With the general increase in the cost of living, and tax increases by the various levels of government, a landlord's profit margin is slowly, but surely shrinking.
In this context, rent increases are essential process that the landlord needs to master as much as possible.
Here are thus some practical tips to maximize your increase in 2012.
1) The areas which allow the most substantial increases in rent are: municipal taxes, school taxes, insurance premiums and major works.
2) If you have just bought your building, the expenditure by the former owner made in 2011 for the building are valid for the increase of 2012. It is worth asking for proof of them.
3) The same holds true for your insurance costs which you will be able to compare with those of the former owner. If yours are higher, you will be able to refer to those of the former landlord to justify your increase.
4) If you have a decrease in municipal or school taxes or a decrase in your insurance costs, use the online calculator to verify that the result doesn't result in a NEGATIVE amount. The Rental Board could grant the tenant a decrease in rent if your taxes or premiums decrease. Nothing prevents you from negotiating an increase with the tenant but do not go to the Rental Board if you do not manage to agree upon one.
5) If you have made an agreement with your tenant, put it in writing and have your tenant sign it, that will avoid you a lot of problems.
6) In the setting of the rent, the major expenditures of the building cannot be spread out over several years. If you don't apply this expenditure to the rent increase in the current year, you will not be able to use it the following year. You should not confuse this rule with those regarding property taxes, which are completely different.
7) Do not trust the tenant concerning the delays surrounding the deadline to submit a request for setting of the rent at the Régie du logement. The tenant may make you think that an agreement is possible until the delay is passed, only to refuse to agree once the delay is passed.
8) By revealing the details of your expenditures (invoices) to the tenant, the latter could be ordered to refund to you the cost of opening a file at the Régie du logement to set the rent. Note that you are never obliged to do so, or to give a copy of your invoices to the tenant.
The Rental Board should publish the new guidelines for the setting of the rent towards the end of January 2012.
The Quebec Landlords Association attorneys will be available to answer your questions on this subject.
the highs and lows of rent setting in 2012
