A rent increase is something that concerns every renter in the province. Rest assured, however, your landlord can only raise rents by an amount dictated by the Residential Tenancy Branch of BC (RTB). This is the second year under new provincial regulation that the allowable increase is limited 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.
For 2020, the maximum allowable rent increase is 2.6%. This has increased 0.1% from last year’s 2.5% maximum allowable rent increase. Thankfully for tenants, however, it isn’t the 4.6% that would have been permitted under previous laws.
When can my landlord increase my rent?
The 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.
Are there any exceptions?
There are 2 main exceptions:
- 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.
- 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 – only if one or more of the following apply:
- The landlord has completed costly significant repairs or renovations to the property that could not have been foreseen under reasonable circumstances, and will not happen again for a reasonable time period.
- The landlord has incurred a financial loss from an extraordinary increase in the operating expenses of the residential property.
- The landlord, acting reasonably, has incurred a financial loss for the financing costs of purchasing the residential property, if the financing costs could not have been foreseen under reasonable circumstances.
- The landlord, as a tenant, has received an additional rent increase under this section for the same rental unit.
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 figures up to July, the allowable rent increase mirrors the rate of inflation as dictated by Section 22 of the Residential Tenancy Act.
What does allowable rent increase percentage actually 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
Historically, what have the allowable rent increases been?
As illustrated in the image below, rates have varied over the past 5 years with a high of 4% in 2018:
For more information on additional rent increases, click here.