Exceptions to Ontario's Residential Rent Control

 Exceptions to Ontario's Residential Rent Control: New Buildings, Additions to Buildings, most new basement apartments, New spaces in existing homes & units being used for residential purposes for the 1st time after November 15, 2018 #investmentproperty #landlords #rentalproperty

My update on the 2017 Real Estate Market

Mortgages / Real Estate Changes and Outlook for the future real estate market

We have had a very heated real estate market over the last couple of years. We have been seeing year over year increases of over 20% in most areas and across most market types.   The government has been introducing a number of different measures to curtail the rapid increase.  As many of you were aware there were some changes, introduced by the government, that took affect October 17^th. .The number one of these changes was the way buyers with less than 20% would qualify for their mortgage at the current posted rate compared to the discounted rate. The way it works is that, years ago when you wanted a mortgage you would have to negotiate from the rate on the window (posted rate) or now the web site to a discounted rate, the bank depending on the business you were bringing to them would decide how much they would negotiate. Lately most banks offer you the discounted rate right from the start and you would qualify at the rate that they offered you. As of October 17^th, if you are putting down less than 20%, you will still get a discounted rate but will have to qualify at the posted rate. What that means is most people will now qualify for over $100,000 less on what they could have purchased before. There were some other changes, but they will not have as much affect. 

Since then we are seeing banks increasing and decreasing mortgage rates, discounts and even prime rates, as TD did recently. Which means rates are all over the map. This is also further fueled by some restrictions on some non-chartered banks, coming into effect on November 30^th, which will limit some of the choices people have on purchases over a million, investments properties and more.

As of November 15^th, government also stated that they would be increase the land transfer tax rebate that was being offered to first time buyer from $2000 to $4000 as of January 1, 2017.

I recently came back from a conference in which one of the most important and respected major bank Chief Financial Officer spoke and explained what he believed was the forecast for the upcoming real estate market.  First of he agreed with the move that the government was doing in, basically making it much more difficult for people with less than 20% to purchase a home or at least the same valued home that they were able to purchase before October 17^th.  He stated that if there ever was a change in interest rates or other market changes, these people would be able to absorb it now that they had to qualify at a higher interest rate. He mentioned that it seemed that the new outlook for the government was that it was ok to rent and that not everyone had to own their own home. He stated that interest rates would not be going up or changing much, since most other developed countries around the world had interest rates still lower than us.  Since our economy was not doing as well as the government would like, we might even see further drops. Then in regards to foreign investors, he stated that this would also continue because other countries might devalue their currencies further to stimulate their manufacturing sector, thus causing funds to flow out, into a secure and profitable area – Canada.

As you can see there are lots of changes that are happening, and it looks like things will stay steady and we will continue with a fairly strong real estate market.

2015 Residential Rent Increase Guideline for Ontario Canada

Just in case there are some specific circumstances in which the rent increase can be more, contact me for more details..

2015 RENT INCREASE GUIDELINE

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Each year, the Ontario government announces the province’s Rent Increase Guideline for the following year. 

Ontario’s annual Rent Increase Guideline is based on the Ontario Consumer Price Index (CPI), which is a measure of inflation calculated monthly by Statistics Canada. The rate of allowable rent increases for 2015 will be 1.6 per cent.

The guideline is the maximum amount that most landlords can increase a tenant’s rent during the year without making an application to the Landlord and Tenant Board. It is based on the CPI, which is regarded as an objective, reliable measure of inflation, charting the change in the price of all goods and services in the provincial economy.

In most cases, the rent for a unit can be increased if at least 12 months have passed since the tenant first moved in, or since his or her last rent increase. The tenant must be given proper written notice of the rent increase at least 90 days before the increase takes effect.

The 2015 guideline applies to rent increases between January 1 and December 31, 2015. 

