Renewing a Residential Lease and Rent Increases

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You're enjoying the beautiful May weather on your balcony when your landlord comes to visit. He tells you that, starting July 1, your rent will go up from $580 per month to $630. That’s a $50 increase!

You wonder if you can refuse. And is this verbal notice valid? If you refuse the increase, do you have to move out? How do you inform your landlord of your refusal? Also, isn’t it a little late for him to be telling you about this?

Landlords must follow rules if they want to raise the rent or change any other part of a lease. This article explains these rules as well as what you can do. 

 

Is a lease renewed automatically?

Yes. When a residential lease ends, it is automatically renewed on the same terms unless the landlord has taken steps to change the terms. 

The tenant, but not a sub-tenant, benefits from this automatic renewal.

 

What does a landlord have to do to change parts of the lease when it is renewed?

A landlord who wants to change a lease - for example, to increase the rent - must send a written notice to the tenant. The deadline for sending the notice depends on the type of lease.

Example: Claude is a landlord. He wants to notify his tenants that their monthly rent will increase by $10 per month.

Length of Lease

Deadline for Notice

Example

Fixed term lease of 12 months and up

3 to 6 months before the lease ends

If the lease ends on June 30, 2009, then Claude must send his notice to the tenants between January 1 , 2009  and March 31, 2009

Fixed term lease of less than 12 months

1 to 2 months before the lease ends

If the lease ends on November 30, 2009, Claude must send his notice to the tenants between September 30th, 2009 and October 31, 2009.

Indeterminate term

1 to 2 months before the proposed change to the lease

If Claude wants to implement the change to the lease on May 30, 2009, he must send his notice to the tenants between March 30, 2009 and April 30, 2009. 

When is a notice of rent increase legally valid?

A notice of rent increase must contain the following:

  • the amount of the proposed new rent, and the increase expressed in dollars or as a percentage as compared to the current rent
  • the length of the new lease if the landlord wants to change the length
  • the amount of time the tenant has to refuse the rent increase
  • any other changes

Note: the notice must also be written in the same language (French, English, etc.) as the lease and sent to the tenant’s address as indicated on the lease.

For landlords, the Régie du logement (rental board) has a model of a notice of a rent increase and other changes to the lease.

 

What happens if a notice of rent increase does not respect the law?

It could happen that a landlord sends a notice that does not match the sample notice of rent increase provided by the Régie du logement.

For example, the notice could give the impression that the tenant has two choices: accept the rent increase or move out. Or, the notice might not say that the tenant has one month to refuse the rent increase in writing.

Whatever the notice looks like, a tenant who wants to refuse the rent increase should send a letter to the landlord saying so, within one month of receiving the landlord’s notice.

In some cases, the Régie du logement has decided that a notice that does not respect the law is not valid and that the landlord cannot get the proposed rent increase. But in other cases, the Régie du Logement has decided that these notices are valid, because the tenant did not suffer any harm because the landlord did not respect the law.

The validity of a notice that does not respect the law is therefore decided case-by-case. For the notice to be found not valid, the tenant suffer harm and must be acting in good faith (that is, the tenant does not intend to take advantage of the situation).

It is therefore a good idea to assume the notice is legally valid: don’t count on the possibility of it being found not valid.

 

How can I tell whether the rent increase is justified?

Contrary to popular belief, there are no fixed rent increases. Several factors can affect the amount of increase in rent:

  • energy costs
  • increases in municipal property taxes or in school taxes
  • changes in the cost of insurance
  • major repairs and improvements: repairing the roof or the heating system, putting in a pool, etc.
  • maintenance costs (upkeep of the building: snow removal, painting work, minor repairs, upkeep of the plumbing, etc.)

For major repairs that benefit all of the tenants of the building, the increase in rent will be shared by all the tenants. However, repairs that only take place in your neighbour’s unit should not affect your rent.

The Régie du logement’s website has a calculation form for tenants and landlords. It lets them come up with an acceptable rent increase for each rental unit. The calculation form is not a legal requirement. It is meant to be used as a negotiation tool for landlords and tenants. The form lists the various expenses the Régie du logement will take into account if it has to set the rent.

 

When I receive a notice changing the lease, what are my options?

After getting a lease change notice, you have one month to do one of the following:

  • Notify the landlord that you will leave.
  • Notify the landlord that you accept the lease changes. The lease will then be renewed with the changes.
  • Notify the landlord that you refuse the changes. The lease will be renewed, but the landlord can go to the Régie du logement for a decision on the suggested changes.

Keep in mind that if you don’t notify the landlord of your refusal, you're assumed to have accepted the new terms. It is therefore very important to let your landlord know that you disagree with any proposed changes.

 

What can my landlord do if I refuse the rent increase?

If you refuse the rent increase or any other change proposed by the landlord, the landlord has three otpions:

  1. Do nothing. In that case, your lease will be renewed on the same terms you had before.
  2. Try to negotiate a friendly agreement with you. Remember that it is always possible to settle things this way.
  3. Ask the Régie du logement to set the rent or to decide on the change to the lease that was refused. The landlord must apply to the Régie within one month of getting your notice of refusal.

If the Régie du logement accepts the landlord’s rent increase, it is important to know that you cannot change your mind and cancel the lease renewal, unless your landlord agrees.

 

What should I do if I have not received any notice of changes to the lease?

If you have not received a notice from the landlord indicating a rent increase or other type of change, you can renew your lease as it is or notify your landlord that you will be leaving.

If you want to stay, no notice is necessary. The lease will be renewed automatically on the same terms as the previous lease.

If you want to leave, send your landlord a notice of non-renewal of the lease. The Régie du logement has a sample notice (PDF).

If the lease does not have a set length, the tenant must give a written notice one to two months before leaving. If the lease is for 12 months or more, the tenant must give notice to the landlord three to six months before the end of the lease. For example, for a lease ending on June 30, the notice must be given to the landlord between January 1 and March 31.

 

I live in the rental unit, but I haven’t signed the lease and the tenant died or left. Can I stay?

In certain cases. Here are the requirements for each situation:

The Tenant Leaves

You can stay and become the tenant if you meet these three requirements:

1. You are

  • the tenant’s married or civil union spouse,
  • the tenant’s de facto partner (not married or in a civil union) who has lived with the tenant for at least six months, or
  • the tenant’s close relative, or relative by marriage or by civil union, who has lived with the tenant for at least six months.

2. You continue living in the rental unit.

3. You send the landlord a written notice identifying yourself and stating that you want to exercise your right to stay in the unit. This notice must be sent within two months of the tenant’s departure. You can use the model "Notice regarding the cessation of cohabitation ‘’ on the website of the Régie du lodgement.
 

The Tenant Dies

You can stay and become the tenant if you meet these three requirements:

1. You lived with the tenant at the time of the tenant’s death.

2. You continue living in the rental unit.

3. You send the landlord a written notice within two months of the tenant’s death. In the notice you must identify yourself and state that you want to exercise your right to stay. You can use the model "Notice regarding the death of the tenant.‘’

Important !
This article explains in a general way the law that applies in Quebec. This article is not a legal opinion or legal advice. To find out the specific rules for your situation, consult a lawyer or notary.