Ontario tenant hit with $350-a-month rent hike calls for more transparency in lease agreements

Hit with a surprise $350-a-month rent hike for her St. Catharines, Ont., home, Kara Petrunick says she'd never have signed the lease had she known the 17.5 per cent increase was allowed. 

"It's a slap in the face," said Petrunick. 

The naturopathic doctor said she rented the new, spacious three-bedroom townhouse at 177 Russell Ave. in 2021 for $2,000 a month, at the higher end of the rental market, but close to work and family. 

Petrunick, 36, signed a lease that included an information brochure from the Landlord and Tenant Board (LTB) outlining both parties' rights and responsibilities, as seen by CBC Hamilton. 

Ontario requires landlords to provide the brochure to tenants before the tenancy begins, as stated at the top of the document.

But in retrospect, Petrunick said the LTB brochure is "sneakily written" and left her under the false impression her unit was rent controlled. 

Brochure not a 'comprehensive summary': LTB

The brochure says landlords have the right to increase rent but typically "only once a year by the guideline that is set by the Ontario Government." 

That means in 2023, for example, landlords can increase rent only by 2.5 per cent. Anything higher and they'd have to make their case and get approval from the LTB. 

However, despite listing some exceptions, the brochure makes no mention that for homes occupied for the first time after Nov. 15, 2018, such as newer builds like Petrunick's townhouse, landlords can increase rent by any amount. 

Premier Doug Ford's government scrapped rent control for newly-built or newly-converted rental units shortly after taking office in 2018. It was pitched as a way to encourage developers to construct purpose-built rentals. 

"If I had known there was no rent control, I wouldn't have rented it. There's no way," Petrunick said. 

LTB spokesperson Janet Deline told CBC Hamilton its brochure is "not meant to be a comprehensive summary" of the Residential Tenancies Act.

Deline directed landlords and tenants to "explore materials" on the LTB's Renting in Ontario web page. 

Petrunick's residential tenancy agreement form also contained outdated information, stating that if a landlord wants to raise the rent above the provincial guideline, tenants can oppose it at the LTB — a right tenants of newer homes no longer have.

She signed her lease for Feb. 1, 2021 — a month before the province updated the form to include the fact new builds aren't rent controlled. Both versions are available to download on the province's website.

Landlord says increased costs are to blame for rent hike

In an interview with CBC Hamilton, Petrunick's landlord Alaa Yousif, a Mississauga-based real estate broker, said he was raising rent 17.5 per cent for all 16 units to cover a "significant increase" in costs including for mortgages, property taxes, insurance, snow removal and landscaping. 

He said his company Limitless Management and Services developed the vacant land with the intention of selling all the units individually, but decided to rent them out instead after construction costs ran high. 

In a letter to Petrunick earlier this year, Yousif said the 17.5 per cent rent increase is necessary. 

"This is the first increase I have provided since you occupied the unit and purposely did not increase until now and tried to hold off as long as possible," Yousif wrote. "But the expenses have gone to a point where I am unable to hold off on increasing rental prices." 

Petrunick said she understands why the province made the change — to promote building more housing — but it doesn't seem to be playing out that way. She'll stay in the townhouse because there are few other homes for rent in her neighbourhood.

"It feels like [landlords] are taking advantage of the system to make more profit," Petrunick said. "If you're going to build more housing at these prices, it's not sustainable for anybody."