Rent: How Is a Rent Hike Calculated in 2022?
Do you live in a rental property, and have you received a rent hike notice? Are you wondering how your landlord decided on the size of the hike? Not sure if you have the right to refuse the hike?
In Quebec, rent hikes are governed by the Civil Code. Each year, the Tribunal administratif du logement – the former Régie du logement – sets out its guidelines which must be respected. Here’s what you need to know about rent hikes in 2022.
What Is the Maximum Percentage for Hikes Allowed in 2022?
As the Éducaloi site states, “Contrary to popular belief, there is no fixed rate for rent hikes.”
The percentage of the rent hike depends on several factors, such as the cost of energy (electricity and gas), municipal or school taxes, insurance, maintenance, etc. The cost of major renovations to the building may also be included in the calculation if your unit receives them.
What Are the Guidelines that Need to Be Followed?
At the beginning of each year, the Tribunal administratif du logement announces the applicable percentages for calculating rent hikes.
In a chart, the Tribunal lists the components of the rent and indicates the applicable percentage for each one. For instance, in 2022, the portion of the rent attributable to electricity can be increased by 0.9%. If your unit uses gas, the portion that represents the cost of gas can be increased by 17.5%.
On its website, the Tribunal is careful to point out that the percentages shown “are not average estimates of hikes”.
Moreover, each situation is unique, especially if any renovations have been done.
But Who Decides?
In practice, landlords and tenants can agree on an acceptable percentage themselves.
The Tribunal administratif du logement has a Rent Hike Calculator that landlords and tenants can use to determine a reasonable percentage.
As the Éducaloi site points out, “even if it is not mandatory, this form can, by illustrating the calculations and relevant data, facilitate negotiations between a landlord and a tenant.
Can a Tenant Refuse a Hike?
Yes. If you are a tenant, you can always refuse a requested hike.
When you refuse a rent hike, the landlord can simply agree to keep the rent at its current level. They can also try to negotiate with you.
If no agreement can be reached, the landlord can ask the Tribunal to set the rent. The landlord has one month after your notice of refusal to apply to the Tribunal.
An Example of a Calculation
Even if you understand what goes into calculating rent hikes, it can still be quite abstract. To help you understand, the Tribunal website provides a concrete example, in the form of a ‘fictitious calculation scenario.’
If you want to see how you may be affected by a rent hike, check out the Rent Hike Calculator.
And if you’re looking to move from renting to homeownership, team up with a real estate broker!