In recent years, finding a decent and reasonably priced rental has become a real challenge for many Quebecers. This situation has led many tenants to question the mechanisms behind the rent setting and the laws that govern annual increases in Quebec.
Is this your situation? This article explains the main factors influencing rent prices, as well as the regulations surrounding annual increases, to help you better understand the rights and obligations of both tenants and landlords.
What factors influence rent prices?
The rental housing sector in Quebec is fairly well regulated, meaning that a landlord generally cannot set the rent price arbitrarily.
However, several key factors influence how rent is determined. Let’s explore them in detail:
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Size of the unit
The type and size of a unit play a fundamental role in setting its price. For example, studio apartments, 1½, 3½, 5½ units, houses, condos, semi-detached homes, and lofts all have different pricing structures.
The unit’s capacity to accommodate tenants largely determines its cost:
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Is the unit intended for a single person?
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Does it have several rooms that can accommodate multiple tenants?
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Is the unit designed more for a family?
Although a dwelling can be used and configured in several ways, the larger it is, the higher its rent will likely be, as it can accommodate more tenants or offer more comfort to a family.
2. Quality of the unit
A freshly renovated apartement with modern finishes, high-quality materials, and state-of-the-art appliances will inevitably command a higher rent. In contrast, a unit with older installations and fewer upgrades will generally be more affordable.
The overall quality of the apartment, including its finishes and condition, has a direct impact on the rent. Landlords typically charge more for properties that offer a higher standard of living, such as updated kitchens, bathrooms, and energy-efficient appliances.
3. Services included
The services offered in a building can significantly increase its rental value.
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Is parking included in the rent?
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Does the building have a private indoor garage?
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Is access to the gym and pool free for residents?
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Is the building serviced by an elevator?
Even though these services may be advertised as "included" or "free," their costs are factored into the monthly rent. The more services a building provides, the higher the rent will likely be, as the landlord will incorporate these costs into the price.
4. Inclusions
Is the unit furnished, semi-furnished, or unfurnished? The inclusion of appliances, such as a stove, refrigerator, washer and a dryer can also influence the rent price. Landlords often adjust rents to account for the maintenance and eventual replacement of these items.
If the landlord includes utilities like electricity and internet in the rent, expect to pay more per month compared to a similar dwelling without these inclusions. The more that is included in the rent, the higher the price tends to be, as the landlord covers these additional costs.
5. Outdoor space
In urban areas, a balcony, terrace, or private yard is a highly sought-after amenity. Apartments with exclusive outdoor spaces are often rented at higher prices due to their rarity and the added value they provide for tenants looking for extra living space.
6. Storage space
Sheds, indoor storage units, basements; whatever the type, storage spaces are in high demand. The presence of additional storage can increase the price of rent, as tenants often value the convenience of extra space for their belongings.
7. Pets
Most pet owners can attest that finding a rental that allows pets can be quite challenging. Landlords are often concerned about excessive noise, odours, and potential property damage caused by pets.
As a result, rentals that allow pets are typically priced higher to compensate for the potential risks and additional wear and tear.
8. Location
Geographical location is one of the most determining factors when setting rent prices. Rental prices can vary greatly depending on whether you’re in the city, suburbs, or countryside.
The further you are from the city, the less likely your rent will be expensive. There’s often a noticeable price difference between urban and rural areas, sometimes amounting to several hundred dollars.
Even within cities, proximity to amenities, services, and public transportation can significantly influence the price. Areas closer to essential services like grocery stores, schools, and transit hubs tend to have higher rents due to the added convenience and accessibility they offer.
9. Current rental market
Landlords adjust their rents based on trends in the current rental market. When setting a price, they often refer to similar rentals in the same area to remain competitive.
If market trends are high, it’s more likely that your rent will increase, as landlords will adjust their prices to match what other properties are charging.
Rent price: the annual increase
Each year, when the lease is renewed, a landlord can increase the rent on their properties. However, rent increases in Quebec are regulated to protect tenants from unreasonable hikes, ensuring that any increases are fair and within legal limits.
An increase regulated by the Tribunal administratif du logement (TAL)
Although landlords have some flexibility, they cannot arbitrarily decide to raise the rent. Any increase must be justified and reasonable.
But how can you know if it's truly justified? Each year, the Tribunal administratif du logement (TAL) establishes a recommended percentage for rent increases, reflecting an acceptable adjustment. This calculation is based on factors such as:
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Energy costs
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Municipal and school taxes
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Insurance premiums
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Maintenance costs
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Work done on the property
These recommendations aim to strike a balance between the rights of tenants and the financial needs of landlords, ensuring that rent increases remain fair and aligned with market conditions.
Exceptions for buildings less than 5 years old
It’s important to note that if you live in a dwelling built within the past 5 years, the landlord has more flexibility when it comes to setting the rent. As long as the landlord ticks the appropriate box in section F of the residential lease, they can raise the rent as they see fit.
For newer buildings, the rules differ from those governing older properties. Landlords have greater freedom in setting rent prices, and tenants in these buildings have less recourse to contest a rent increase.
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