Toronto couple shocked when rent increases 25 per cent

There was a rent freeze in Ontario last year due to the pandemic, but it expired on Jan. 1 and now some landlords are raising rent by as much as 25 per cent.

“I was shocked. I thought it was illegal and I started texting my friends and family to ask ‘can they do this?’" said Jake Myhal of Toronto.

Myhal and Holly MacLeod moved into a Toronto condominium unit in May 2021 and signed a one-year lease.

The allowable rent control guideline increase for this year is 1.2 per cent, but that does not apply to newer buildings constructed after November 2018.

The couple’s unit is in a newer building and they were shocked when they were told their rent will go from $2,000 to $2,500 per month, a 25 per cent increase.

"I think we were expecting a five per cent or 10 per cent increase, but a 25 per cent increase is quite jarring," said MacLeod.

To encourage more rental housing and developments in the province, the Ontario government changed rent control guidelines so that new buildings would not have to adhere to rent controls.

The owners of these newer rental units couldn't raise rent last year due to the pandemic, but now they can.

"Rents have jumped dramatically and this has led to 25 per cent increases in a lot of places," said Mark Weisleder, a real estate expert and lawyer with RealEstateLawyers.ca LLP.

Weisleder said the new rules were to encourage development and, according to Ontario’s Ministry of Municipal Affairs and Housing, new buildings and new basement apartments occupied for the first time for residential purposes after November 15, 2018 are exempt from rent control.

Weisleder said anyone moving into a new building should ask when it was built and may want to add a clause to their lease.

“If you do rent in a brand new building, have them put a clause in that the most the landlord can raise your rent is two or three per cent per year to protect yourself from these large increases,” Weisleder said.

Myhal and MacLeod said they will move out of their unit rather than pay a 25 per cent increase.

“If we would have known they could raise the rent this much, we would have definitely considered an older building," Myhal said.

Even in newer buildings, Weisleder explained that the new rent control rules cannot be abused and should still be in line with current market values.

In rent-controlled buildings rents can only go up more than 1.2 per cent if the landlord gets approval from the Landlord and Tenant Board.