During the pandemic, in the past two years, rent increases were frozen by the government. The freeze was lifted at the last quarter of 2021. The allowable rent increase is now at 1.5% of the rent.
Some clients are concerned that rent increases could cause their tenants to give notice of their premises. This might happen if the amount of rent increase is high. With the allowable rent increase of only 1.5%, tenants may not move for that minor increase as the cost of moving is much higher. Another reason to implement rent increase annually is to keep up with the market rent, especially during the hot rental market.
Rent increase notices can be served any time, at least three calendar months prior to the effective date. Regardless when you serve during the month, the effective date will still be on the first day of the 4th month. Example: Whether the notice of rent increase is served on March 16th or on March 27th, the effective date of the rent increase will still be on July 1, 2022. Also be cautious in how you're serving the notice of a rent increase, as it’s important to ensure the notice is enforceable and legally served.
If you decide to leave all the mundane work of managing your own rental units, we are here to assist you in managing your investment worry-free!