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Above-Guideline Rent Increases for Individual Apartments?
The TPA allows a tenant and a landlord to “agree” to a rent increase on an individual basis. The rent increase could be for a new service or a renovation in a specific apartment. For example, your landlord may offer to install an air conditioner for an extra $25 per month. No application or approval of the Tribunal is necessary.
The increase cannot be more than 4% above the rent guideline, and the agreement must be in writing and on an approved form. This form is N1O “Agreement to Increase the Rent Above the Guideline”. If the agreement is not in writing, or the increase the landlord is asking for is above 4% of the rent you are currently paying, you do not have to pay the increase. You should advise the landlord in writing that you do not intend to pay it as it is illegal.
Unfortunately, this part of the law could be abused by some landlords. They may try to convince tenants to pay extra rent for a repair which the landlord is already responsible for.
As well, a landlord could try to convince a tenant to pay a lot of money for a renovation or service which doesn’t cost the landlord very much. For example, if you pay $25 a month to the landlord for an air conditioner, over two years it may have been cheaper for you to have bought the air conditioner yourself.
Sometimes landlords may try to intimidate or harass a tenant into agreeing to individual rent increases. You should talk to the FMTA or someone from a community clinic before agreeing to this type of rent increase. There is a pamphlet about this issue entitled Should You Agree to a Rent Increase? available from the FMTA as well as community clinics.
Once you have agreed to this rent increase, there is a five day “cooling off” period in which you can reconsider the decision and cancel the agreement by giving written notice to the landlord.
If the landlord does not provide the new service, or does not undertake the renovation you have signed up for, you can apply for a rebate of the rent increase. You must apply for such a rebate within two years of the rent increase.
See Sections 130 - 132 of the TPA.