The Housing Administrative Tribunal (TAL) recently released its 2023 rent-setting grid. TAL suggests an increase of 2.3% for unheated dwellings and 2.8% for dwellings with internal heating and electricity.
The TAL Calculation Table, which can be used online or downloaded as a PDF file, was designed as a tool that can help tenants and landlords negotiate rent increases rather than setting a maximum rent increase. It takes into account the normal costs associated with the operation of the rental property, such as maintenance costs, management costs and capital costs.
According to the Quebec Housing Committees and Associations of Renters Regrouping (RCLALQ), this is a useful spreadsheet, especially for a landlord: a tenant rarely has all the data that would justify an increase, such as the cost of repairs.
In addition, owners are not required to comply with increases proposed by TAL. “On the contrary, every year the actual increase in rent very often exceeds the recommended one,” explains Cédric Dussaud, spokesman for RCLALQ.
For example, the latest annual RCLALQ survey on rent increases, published in June 2022, found that the cost of rental housing has increased by an average of 9% in one year in Quebec.
Significant rent increase expected
The increase proposed this year by TAL is the highest in 10 years. Large inflation of 6.7% per annum in Quebec is largely responsible for this.
The average increase scale proposed by TAL for 2023 is as follows:
• Unheated housing: +2.3% (+1.28% in 2022)
• Electrically heated housing: +2.8% (+1.34% in 2022)
• Housing with gas heating: +4.5% (+1.91% in 2022)
• Oil heated housing: +7.3% (+3.73% in 2022)
The Corporation of Quebec Property Owners (CORPIQ) recalls that the increase recommended by TAL includes an average increase in the cost of insurance, but not an increase in municipal and school taxes. In one of the proposed scenarios, TAL indicates that rent growth could be 2.9% (instead of 2.3%) if the landlord faces, for example, a 5% property tax increase and includes it in the calculation (see Table 2 , hypothetical calculation scenarios).
RCLALQ cautions tenants against large rent increases that could be justified by increases in insurance or taxes. “These factors are already taken into account in the TAL scoring grid,” says Cédric Dussaud. The increased cost of insurance and taxes is only a few dollars a month. This does not justify a rent increase that goes beyond the recommended TAL. »
Regroupement is campaigning to make the use of Housing Administrative Tribunal rates mandatory to avoid unreasonable rent increases.
Deadlines
Landlords must formally submit their request for a rent increase to their tenants three to six months before the end of a lease of 12 months or more. For leases less than 12 months or indefinitely, notice must be sent to the tenant one and two months, respectively, before the end of the lease or before a new rent increase takes effect.
If these deadlines are not met, the lease agreements are automatically extended under the same conditions, i.e. the previous year’s rent remains in effect.
The notice must specify the rate of increase in rent or the new monthly amount due, the duration of the lease, and the period given to the tenant to express his refusal of the proposed increase.
Please note that if the notice goes unanswered, the landlord may assume that the tenant has agreed to the new agreement. To express their waiver, the tenant must do so within 30 days, ideally by registered mail.
Challenge the proposed increase
A special case: if you are renting an apartment in a new building, the landlord is completely free to evict you at the end of the lease if you refuse any rent increase, even the most exorbitant one. This condition applies if the owner has properly marked Section F of the lease indicating that the property was built five years ago or less.
Otherwise, in all other cases, Mr. Dussault explains that the tenant has the right to challenge any increase that he considers excessive. “Often tenants feel that they have only two options when they receive a notice of a rent increase: accept it or refuse it, in which case leave their home,” the spokeswoman said.
If the tenant chooses not to increase the rent, they may attempt to reach an amicable agreement with the landlord for an increase that both parties deem reasonable.
If an agreement cannot be reached, the landlord will file a rent application with the Administrative Tribunal. Until TAL makes a decision, the tenant is required to pay the previous month’s rent.
Regardless of housing conditions and market conditions (such as falling gas prices), TAL Judges will always grant a minimum rent increase.
From 2014 to 2022, TAL granted an average rent adjustment of 3.1% after requests that were dealt with in court.
However, it is important to note that the processing time can be quite long. For priority files, such as rent fixing requests, waiting times can be up to six months. For files that are considered non-priority, such as harassment cases, delays can be several years.
“Now TAL only accepts by appointment, which greatly increases delays,” says Cédric Dussaud.
Read also: Eviction, rent increase or foreclosure… who can help you?
Depending on the amount of the old rent
Are you about to rent a new apartment and want to avoid a sharp rent increase? Before signing the lease, make sure that the amount paid by your predecessor has been communicated to you.
Landlords must, at the time of signing the lease, provide the new tenant with a notice stating the amount of the last rent paid and the date of the last payment if the rent has not been paid within 12 months prior to the commencement of the new lease.
However, landlords do not always follow this rule, and RCLALQ encourages outgoing tenants to leave a copy of their lease with new tenants.
2022: Evictions more than double
In December of each year, RCLALQ publishes a list of evictions. According to the organization, the number of housing foreclosures, evictions, re-evictions and various types of pressure to end the lease would increase from 1243 cases in 2021 to 3110 cases in 2022, i.e. by 150%.
The significant rent increases passed on to tenants are not unrelated to this practice, which is becoming more common in Quebec.
“There is no organization in Quebec that is mandated to ensure fair evictions,” complains Cedric Dussaud. Landlords may want to get rid of their tenants and then rent them out for a much higher price.
Lease registration
Many organizations, including RCLALQ, have been calling for years for the creation of a rent registry that would give renters looking for affordable housing a little more bargaining power. The Quebec government flatly refuses to develop this idea on the pretext that it would be too expensive.
Until Quebec changes its mind, home seekers can use the Citizens’ Rent Registry, an online tool offered by La Base, a non-profit organization.
See also: Is your RPA in danger of being closed? Here are your funds