Everything you need to know about rent increases: mistakes to avoid
A rent increase is a normal step in the rental cycle that comes around each year when the lease is renewed. However, for this process to be valid, it must comply with the Civil Code of Québec as well as the regulations in force. Here are a few mistakes to avoid so that you can proceed with your rent increase in full compliance.
Mistake 1 – Sending a rent increase notice on any date
The notice of lease modification must be sent within specific deadlines. For a lease of 12 months or more, you must send it between three and six months before the end of the lease. For a lease of less than 12 months, the deadline is one to two months before the end of the lease. For an indeterminate-term lease, the notice must be sent between one and two months before the date the modifications are intended to take effect. A notice sent outside these deadlines risks being considered invalid by the Tribunal administratif du logement (TAL).
Mistake 2 – Determining the amount of the rent increase by searching online for current prices for similar units
Comparing your unit to similar listings online does not allow you to justify a rent increase before the TAL. Each year, the TAL publishes an average rent increase percentage. However, this percentage should not be applied automatically, since expenses vary from one building to another. An official tool is available on the TAL website, allowing you to calculate the rent increase based on your actual and eligible expenses. It is important to always document your calculations with supporting evidence related to your eligible expenses, in accordance with the rent-setting criteria. Doing so allows you to clearly explain and properly justify your rent increase.
Note: stay tuned for changes to the rent adjustment calculator in the coming months. A bill to amend the Regulation respecting Rent-setting criteria is currently under review. Register to CORPIQ’s TAL rent-setting criteria webinar rerun for more details.
Mistake 3 – Communicating the upcoming rent increase verbally to the tenant
The rent increase must be provided in writing. The notice must include all information required under article 1943 of the Civil Code of Québec and the Regulation respecting the mandatory content of a notice of modification of the lease of a dwelling. A notice template is available to Proprio Expert users on our platform, and the TAL also provides a compliant template.
Mistake 4 – Believing that a single proof of receipt is sufficient for a lease signed by several roommates
If a dwelling is rented to more than one tenant and all of their names appear on the lease, you must obtain proof of receipt from each of them. One signature is not sufficient, even if the tenant tells you they have the others’ consent to sign on their behalf. It is always wiser to obtain written proof.
Mistake 5 – Ignoring a refusal received after the one-month deadline
The tenant has one month after receiving your rent increase notice to respond. However, if their response reaches you late, it is essential to verify the mailing date. For example, if they used registered mail, they may be able to prove that the response was sent before the deadline. In that case, it remains valid.
A rent increase is an essential mechanism to maintain the financial balance of a building, but it must be planned and communicated carefully to avoid surprises. By respecting deadlines, communication requirements, and using the tools available to you, you ensure compliance with the law. Learn more by consulting our article “How to plan a rent increase in full compliance” as well as the very useful lease renewal checklist published in CORPIQ’s PROPRIO magazine.
