|
Higher property taxes could mean higher rents
|
Municipalities across Ontario have announced higher taxes and charges for 2024. Some landlords might want to increase rents because of this. But there are special rules they have to follow if a rental unit is covered by the rent guideline. |
|
When landlords can apply
|
Landlords must apply to the Landlord and Tenant Board (LTB) to increase rent by more than the guideline amount. One reason they can apply is because of higher municipal taxes or charges. The LTB can order a higher rent increase, called an above guideline increase (AGI). |
|
But the LTB will only agree to an above guideline increase if the tax or charge is "extraordinary". In 2024, this means the tax or charge increases by more than 3.75%.
|
|
What taxes and charges count
|
|
Landlords can ask for an above guideline increase because of taxes and charges that:
|
- come from a municipality or what's called an unorganized area in Northern Ontario, and
- apply to the rental property.
|
|
This includes:
|
- property tax
- education tax
- rental housing licensing fees
- garbage and waste fees
|
|
|
|
Steps the landlord must take
|
|
To get an above guideline increase, the landlord must:
|
|
|
|
The landlord must send both the notice of rent increase and the Form L5 at least 90 days before the date they want the rent increase to start.
|
|
With the Form L5, they must include evidence that shows:
|
- How much the municipal taxes and charges were for the last complete calendar year, called the base year.
- How much the municipal taxes and charges were for the 12 months before the base year, called the reference year.
- They paid all the municipal taxes and costs in the base and reference years.
- Any financial assistance they got that lowered their taxes or charges in the base and reference years.
|
|
Getting a hearing date and copy of the application
|
|
The LTB checks the landlord's application to make sure it's complete. The LTB then sets the hearing date.
|
|
Tax applications usually have written hearings. This means that the LTB makes its decision based on documents from the landlord and tenants.
|
|
The LTB gives the notice of written hearing to the landlord. Then the landlord must give a copy of the application and the notice to all tenants who are affected. They must do this within 20 days after the date the LTB issued the notice of written hearing. The issue date is shown on the notice.
|
|
What tenants can do
|
|
Tenants should read all documents carefully as soon as they get them. If the landlord did not send copies of their supporting evidence, tenants should write to their landlord asking for a copy right away. If the landlord refuses, tenants should talk to the LTB.
|
|
It can be hard to challenge the landlord's math in these applications. But tenants can check that:
|
- all the municipal taxes and charges qualify for an above guideline increase
- they got proper notice of the rent increase
|
|
Landlords can get above guideline increases only from tenants who had rental agreements more than 90 days before the rent increase begins. So tenants who have moved in recently should also check this.
|
|
Serious repair problems
|
|
Tenants can fight an above guideline increase if their rental unit or building has serious repair problems.
|
There must be a "serious breach" of the landlord's responsibilities to meet maintenance, health, and safety standards. If there is, the LTB can refuse or delay the increase. |
|
|
|
Preparing documents
|
|
Tenants must send in their arguments against the increase in writing. These are called written submissions.
|
|
Tenants should include as much evidence as they can with their written submissions. For example, for serious repair issues, they should include photographs of the problems and letters or emails with their landlord about the problems.
|
The written submissions are a tenant's only chance to argue against the increase. So it's a good idea to get legal help before sending them in. |
|
The notice of hearing gives the deadline for sending in the written submissions.
|
|
When tenants must pay the increase
|
|
Tenants can choose to pay just the guideline increase until the LTB decides about the above guideline increase.
|
|
The LTB's decision gives the date that the landlord can increase the rent. This could be a date in the past. So the LTB will give a deadline for tenants to pay any unpaid rent if they chose to pay only the guideline increase.
|
|
How much the increase can be
|
|
The LTB uses a formula to decide how much the above guideline increase will be. This formula is very complicated.
|
|
There's no maximum amount that rent can go up because of a municipal tax increase. But in most cases, the increases are below 1%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward this email
|
|
|
