4 Ways to Navigate a Rent Increase
9 Jun 2022
The Covid-19 pandemic has impacted nearly every aspect of Canadians’ lives, from mental and physical health to the economy and housing affordability. Remote and hybrid work models also prompted many people to move away from expensive cities to less populated areas like where I live in the Maritimes.
As the demand for homes has increased across Canada, so has the price of those homes. These increases impact the costs of purchasing a home or renting. Until 2022, there were rent freezes in place; however, most of those programs have ended. Currently, landlords can increase rent by 3.8% in New Brunswick, 2% in Nova Scotia, and 1% in PEI. Many other provinces are also seeing an increase in rental costs, like Ontario and B.C. whose landlords can increase rent by 1.2% and 1.5% respectively, and Alberta which has no limits to how high landlords can increase rent.
Renters might feel that they don’t have any control over the price of their rent and rules that protect tenants may be buried in rental agreements. Below are my top tips for navigating changes in rental prices and other living expenses.
How can Canadians navigate increased rent amid rising costs of living?
1. Read your rental agreement
The rental agreement you signed when your lease started should address your landlord’s ability to increase rent. Some rental agreements stipulate that rent can only be raised by a certain percentage, within a certain period with written notice or that rent can increase when the original agreement expires and is due for renewal. Many provinces have put in legislation to control the percentage that rent can be increased for 2022. So, review any suggested increase to make sure it is in line with what is allowed by law.
2. Negotiate rental terms
If your landlord asks for an increase that is allowed but outside of your personal budget, try to negotiate. You can offer an amount that is in line with your budget to see if your landlord is willing to work with you. If you have been a good and dependable tenant, chances are your landlord would rather keep your business at a lower rental rate than take a chance on a new tenant. If your rental agreement includes maintenance or utilities, like mowing the lawn or taking out the garbage, perhaps your landlord will agree to a lower rate if you take care of those jobs yourself. Also, if there are items you would be willing to pay the increase for, like a parking spot, you might be able to negotiate these amenities with your landlord as part of the rent increase. Alternatively, if you offer to sign an extended lease agreement, the landlord might be willing to lower the rent, understanding that they will have a good, long-term tenant.
3. Comparison shop
If the increase is too high for your budget, look at other rental properties. If you find a place you like, you might be able to use the lower rent to negotiate with your current landlord. If that doesn’t work, it might be worth looking into other rental options that are within your budget. At this point, it’s worth determining the benefit of staying where you are versus relocating.
4. Review your budget
If moving isn’t an option for you and your landlord won’t budge on lowering the rent increase, take a close look at your budget to see if you are able to accommodate the increase. Can you lower discretionary expenses such as entertainment and dining out? If you have the space, consider renting a room to a friend or relative to help share the costs.
If debt and interest payments are eating into your living expenses, it might be time to reach out to a Licensed Insolvency Trustee (LIT). A LIT will work with you to make your debt more manageable and help you get back on track to a healthier financial future. Set up your no-cost and no-judgment consultation today and discover your path to debt freedom!