by raising rent? If a unit was to become vacant does this percentage still apply from the last rate it rented at or can you set the rent to whatever you want now that it is vacant? 

Hi Grame. You can rise rents only ones in 12 month. Today's cap, I believe, is 1.8%. If you want to go above that rate you should get an approval from landlord and tenan board (for example if your maintenance or property taxes go up). This all info is related to your existing tenant. If you have a vacant property you can market at any price you want. 

If the unit is vacant it doesn’t apply. I’ve heard rumours they’re trying to implement that in the future, which would be unbelievable but not shocking.

Moral of the story, always try to get any purchase vacant upon possession.

Graeme if you are thinking of investing in Ontario, please read the RTA twice. Once to learn to, and once to figure out how a tenant or the LTB could ruin you with every paragraph. 

It isn't a long document, but it controls your ability to stay in business.

https://www.canlii.org/en/on/onltb/

Along with learning the RTA and visiting the LTB web site spend a few hours reading up on past LTB cases to get a better picture of the potential nightmare of being a Landlord in Ontario.

You should also spend time at your local LTB hearing to get a better picture of how the board interprets the RTA and how landlords are treated.

The most important advice is never waste a single day hesitating to issue LTB notices but make sure you do it right. Any mistake a landlord makes will void your application. 

My personal advice would be to keep your money in Alberta if that is where you live.

@Matt Geerts  thanks for the input! I have a printed out RTA copy that I have reviewed a couple of times, but the phrasing in it  seems to not plainly outline exactly what is the "black and white" of some circumstances and leaves a lot open to interpretation. Frustrating. 

@Thomas S. thanks for the link and info! Will definitely be reviewing past cases as well as attend LTB hearings and see their interpretation of the law. I am currently in Alberta for work in the oil patch as an RN and will be returning to Ontario to be with my significant other in the Brantford area once the job dries up. Trying to use this opportunity as my unfair advantage to build a nest egg before returning home to Ontario. I definitely see the advantage of staying out here as landlords here do have some things in their favour, but it just isn't plausible for my relationship. I have some friends with rentals here who have told me of some of these advantages. The way I look at it, Canada is a tough place to invest regardless especially when compared to the US, but we can't let that stop us.

"leaves a lot open to interpretation. Frustrating."

The RTA is interpreted by adjudicators. It is generally done so as to favour tenants. The primary policy of the LTB is not to evict and aside from non payment of rent adjudicators generally will not evict.  

@Thomas S. I have been reading the LTB past cases and you are absolutely right. What is very troublesome to me is the length of time between submitting an application, arriving at a decision and the final date set out for payment or move out/eviction. Leaves a lot of time where the landlord is left hanging to dry if you will, without payment or reconciliation. This reiterates the importance of having reserve funds set aside and very thorough tenant screening is paramount. The adjudicators also seem to nitpick on whether or not a filing was properly completed by the landlord so I definitely understand why you mentioned really understanding what is required of the landlord as the process could be even further delayed. Ontario is definitely a pro-tenant province that is for sure. 

I just read about a landlord in one of my groups that had a case thrown out because after two phone calls to LTB confirmed she needed two copies of her forms, the adjudicator told her she needs three. Case dismissed. Start over with a new N4 form. Months wasted.

@Matt Geerts , that's horrifying. While I've always brought three copies, couldn't the landlord have given up her copy? If I was caught in that scenario, I imagine I would snap pictures of the forms with my phone to get me through the rest of the hearing, than turn over my copies to the tenant and the adjudicator.

@Jon Kepler she said the adjudicator wouldn't even let her speak. Just kept cutting her off and then dismissed. This was somewhere in the OLW facebook group. 

"couldn't the landlord have given up her copy?" 

Yes she could have. You will find that in cases where the tenants application is incorrect the adjudicators will regularly make exceptions...not so for landlords. Keep in mind the tennats have legal aid (hall trolls) representing them for free and they are in a "good old boy" relationship with the adjudicators. The reason for this is due to the boards prime objective to protect tenants. They look for and make no exceptions for landlord mistakes. This is in line with their goal to protect the tenant.

When the board was first established in the 90s it was called the Tenant Protection Board. Following complaints from landlords it was renamed the Landlord Tenant Board however none of the regulations were changed to aline with the new name.

As a word of advice to new landlords when a tenant does not pay rent on time it is imperative the landlord serve the tenant immediately (as in next day). Lost time in Ontario is lost money. It is strongly advised that the N4 not be used for this purpose. The N4 will only delay the process and be denied by a adjudicator. It is a red herring established by the system to protect tenants and legally allow them to stall rent payment. 

The application to use, which will always be successful, is the L9 (tenant pays landlord filing fee). If after multiple L9 filings a landlord then wishes to get rid of a tenant they may then try the N4 however the N4/L1 does absolve the tenant from paying any rent owed. Again speed is essential if a landlord does not wish to lose more than 2 - 3 months rent.

@Graeme Ford You've received the right advice here (@Thomas S.   @Jacob Perez @Matt Geerts   @Andrei Opal ). We got frustrated dealing with the landlord unfriendly laws in Ontario (lived in both Toronto and Calgary). The LTB is designed to frustrate the landlord and protect deadbeat tenants. 

This article talks in detail on how to evict a tenant plus the associated costs (and headaches involved): How to Evict a Tenant for Non-Payment of Rent (includes costs) . You will see that being a landlord can be quite a PITA in Ontario. 

There are other markets that are either more landlord friendly or offer better cash flow than Ontario (Alberta, Eastern Provinces - as @Roy N. pointed out). You can always choose to live in one place but invest in another, where the #s make more sense. 

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