How to Increase Rent Beyond Ontario’s 2.5% Guideline

How to Increase Rent Beyond Ontario’s 2.5% Guideline

At LSK Property Management, we understand that sometimes landlords need to increase rent beyond the standard guideline set by the Ontario government. Here’s a detailed guide on how to do this legally through Above Guideline Increases (AGIs).

Understanding the 2024 Guideline

For 2024, Ontario‘s rent increase guideline is set at 2.5%. This is the maximum amount landlords can increase rent for most current tenants without approval from the Landlord and Tenant Board (LTB). For more details on the guideline, visit the Ontario Ministry of Municipal Affairs and Housing.

When Can You Apply for an AGI?

Landlords can apply for an Above Guideline Increase under specific circumstances, including:

1. Extraordinary increases in municipal taxes and charges
2. Eligible capital expenditures (e.g., significant repairs or improvements)
3. Increased operating costs related to security services

To learn more about what qualifies as an AGI, refer to the Residential Tenancies Act.

The AGI Process

1. File an Application: Submit an application to the LTB using the appropriate forms.
2. Provide Notice: Give tenants proper notice of the proposed increase.
3. Attend a Hearing: Present your case at an LTB hearing.
4. Receive a Decision: The LTB will decide whether to approve your AGI.

Important Considerations

• AGIs for capital expenditures and security services are capped at 3% above the guideline per year.
• There’s no limit on increases due to extraordinary municipal tax increases.
• Tenants don’t have to pay the higher amount unless it’s approved by an LTB order.

Best Practices for Landlords

1. Stay informed about the annual guideline by regularly checking government updates.
2. Keep detailed records of all expenses related to property management.
3. Communicate clearly with tenants about any planned increases and provide justifications.

Conclusion

While AGIs provide a way to recover significant expenses, they should be used judiciously. Always ensure you have strong justification and documentation before applying.For more guidance on rent increases and AGIs, visit our landlord services page or contact us directly.