The 2022 Maximum Allowable Rent Increase is 1%.
This increase may be applied to all rental units including heated and unheated premises and mobile home sites located in a mobile home park.
What you need to know about rent increases in Prince Edward Island
- PEI has rent control laws.
- Landlords can only increase rent once a year, and must provide 3 months’ written notice to the tenant.
- Landlords must give a tenant notice of a rent increase on an approved form Form 10 – Notice of Rent Increase.
- Rent increases are attached to the unit, not the tenant.
- Rents can’t be automatically increased between tenants.
- Landlords wishing to increase rent above the allowable amount must apply to the Rental Office for approval – Form 12 – Application for Greater than Allowable Rent Increase.
Maximum allowable rent increase
Every year, the Island Regulatory and Appeals Commission sets the allowable percentage for rent increases for residential units. The allowable amount that rents can increase in 2021 is 1.0%. This means that in 2021, a landlord who rents a unit to a tenant for $1,000 can increase the rent to $1,010 by serving their tenant with three months’ written notice on an approved form from the Rental Office.
Permitted timing of increase
The rent increase cannot be charged until at least three full months have passed from the date the landlord delivered the Rent Increase Notice to the tenants. For example, if a tenant rents a unit beginning January 1, 2021, the date of the first allowable increase is January 1, 2022, provided the tenant received three months’ written notice from the landlord on an approved form from the Rental Office by October 1, 2021.
A landlord cannot increase the rent until 12 months have passed since the beginning of the rental agreement or when the rent was first charged for the unit, or 12 months since the date of the last rent increase, even if new tenants move into the rental unit.
When a landlord wishes to increase the rent above the allowable percentage, they must follow the procedure set out in Sections 21. to 23. of the Rental of Residential Property Act.
How does a tenant file for Return of Rent claim for improper rent increase?
If a tenant believes the landlord has improperly increased the rent beyond the allowable amount, the tenant can file an application to the Rental Office, Application for an Order – Form 2 to request an Order for a return of rent. The tenant must provide evidence of the improper rent increase which could include a copy of the former tenant’s rental agreement or a real estate listing showing the previous rent.
To complete the Form 2, list the location of the rental property; Section 1 – the other condition is 8(a) and you are required to list the amount of rent you are looking to have returned along with the reasons. Section 2 – Check off (e) and (g). Section 3 – fill in the landlord information; Section 4 – fill in your own contact information.
How does a landlord file for greater than allowable rent increase?
Step 1 – the landlord serves a Notice of Rent Increase Form 10 to the tenants who will be paying the increased rent. The rent increase cannot be charged until at least three full months have passed from the date the landlord delivered the Rent Increase Notice. The landlord must have a decision from the Rental Office approving the rent increase before it can be charged.
Step 2 – the landlord must file an Application for Greater than Allowable Rent Increase Form 12 with the rental Office within 10 days of serving the Rent Increase Notice. The landlord must serve a copy of the filed Rent Increase Application on the affected tenants. After the application is filed, the Rental Office will send the landlord and tenant(s) a Notice of Hearing which states the hearing date and the deadline that evidence must be submitted to the Rental Office.
Evidence required for a hearing on greater than allowable rent increase
Important Evidence Required
The landlord must submit to the Rental Office the following publicly accessible Registry of Deeds documents that are available on GeoLinc Plus:
- The landlord’s deed to the rental property;
- All mortgages registered against the rental property since the date of the landlord’s purchase;
- GeoLinc Assessment Report;
- GeoLinc Registry Report; and
- GeoLinc Tax Report.
Here is the link to gain access to GeoLinc Plus:
The following additional information and documents should also be submitted by the landlord to the Rental Office by the evidence deadline:
- Copies and details of all the rental agreements affected by the rent increase
- Civic addresses of the rental units
- Dates the tenants moved into the rental units
- Types of agreements – fixed term, month-to-month or a fixed term that converted to a month-to-month
- Type of units – apartment, half-duplex, single family dwelling, etc.
- Date the building was acquired by the landlord
- Name of registered owner of building
The information and documents below are required for a two-year period ending as close as possible to the date the rent increase is to begin:
- Landlord’s Financial Statement Form 15
- Rental income (rent ledger summarizing income from the property)
- Other income from the rental property – i.e. coin-operated laundry facilities
- Mortgage statements showing the periodic principal, interest, other costs paid, and the current amount of the mortgage.
- Heating costs
- Water and sewer costs
- Electricity costs
- Property tax costs. If the tax assessed value does not reflect the market value of the property then the landlord should consider submitting into evidence an appraisal, and/or the landlord’s building purchase documents.
- Management fees
- Maintenance costs
- Capital expenditures. Capital expenditures that are proposed but not completed may only lead to a rent increase effective at the time the work is completed and proof of completion has been approved by the Rental Office.
- Any other costs of the landlord not included in the above list.
The landlord is not required to submit costs the tenant is paying, i.e. electricity or heating. If any of the above information significantly changes between the date the landlord serves the Rent Increase Notice and the hearing date, then the landlord should provide the Rental Office with evidence regarding the change.
Best practices are for a landlord to have all of the above evidence ready at the time the Rent Increase Notice is served. A Rent Increase Application supported by insufficient evidence may result in the application being dismissed at a hearing.
All documents submitted into evidence with the Rental Office will be shared with the other party. Any redactions (blacking out or marking out) must be made by the landlord and tenant before the documents are sent to the Rental Office. The Rental Office is not responsible for making any redactions to the documents submitted into evidence.
The parties are responsible for maintaining the confidentiality of all documents submitted into evidence.
The Rental Officer will make a determination on the application for rent increase greater than the allowable amount based upon the following:
- Whether the increase in rent is necessary in order to prevent the landlord from sustaining a financial loss in the operation of the rental units;
- Increased operating costs or capital expenditures provided by the landlord;
- The expectation of the landlord to have a reasonable return on their capital investment; and
- The date and amount of the last rental increase.
The Rental Officer will issue a written decision to the parties after the hearing is completed. The landlord must have a decision from the Rental Office before a greater than allowable rent increase can be charged.