Rent Increase Notice: A Practical Guide for Landlords and Tenants in Quebec

Basic Rules for a Rent Increase Notice

To avoid misunderstandings or conflicts when sending a rent increase notice, landlords must comply with current regulations.

Landlords must respect specific deadlines and include all necessary information to ensure clarity. Here are key points to consider:

Notice Period

In Quebec, landlords must follow legal deadlines when sending a rent increase notice.

For leases of one year or more: the notice must be sent 3 to 6 months before the lease ends (along with the renewal notice). For leases starting July 1st, the notice should be sent between January and April.

For leases of less than one year or for indefinite-term leases: the notice must be sent 1 to 2 months before the lease ends.

This gives tenants time to understand the proposed increase and respond accordingly.

Notice Content

A valid rent increase notice must include several essential elements:

• Amount of the increase: Clearly state the new monthly rent amount. Include either the percentage increase or the dollar amount compared to the current rent.
• Response deadline: Indicate how long the tenant has to accept or refuse the increase—typically one month from receipt. If the tenant does not respond within this period, the increase is considered accepted unless proven otherwise (Article 1947 of the Civil Code of Quebec).
• Tenant rights:  Inform the tenant of their right to refuse the increase and clarify that refusal does not automatically terminate the lease.

 Good to know:  Using the rent modification notice form provided by the Tribunal administratif du logement (TAL) is not mandatory but highly recommended. It’s free, easy to use, and fully compliant with the law.

Ensuring the Increase Is Not Excessive

There is no fixed percentage for rent increases. The TAL generally suggests a rate based on inflation and rising costs such as municipal taxes or maintenance work.

You can use the TAL’s rent increase calculator o help determine a fair adjustment.

The calculator complies with the regulation on rent-setting criteria.

With the implementation of Law 31, new requirements now govern rent increases, especially for newly built or repurposed rental units. Landlords must now include in the lease the maximum rent they can charge within the first five years of renting the unit. This measure aims to provide tenants with greater transparency and predictability while allowing landlords to manage property-related costs.

Justifying a Rent Increase

To justify a rent increase in Quebec, landlords must rely on clear and reasonable criteria.

You must be able to demonstrate with relevant data that the increase is necessary and reflects actual costs incurred to maintain or improve the property.

This may include:

• Municipal tax increases: A rise in property taxes can justify a rent hike.
• Energy costs:  Higher electricity, heating, or gas bills are valid factors.
• Major renovations or improvements: Significant investments made to improve the property—such as major renovations or the installation of new equipment—can justify a rent increase.
• Insurance premium increases:   If property insurance costs rise, this can also be a valid reason for a rent adjustment.
• Maintenance needs:  Increased maintenance requirements, especially for aging systems or frequent repairs, may also justify a rent increase.

It’s important to note that if a tenant refuses the proposed rent increase, the landlord may appeal to the  Tribunal administratif du logement (TAL)  to obtain a decision. The TAL will examine the actual costs and the justification provided to determine whether the increase is acceptable.

Impact of Quebec’s Rental Market on Rent Prices

The current state of Quebec’s rental market significantly influences decisions around rent increases. In 2023, the market showed signs of adjustment following a period of high demand. Vacancy rates in cities like Montreal and Quebec City reached historically low levels, intensifying competition among tenants.

Landlords must navigate an environment of rising operating costs. Increases in material and labor costs, combined with higher mortgage interest rates, directly affect the profitability of rental properties. This may lead landlords to consider rent increases to offset these expenses.

The market continues to face a shortage of affordable housing, which limits landlords’ ability to raise rents while still attracting tenants. The scarcity of supply versus growing demand means rent increases must be justified not only by operational costs but also by market conditions. Rent increases in 2023 were already high, with reported hikes averaging up to  7.35%, according to CMHC.

Tenant Rights and Remedies

Tenants are protected by certain rights against excessive rent increases.

By law, tenants have the right to refuse the increase within the specified timeframe. If they do, the landlord must follow a legal process to uphold the increase, which may include filing a rent-setting application with the  Tribunal administratif du logement (TAL).

It’s also important for tenants to promptly report any non-compliance in the rent increase notice, such as missing information about their rights or the procedure to follow in case of refusal. Such non-compliance may invalidate the increase, depending on the circumstances.

Tips for Landlords to Avoid Conflicts

To minimize potential conflicts with tenants regarding rent increases, landlords should follow these best practices:

• Transparent communication:  Inform tenants of the reasons behind the rent adjustment before sending the notice. Open communication helps reduce misunderstandings and builds trust.
• Clear justification: Provide details about the costs that justify the increase, such as rising taxes or operating expenses (maintenance, improvements, etc.). This helps tenants understand the necessity of the adjustment.
• Respect deadlines and regulations:   Ensure the rent increase notice is sent within the legally required timeframe and includes all necessary information. This helps avoid disputes over the notice’s validity.
• Flexibility and listening:  Be open to discussing the increase with tenants. Sometimes, a compromise can be reached.
• Proper documentation:  Keep records and proof of all communications and the reasons for the increase for future reference, especially in case of a dispute.

In all cases, we encourage you to consult the documentation provided by the  Tribunal administratif du logement (TAL) to stay well-informed.