Understand how rent “discounts” work
Question & AnswerHow much rent can a landlord charge?
You should check the rental agreement for any “discounts” your landlord might be offering. Make sure you understand how much you will really be paying.
On the government’s standard form, any rent discounts must be listed in section 7.
Some landlords will give you a discount on your rent when you sign your lease. But after your discount is over, you have to pay the higher, non-discounted rate every month.
And after the first year, the landlord could raise your rent based on the full rate – not the discounted rate. This means you could find your rent increasing a lot more than the Guideline, even if your unit is covered by the Guideline.
For example, your agreement says your rent is $1200 but you only have to pay $1050 per month for the first 8 months. In the 9th month the discount will end and your rent will go up to $1200.
How the Guideline works with discounts
If the rent increase guideline is 2%, then in the above example your rent after the first year could go up to $1200 plus 2%, which comes to $1,224. This would be a 16.6% increase over what you were paying for the first 8 months.
But the landlord is allowed to do this only for the following kinds of discounts:
- up to 3 months of free rent in any 12-month period, which must only be given in rent-free periods
- a total discount of up to 1 month’s rent given anytime over the first 8 months of a 12-month rent period
- a total discount of up to 1 month’s rent given anytime over the first 7 months, plus up to a 1 month rent-free period in the next 5 months after that
- a discount of no more than 2% for rent being paid early or on time (this is the only discount that does not have to be in writing)
Landlords can offer any other kinds of discounts but they will not be allowed to apply a future Guideline rent increase to the full rent. Instead, future increases will be based on either the lower, discounted rent or some other amount. The rules for figuring out this amount are extremely complicated.