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The guideline is usually announced in August for the following year. You can find more information about this on our website at http://www.landlordselfhelp.com and at http://news.ontario.ca/mah/en/2013/06/2014-rent-increase-guideline.html

When you purchase a property with tenants in possession you assume whatever agreement they have in place with the previous owner. Therefore, when you take over as the new owner you are not allowed to increase the rent unless it’s by the allowable guideline and if the tenants have not had an increase in the past twelve months. To increase the rent you must give the tenants a 90 day notice on a prescribed form which is a Form N1.

If you don’t take an increase each year, you will not be able to recover it. In this case you can only increase the rent by this year’s guideline amount. You can find a link to the current amount on our website at http://www.landlordselfhelp.com/intro.htm.

A landlord may increase the rent above the guideline amount due to capital expenditure. The landlord must file an application to the Board for approval to increase the rent above the guideline amount. An above guideline increase cannot exceed the guideline amount plus 3%.

The article is referring to Section 6 of the Residential Tenancies Act which allows for three different situations where the Act recognizes owners of “New” properties, and gives them an incentive to rent their new properties by providing an exemption from the rent control parts of the Act. Nearly all landlords must abide by the annual rent increase guideline when increasing the rent (at a maximum) once a year. To go above guideline, landlords usually have to make an application to the Landlord and Tenant Board for approval because of increased operating costs or because they did capital expenditure work. New properties are treated differently. Usually only two of the situations described in Section 6 are relevant: 1) If the property was not occupied for any purpose before June 17, 1998 (this describes most new homes, buildings and condos); 2) If no part of the building was occupied for residential purposes before November 1, 1991 (this usually means that the building was built for commercial use and then was converted to residential use—like many loft style apartments—sometime after this date) In either case, the tenants of these buildings could be given an N2- Notice of Rent Increase that is not limited to the annual guideline.

You are still entitled to the rent increase in this case because this would not be considered a new tenancy. The tenancy continued and remains the same despite the fact that one of the tenants has moved out and she signed a new lease.

Landlords can apply to the Landlord and Tenant Board for an increase above the guideline based on capital expenditures. However, the capital expenditures must be completed and paid for within an 18-month period that ends 90 days before the date of the first rent increase requested in the application. You can read more about this issue at the following link to the Board’s information brochure on applications for rent increase about the guideline, http:www.ltb.gov.on.ca/en/Key_Information/157435.html