How to plan a rent increase in full compliance
Planning a rent increase is a recurring task in the day-to-day management of rental properties in Québec. The legal and administrative framework requires meeting specific deadlines, making precise calculations, and maintaining clear communication with tenants. Here’s how to plan a rent increase in full compliance.
Understanding the legal framework for rent increases
In Québec, rent increases are governed by the Règlement sur les critères de fixation de loyer, and the Tribunal administratif du logement (TAL) is responsible for enforcing it. Each year, the TAL publishes the applicable percentages for the rent-setting criteria (taxes, maintenance, energy, etc.). These adjustment rates are based on cost inflation. A landlord may justify a rent increase based on actual expenses and must be able to provide proof, with supporting documents, in case of a dispute.
Respecting deadlines and proper notice format
To increase the rent, the landlord must send a notice of lease modification within the deadlines set by the Civil Code of Québec. For a lease of 12 months or more, the notice must be sent between three and six months before the end of the lease. For leases shorter than 12 months, the notice must be sent one to two months before the end of the lease. For an open-ended lease, the notice must be sent one to two months before the intended effective date of the changes.
The notice must be in writing and contain all mandatory information as outlined in article 1943 of the Civil Code of Québec. A notice template is available to Proprio Expert users on our platform, and the TAL also provides one to the public. Make sure to obtain an acknowledgment of receipt from each tenant when sending your notices. Make sure to obtain an acknowledgment of receipt from each tenant when sending your notices.
Using the right tools to calculate the increase
The TAL provides an official calculator to help estimate the recommended rent increase based on the financial details of the unit. This tool allows you to plan a rent increase in an objective and compliant way. However, make sure to verify the applicable reference period to use the correct version of the calculator. Typically, the calculator published in January on the TAL website applies to leases renewing between April 2 of the current year and April 1 of the following year. You can consult the TAL website to find the correct calculator for your lease.
Note : Stay tuned for updates to the rent adjustment calculator in the coming months. A bill to amend the Regulation respecting the criteria for the fixing of rent is currently under review. Register for CORPIQ’s TAL rent-setting criteria webinar for more details. This virtual event will take place in January.
Anticipating the tenant’s response
The tenant has one month to accept or refuse the increase from the time they receive the notice. If the tenant does not respond within this period, they are deemed to have accepted the proposed changes. In the case of a refusal, the landlord may, within one month of receiving the refusal, file a request with the TAL to have the rent set. If the landlord fails to submit the request, the lease will be renewed under the same conditions as before.
Conclusion
Planning a rent increase is more than just setting a number. It requires diligence, foresight, and compliance. By relying on the information and tools provided to the public by the TAL, and by respecting the required deadlines, landlords can confidently proceed with sending their rent increase notices.
