Draft Regulation Amending the Regulation on Rent Setting Criteria

The Quebec Landlords' Association (APQ) is submitting its recommendations to the Direction des orientations et de la gouvernance municipales, Ministère des Affaires municipales et de l'Habitation, regarding the Draft Regulation Amending the Regulation on Rent Setting Criteria.

The APQ welcomes the revision of this regulation and has carefully read the Draft Regulation on Rent Setting Criteria (hereinafter the Draft Regulation) published on April 16, 2025, in the Official Gazette.

We understand that the Draft Regulation is intended to simplify the current calculation of rent increases and to provide greater predictability for rent increases. Therefore, among the elements we have retained, the Draft Regulation introduces the following changes, which we comment on:
• A fixed limit of 5% for the percentage applicable to capital expenditures. The imposition of this 5% rate results in a 20-year depreciation period and may remain inadequate for certain projects. Furthermore, the percentage appears arbitrary and takes no account of the nature of the project or the useful life of its components. The APQ therefore proposes increasing the percentage applicable to capital expenditures to 10% and considering the possibility of a higher or lower percentage in certain cases to allow for depreciation based on the asset's useful life.
• Removal of a percentage applicable to service costs; Such an exclusion risks compromising the financial viability of many establishments, particularly those that must bear significant and recurring increases in service costs—whether for food, maintenance, care, or security services—over which managers have little or no control.
• Redefinition of the treatment of school and municipal property taxes, and insurance fees, by limiting possible increases to amounts exceeding the base percentage. The APQ notes that a previously simple method has become more complex upon reading the Draft Regulation. The treatment of school and municipal property taxes, and insurance fees, is being redefined by limiting possible increases to amounts exceeding the base percentage.

The Association would have liked to see other changes made:
- Share attributable to each dwelling: This method can be discriminatory and disadvantageous to certain tenants. The reality is that very often, some dwellings that have been occupied for a long time by the same tenants tend to have lower rents.
- Agreement to Spread the Increase: For several years, the APQ has been demanding that landlords and tenants be able to negotiate, through an agreement, the spreading of an upcoming increase over several years, whether based on work determined together in advance, or in the event of significant tax or insurance increases.
- Insurance: Variations in fire and liability insurance premiums are taken into account when calculating rent. The APQ submits that the entire premium should be taken into account in this calculation, particularly flood/water damage riders.
- Criteria for expenses resulting from a new legal requirement: To comply, landlords must allocate additional financial resources to comply with this new regulation, valuable resources that could have been used for the physical maintenance of buildings.
- Green investments: The APQ believes it would be wise to encourage innovation and environmental improvements in the rental housing sector, in synergy with Quebec's climate objectives.

We invite you to read the brief in detail in the "Recent Demands" section of the APQ website. https://www.apq.org/medias/revendications-recentes/\n _blank https://www.apq.org/medias/revendications-recentes/

We will inform you when this regulation comes into force and when the final changes are adopted.