Rent Increase Above the Annual Guideline (3.1%)

Discussion in 'Real Estate General Discussions' started by Kevin86, Mar 6, 2012.

  1. Kevin86

    Kevin86 New Member

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    Hi,
    Just wondering what is the likelihood for getting approved by OLTB for a rent increase (more than the allowed 3.1% for 2012) for a building that just been finally turned over from the builder to the condo board. So the tenancy started after the "occupancy" and the building is finally complete and done. So is it likely to be approved for an increase above 3.1%.
    I understand that the rents can be increased due to the increase in municipal property taxes but can it be increased due to the changes in the way building looked at occupancy vs after the final completion.

    Thanking you in advance.
     
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  2. Alex7

    Alex7 New Member

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    I am not too sure but what I have heard, it is not easy to be approved for above the guide increase. But I guess it depends on the building and I think if that building has been approved for a higher increase, then each of the units will be approved. I could be wrong.
     
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  3. Kevin86

    Kevin86 New Member

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    Thanks, Alex.

    Does anyone else have more insight in the rent increase? Are you aware of any buildings that have been approved for rent increase above 3.1?
     
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  4. AKS

    AKS Senior Member

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    Some posters have mentioned that the rent increase doesn't affect buildings built after 1997. So you can increase as much as you want.
     
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  5. InsiderCondos

    InsiderCondos Banned

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    You are allowed to increase rent by whatever amount you want if the condo was built after Nov 1990. I have done that many times for my clients. You don't need to go to OLTB.
     
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  6. ISYM

    ISYM New Member

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    Kevin, your condo should be exempt from the rent guidelines - so far. You can contact the Landlord and Tenant Board at 1-888-332-3234 to get their answer.
     
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  7. James

    James Senior Member

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    Reference the following excerpt from the Residential Tenancies Act section 6. (2):

    Rules relating to rent
    (2) Sections 104, 111, 112, 120, 121, 122, 126 to 133, 165 and 167 do not apply with respect to a rental unit if,

    (a) it was not occupied for any purpose before June 17, 1998;

    (b) it is a rental unit no part of which has been previously rented since July 29, 1975; or

    (c) no part of the building, mobile home park or land lease community was occupied for residential purposes before November 1, 1991. 2006, c. 17, s. 6 (2).


    Link: http://www.ontariotenants.ca/law/act01.phtml

    The following paper has some more information on this as well. See page 6-7: www.cleo.on.ca/english/pub/onpub/PDF/landlordTenant/rentincs.pdf
     
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  8. interested

    interested Senior Member

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    ^^^
    You can raise as much as you want. That said, the market will dictate proper rent. If you have a good tenant who is no trouble, pays the rent, tread carefully. A good tenant is worth more than the aggravation of a move in/move out. If you are significantly below market rent, then you should be able to work your way up to market.
     
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  9. wang888

    wang888 Active Member

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    what determines rent increase?
     
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  10. dt_toronto_geek

    dt_toronto_geek Superstar

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    1) The annual guideline in Ontario, for example 2012 was set at 3.1%. Btw the next four years will only see a 2.5% capped increase each year, plus any AGI's that a landlord may apply for through the Landlord and Tenant Board

    2) Landlords can apply to the Landlord and Tenant Board for an increase above the guideline (an AGI), if their costs for the municipal taxes or utilities have increased by more than the guideline plus 50 per cent. Landlords can also apply for an increase above the guideline for operating costs related to security services and for eligible capital expenditures such as balcony or garage restorations, new windows, roof replacements and things like that which I think is totally unfair.

    We fought a 1% AGI increase in 2010 and we just found out in early June that we lost. We hired a lawyer through the Tenant Association to write a legal brief for us then the Association represented the residents at the Rental Tribunal in early January without legal representation, but after the Hearing we realize that it wouldn't have made a difference. Two months ago we started hearing on our discussion board that we are getting nailed again this year with another 2.9% AGI this year as it is being hand written in on people's leases now. We have not received anything formal from the Landlord Tenant Board yet explaining what the AGI is for, nor the landlord. They did restore the underground parking garage in 2010 & 2011 so we think that's what we're getting hammered with.
     
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  11. Regular

    Regular New Member

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    Problem with rent hikes, tenants get pissed off for the hike and then they leave. I had this problem occurred before.
     
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  12. James

    James Senior Member

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    While I don't disagree that this can happen, as the property owner, you have to consider your rising costs into the equation. Condo fees increase year after year. Property taxes increase year after year. You have to decide whether you're willing to absorb these costs.
     
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  13. asiancolossus

    asiancolossus Active Member

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    I currently have this problem. My current rental rate for my tenant is about 100 less than market rent and my fees have gone up 100% in two years. I have a great tenant and I also don't want the hassle of looking for someone new. But it's hard knowing the rates are going so high and so are my expenses. It's a tough situation for sure.
     
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  14. James

    James Senior Member

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    It definitely is. I know of some other landlords/investors/property managers who systematically increase their rent by the rent increase guideline set out by the Ontario government. Conversely, I think there is a larger majority who don't increase rent annually and rising costs are something most tenants simply aren't aware of.
     
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  15. asiancolossus

    asiancolossus Active Member

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    My tenant did give me the sob story that things are tough, utilities are going up and that comparable properties are hard to compare because of blah blah blah. I guess its a game, tenants are trying to lower the rent as much as possible and the landlord is trying to raise the rent as much as possible. I was honest with my tenant in terms of how much I am paying, mortgage, property tax and condo fees, and that I'm barely breaking even and its not worth it to even keep the property if I have negative cash flow. If he doesn't like it, I actually encouraged him to go out and see for himself how much rents go for nowadays. This sort of stuff I hate, I feel like I'm bartering at a flea market trying to get the best price. But if he moves out he moves out, it comes to a point where I cant just keep swallowing the increased expenses. It is a business at the end of the day.
     
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