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What is Rent Control and What Does It Mean for Canadian Landlords?

October 20th, 2014 · No Comments · Rent control

 What is Rent Control and What Does It Mean for Canadian Landlords

Mayor Of Calgary Claims Alberta Landlords Are Raising Rents Too Fast and Too High. Does This Mean Rental Control is Coming To Alberta?

Most provinces in Canada have what is called ‘rent control.’ Rent control means the government controls how much landlords can raise the rent. This can happen in many different scenarios.

One such way government control how much landlords can raise the rent is called “vacancy control.” Vacancy control means when a tenant moves out a landlord can only increase the rent by a government approved percentage for the next tenant who moves in.

Vacancy control existed in Ontario until the mid-1990s. Many landlords (both large corporations and small ‘mom and pop’ landlords) complained it didn’t allow landlords to cover their increasing costs and they were stuck with one basic rent charge for years on end.

A more common form of rent control in Canada is an annual increase guideline. This means the provincial government will announce how much landlords can raise the rents on tenants each year they live in the rental property.

This type of system exists in British Columbia. For example, BC landlords can only raise the rent on existing tenants by 2.2% in 2014.

What is Rent Control and What Does It Mean for Canadian Landlords?

In Ontario there is a Rent Increase Guideline system of rent control but it’s a bit more complicated. Residential units built prior to 1991 can only raise the rent by 0.8% in 2014.

However, if your rental property was built after November 1991 landlords are not subject to rent control. landlords owning these types of rental properties can raise the rent as much as they want to as long as they provide proper notice to their tenants.

Calgary Mayor Says Calgary Landlords Are Gouging Tenants

One province that doesn’t have rent control is Alberta. This means Alberta landlords can raise the rent according to supply and demand and market rates. This has some people upset and wanting to change things.

One of those people who wants things to change in Alberta is Calgary Mayor Naheed Nenshi. There was a story by CBC news that had a lot of Alberta landlords shaking their heads.

In the interview on the CBC Nenshi claimed many landlords are treating their rental properties as “get rich quick schemes” and ripping off renters with huge rent increases.

He went on to say that he was a landlord himself and hasn’t raised the rent in over 4 years. He said landlords who raise the rent are gouging their tenants instead of doing what he says they should be doing – only seeking a decent return on their investment.

Nenshi added Calgary landlords are raising rents when their mortgages and energy costs haven’t gone up and shamed landlords who aren’t running their rental businesses the same as he does.

Alberta doesn’t have rent control

Lots of landlords were outraged by Nenshi’s comments. They know that while the economy is now good, it’s wasn’t so long ago and Alberta landlords know the importance of tenant screening and renting to good tenants.

Experienced and successful landlords know raising the rent by a crazy amount will lead to tenants moving. Landlords will then need to pay money to advertise their rental unit, pay for credit checks, and spend lots of time for tenant screening.

Canadian Landlords And Rent Control

Investing in rental properties in Canada is a political hot potato. It’s so easy for politicians like Calgary Mayor Nenshi to attack hard-working small landlords for political gains…after all there are more tenant voters than landlord voters.

Alberta is a province that allows landlords to raise the rent without the government being involved. This means it is an attractive place to invest in rental property.

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