Rent increases are an important part of managing your residential real estate. Read about the rules and how to raise the rent in a respectful way.
Rent increases are an important part of managing your residential real estate. After all, the costs associated with having a rental property such as property taxes, insurance, maintenance and strata fees generally go up over time.
It is also important to consider that raising your rents (which is considered an income) can help with increasing your ability to mortgage qualify, and also the amount you may qualify for. This helps if you are interested in building your rental portfolio.
As well, tenants generally expect at least an occasional rent increase.
In order to raise rent and, at the same time, keep a good tenant, I strongly recommend sending a personalized note along with your Notice of Rent Increase. Here is one sample:
I want to take a moment and let you know how much I value you as resident of Capilano Spring Apartments, and I thank you for taking care of your home so well.
The reason for this note is to let you know that I have to give you a rent increase. I have had several property cost increases so unfortunately I have to pass some of this along. I hope you understand.
Enclosed you will find a Notice of Rent Increase. It is not in effect until . . .
Thank you for your cooperation, and if you have any questions please don’t hesitate to get in touch.
And now about the rules…
You can increase your tenant’s rent each year up to, but not greater than, the percentage set out by the Residential Tenancy Branch. The amount, if you’re interested, is defined as the 12-month average percent change in the all-items Consumer Price Index for BC.
The allowable rent increase for each calendar year is available on the Residential Tenancy Branch’s website. For 2021, the allowable rent increase is 1.4%.
Your Tenant’s current rent: $1,000.00
2021 allowable increase (1.4%): $14.00
The new rent would be $1,014.00
Please note, when calculating the increase, you may not round up. So a calculated $19.43 increase is $19.43, not $20. If you charge an amount higher than the allowable amount, the tenant does not have to pay the excess rent unless the tenant has been served with a dispute resolution officer’s order allowing the rent increase.
You must provide a Notice of Rent Increase to your tenant of the rent increase. This is an official form #RTB-7 issued by the Residential Tenancy Branch; no other version of this form is legal. This Notice must be served three full months before the rent increase takes effect. For example, Jane moved into an apartment on October 1, 2020 and pays rent of $1,000.00 per month. The landlord can serve her a Notice of Rent Increase by registered mail on June 20, 2021 to pay rent of $1014.00 beginning October 1, 2021. This rent increase was done in accordance with the Act.
If a tenant has paid an increase that was higher than the permitted amount, the tenant may deduct the amount from future rent.
To raise the rent above the permitted amount, the landlord must have either the tenant’s written agreement or a Residential Tenancy Branch order. The landlord has the burden of proving any claim for a rent increase of an amount that is greater than the prescribed amount.
The tenant will have an opportunity to appear at the hearing of the application, question the landlord’s evidence, and submit their own evidence.
Please note that there are also rules in serving notices to tenants. Here you will find the notice requirements: Serving Notices.
Read all the rent increase rules directly from the Residential Tenancy Branch here: RTB Rules On Rent Increases.
Rent increase during COVID-19
Rent increase notices served in December 2019 would have had an effective date of April 1, 2020; however, in March, there was a new ruling which delayed these increases and any future increases to the end of the Provincial State of Emergency. Through a change to the Residential Tenancy Regulations, this new effective date was changed from the end of State of Emergency to December 1, 2020.
Simply put, this means that any rent increase served and received between December 2019 and August 2020 will be effective December 1, 2020.
Landlords who have a rent increase effective December 1, 2020 will now use this as their rent increase anniversary date for the 2021 increase.