Rent increases are a common part of the rental market, but they can sometimes lead to tension between landlords and tenants. In Calgary, the growing number of people moving into the city in recent years has put additional pressure on the rental market. Coupled with low vacancy rates and construction delays for new housing, this has become something of a perfect storm.

For landlords, rent increases can help keep up with rising costs, while tenants often need predictability in housing expenses. Here’s what I can tell you about the regulations governing rent increases in Calgary and some strategic advice for both landlords and tenants.

Rent increase regulations

In Alberta, the Residential Tenancies Act (RTA) governs the rights and responsibilities of both landlords and tenants. This legislation includes rules on how rent increases can be implemented. It's important for both landlords and tenants to be familiar with these regulations, as violations can result in disputes and penalties.

Here are the key rules for rent increases in Calgary, Alberta:

• Minimum notice period ─ Landlords must provide tenants with at least 90 days' written notice before a rent increase. This notice must be given after the first year of the tenancy. Rent increases can only occur after 365 days have passed since the last increase or since the tenancy began.
• No limit on rent increases ─ Unlike some provinces, Alberta does not impose a cap on how much a landlord can raise the rent. This allows landlords flexibility in adjusting rent to reflect market conditions, maintenance costs or inflation. However, excessive increases may risk pushing tenants out or lead to disputes.
• Fixed-term leases ─ Rent increases are only allowed when a lease is up for renewal or if the lease transitions into a month-to-month agreement. Landlords cannot raise rent during the middle of a fixed-term lease unless otherwise agreed to by the tenant.

Strategies for landlords

• Market research ─ Before implementing a rent increase, landlords should research the current market conditions. Looking at similar properties in Calgary, especially within the neighborhood, can provide insight into what other landlords are charging. Overpricing your rental unit could result in losing good tenants or having extended vacancy periods. Resources such as the Canada Mortgage and Housing Corporation (CMHC) offer valuable market data.
• Communication is key ─ Being transparent about the reasons for a rent increase can go a long way in maintaining a good relationship with tenants. Landlords should explain how rising utility costs, property taxes or maintenance expenses necessitate the increase. Providing detailed breakdowns can foster understanding and lessen any shock or resentment from the tenant.
• Offer incentives ─ To soften the impact of a rent increase, landlords can offer incentives such as improved amenities, maintenance upgrades or lease renewal bonuses. For instance, upgrading appliances, installing better insulation or including utilities within the new rent can make the increase feel more justified to tenants.
• Regular maintenance and upkeep ─ Justifying a rent increase is easier when a property is well-maintained. Landlords who regularly invest in maintaining the property and improving its condition are more likely to have tenants accept rent increases. A well-maintained property also helps landlords retain tenants longer.
• Gradual increases ─ Instead of applying a large rent hike at once, landlords might consider smaller, more frequent increases. This can help tenants adjust to the new rates without feeling overwhelmed and it may help landlords avoid vacancies.

Strategies for tenants

• Know your rights ─ Tenants should familiarize themselves with the RTA and understand their rights regarding rent increases. If a landlord fails to give adequate notice or attempts to increase rent in the middle of a lease term without agreement, the tenant can contest the increase. Knowing these rights empowers tenants to protect themselves from unfair practices.
• Open dialogue ─ Tenants should engage in open communication with their landlord when faced with a rent increase. Asking for clarification about why the rent is being raised or requesting documentation for increased expenses like property taxes or utility costs can help tenants assess the fairness of the increase. In some cases, landlords may be willing to negotiate or delay the increase.
• Negotiate lease terms ─ If a rent increase feels too high, tenants can attempt to negotiate with their landlord. In exchange for a longer lease or taking on some maintenance responsibilities, tenants may be able to secure a smaller increase or avoid one altogether.
• Research the market ─ Just as landlords should do their research, tenants should look into the rental market in Calgary. Knowing the average rental rates in the area can help tenants gauge whether the increase is fair. If the proposed rent is significantly higher than comparable units, tenants can use this information to negotiate.
• Budget for potential increases ─ Tenants can plan for potential rent increases by regularly saving a portion of their income. By setting aside funds for future rent hikes, tenants can mitigate the financial strain that may come with higher rent, ensuring their budget can handle an increase when it arises.

In closing

Rent increases are inevitable. By understanding the legal framework and employing smart strategies, both landlords and tenants can navigate these changes smoothly. For landlords, maintaining open communication, offering value and conducting market research can make rent increases more manageable. For tenants, knowing their rights, negotiating and planning ahead can help mitigate the impact of rising costs. Ultimately, cooperation and mutual respect between landlords and tenants can lead to more positive rental experiences for both parties.