Rent in Vancouver: What to know about the maximum rent increase

Here’s everything you need to know about your rights.

If you rent an apartment in Vancouver, you may fear annual rent increases.

While the province has frozen rent increases in 2021, landlords have been able to reissue them starting January 1, 2022. That said, they can only increase rent by a maximum of 1.5%, based on inflation.

In previous years, owners could issue much larger annual increases. In 2012, for example, the maximum rent increase allowed was 4.3%.

But a higher allowable rent increase has not been the only problem facing BC tenants in recent years.

Rent in Vancouver: Know your rights

In December 2017, the New Democratic Party (NDP) ended what can be described as a “geographical rent gap”. At that time, some tenants faced large rent increases, like the tenant in this 2021 dispute, who faced an increase of over 30%. The landlord claimed that its rental price was significantly lower than similar rental units in the same geographic area. This was an acceptable reason to raise the rent above the ceiling before the rule was changed.

For some tenants, the costs were even higher.

“My neighbors and I were threatened with huge rent increases – up to 73 [per cent] for some of us,” tenant Ross Waring said in a press release. “No one should have to face this.”

In other words, if your landlord tries to tell you that rental prices in the area are going up when they give you a big raise, you can either provide documents showing the allowable amount or request dispute resolution.

What to Expect from a Legal Rent Increase

While some landlords may choose not to increase their rent, others may meet it with an annual increase. If they issue one, they should do the following:

  • provide three months’ notice
  • use the correct rent increase notice form
  • use maximum value for 2022: 1.5 percent
  • must be at least 12 months since the last rent increase or when the rent was first established
  • the owner cannot “round up”. In other words, if the new rent goes up to $1,115.40, they can’t go up to $1,116.00.

Find out more information about legal rent increases with the Residential Rental Agency (RTB).

Are there cases where a landlord can increase the rent above the ceiling?

The short answer is yes. A landlord may increase the rent above the maximum increase in some situations.

But a spokesperson for the Attorney General and Minister for Housing said Vancouver is amazing that this only happens in “exceptional circumstances”.

There are three circumstances in which a landlord can ask the RTB to increase the rent above the maximum expense limit.

  • the owner has incurred a financial loss from an extraordinary increase in residential property operating expenses
  • the owner, acting reasonably, incurred a financial loss for the costs of financing the purchase of the residential property, if the financing costs could not have been anticipated in reasonable circumstances
  • the owner, as a tenant, received an additional rent increase for the same rental unit.

There is “a very high barrier for homeowners to prove a financial loss.” This loss must be a “net operating loss” where your expenses exceed your total income. The owner must prove that an extraordinary increase in operating expenses led directly to a net loss, the ministry added in an email.

Any landlord’s request for a rent increase is determined on a case-by-case basis, but the onus is on them to prove that they are operating at a loss.

Criteria for eligible capital expenditures

For more modest increases, including necessary repairs or improvements, the landlord may request a rent increase for capital improvements.

Capital expenditures are eligible if they are incurred for the installation, repair or replacement of a major system or major component for one of the following reasons:

  • Keep the residential property in a state of conservation to meet health, safety and housing standards;
  • That has failed, is defective, is inoperative or at the end of its useful life; or
  • This achieves a reduction in energy use or greenhouse gas emissions, or an improvement in residential property security.

To be an eligible capital expense, the owner must also establish the following:

  • Capital expenditures must have been incurred within the 18 month period prior to applying to the Residential Lease Branch; and
  • Capital expenditures must not recur for at least 5 years.

Routine, ongoing or annual maintenance, such as cleaning carpets, fixing a leaky faucet or pipe under a sink, or painting the walls of the rental property are not eligible for an increase. Costs resulting from improper repair or maintenance by the landlord are also not eligible.

Rent increases are capped at 3% per year for these capital expenditures (plus the annual rent increase). However, they can be smaller depending on the RTA formula that factors the number of eligible investments and the number of housing units, spread over a period of 10 years or 120 months.

In July, all BC owners can apply for eligible capital expenditures through the RTB online application portal. Learn more about the process online.

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