A rent increase is something that concerns every renter in the province. Rest assured, your landlord can only raise rents by an amount dictated by the Residential Tenancy Branch of BC (RTB).
In this unprecedented year of rent freezes due to the COVID-19 pandemic, determining the right allowable increase can be trickier than in previous years. In the table below we have outlined whether the 2020 allowable increase of 2.6% applies to your situation or whether the significantly lower, 2021, 1.4% allowable increase applies instead.
What is the allowable rent increase for 2021?
For 2021, the maximum allowable rent increase has dropped significantly from 2020’s 2.6% to 1.4%.
If your 2020 rent was $2,000/month, your landlord can increase the monthly rent by a maximum of 1.4% to $2,028 for the year of 2021. Use the BC rent increase calculator to help calculate exactly how much your landlord can increase your rent.
When can my landlord increase my rent?
In British Columbia, your landlord can only increase rent once in a 12 month period and only 12 months after the date of the last legal rent increase. They will have to give you, the tenant, a minimum 3 month’s warning that an increase is imminent.
If your rent was increased in April 2019, your landlord can implement another increase in April 2020, and must provide a written warning at latest January 2020.
UPDATE: The provincial rental increase freeze has been extended to July 2021. Rent increases served with an effective date of April 1, 2020 to the end of 2020 are cancelled, additionally rent increases through to July 2021 are cancelled.
What are the exceptions?
There are 2 main exceptions:
1) Landlords of a manufactured (mobile) home park can increase rent by the allowable annual amount plus an additional amount to cover local government levies and regulated utility fees.
2) The landlord has received tenant’s written agreement to raise the rent more than the maximum allowable amount or by order from the Residential Tenancy Branch.
In this case, a landlord must apply to an arbitrator for approval of a rent increase in an amount that is greater than the maximum annual allowable amount. The RTB only accepts such applications on limited grounds.
What does allowable rent increase percentage mean?
The Legislation specifies that a rent increase cannot exceed the percentage amount. If you paid $1000/month for all of 2019, then your landlord cannot increase your rent more than $26 (1000 x 2.6%).
Also, a landlord cannot round up any cents left when calculating the increase. For example, if your rent is $1250 and the maximum allowable increase is $32.50, the landlord can issue a Notice of Rent Increase for a $1282.50 not $1283.
You can calculate your allowable rent increase using this online tool: BC Rent Increase Calculator
How is the allowable rent increase percentage calculated?
Each September (this year September 4th, 2019), the RTB issues the maximum allowable increase percentage for the upcoming calendar year. Based on the Consumer Price Index in British Columbia figures up to July, the allowable rent increase mirrors the rate of inflation as dictated by Section 22 of the Residential Tenancy Act.
What are the reasons for rent increase?
There are many reasons why your landlord may increase rent, such as an increase in property taxes, maintenance fees, mortgage payments and more. Always have open communication with your landlord, reach out and have a conversation about it. Reasons may be personal and specific for each landlord.
What if my landlord increased my rent higher than the allowable amount?
You do not have to pay an increase that is higher than the amount allowed by law. If your landlord’s rent increase has exceeded the legal amount, and you have already paid rent under said increase, you may deduct any over-payments from future rent. Again, speak to your landlord if you believe you have been overcharged.
What is the average increase in rent per year?
This is the second year under new provincial regulation that limits the allowable increase to the cost of inflation. Previous to 2019, old rules permitted landlords to raise rents by the cost of inflation plus 2%. However, last year, BC’s provincial government eliminated this 2% add-on.
As illustrated in the image below, rates have varied over the past 5 years with a high of 4% in 2018:
What is a fair rent increase percentage?
While the annual allowable rent increase is an indicator of the maximum rent increase, your landlord may want to adjust this to fit your situation and the rental market. See how your rent compares to the average city and neighborhood rental price.
For more information on additional rent increases, click here.