THE GUIDELINE FORMULA

The 2015 Rent Increase Guideline is calculated by averaging the per cent change in the Ontario Consumer Price Index during the previous 12 months, from June 2011 to May 2012 as required under the Residential Tenancies Act, 2006 (the RTA). 
Note: The RTA sets out that the rent increase guideline cannot exceed 2.5 per cent, even if the CPI calculation is higher.

SAMPLE RENT INCREASE GUIDELINE

The monthly rent of an apartment is $800 beginning August 1, 2012. With proper written 90 days notice to the tenant, the landlord could lawfully increase the rent 12 months later on August 1, 2015.

For example:

• The guideline for 2015 is 1.6 per cent.
• The rent increase is 1.6 per cent of $800 = $12.80.
• Therefore, the new rent on August 1, 2015 could be up to $812.80 ($800 + $12.80).

ABOVE GUIDELINE INCREASES

Landlords can apply to the Landlord and Tenant Board for an increase above the guideline, if their costs for municipal taxes and charges or utilities have increased by more than the guideline plus 50 per cent.

Landlords can also apply for an increase above the guideline for operating costs related to security services and for eligible capital expenditures.

SAMPLE ABOVE GUIDELINE INCREASE

The 2015 Rent Increase Guideline is 1.6 per cent. Fifty per cent of this guideline is 0.8 per cent.

To claim an above guideline increase related to municipal taxes and charges, costs should increase by more than 2.4 per cent (1.6 per cent + 0.8 per cent = 2.4 per cent.)

For example:

• In 2014, a landlord’s municipal taxes were $10,000.
• In 2015, the landlord’s municipal taxes increased to $10,500 - an increase of five per cent.
• Therefore, the landlord is eligible to apply for an above guideline increase because the landlord’s municipal taxes increased by more than 2.4 per cent.

PAST RENT INCREASE GUIDELINES

Year	Guideline %
2015	1.6
2014	0.8
2013	2.5
2012	3.1
2011	0.7
2010	2.1
2009	1.8
2008	1.4
2007	2.6
2006	2.1
2005	1.5
2004	2.9
2003	2.9
2002	3.9
2001	2.9
2000	2.6
1999	3.0
1998	3.0
1997	2.8
1996	2.8
1995	2.9
1994	3.2
1993	4.9
1992	6.0
1991	5.4

GUIDELINE AND RENT DEPOSITS

A landlord can collect a rent deposit from a new tenant on or before the start of a new tenancy. The rent deposit can only be used as the rent payment for the last month or week before the tenant moves out. The landlord must pay the tenant interest on the rent deposit every year. 

Under the RTA, the interest rate is the same as the Rent Increase Guideline. 

ADDITIONAL INFORMATION

The Landlord and Tenant Board provides information to the public through a network of offices across Ontario. The Board can be reached toll-free at: 1-888-332-3234, or at: 416-645-8080. Information is also available on the Board website:www.ltb.gov.on.ca

A copy of the Residential Tenancies Act, 2006, can be ordered from ServiceOntario Publications toll-free at: 1-800-668-9938, or at: 416-326-5300. It can also be ordered online at: www.publications.gov.on.ca. 

The text of the Residential Tenancies Act, 2006 is available on the e-Laws website at:www.e-laws.gov.on.ca

Rental Scams be Careful

Tenants, watch out for Rental Scams on the internet, there is no such thing as a LANDLORD OUT OF TOWN and asking you to send them the deposit and they send you the keys.
This also goes for Landlords, be careful when you put your rental property on Kijiji or Craigslist, I have seen many times then the same property is listed by someone else at are very reduced price. These people take your information from your real ad and create a fake one with better prices and asking the tenant to mail them the deposit because they are out of town. Beware.

Hottest Real Estate Areas for August

Hottest areas for the month of August are: Leaside in Toronto, Followed by Georgina and Clarington outside Toronto. Hottest Region was Durham Region with average increase from last year of 5.88%.

Downtown condominium investments

Mike Harris???s forgotten legacy, look up http://t.co/n1E1mSm5 via @financialpost the Condo Boom. This is one of the reason that many people have been investing in Condominiums.