Rent increases to offset growing costs and expenses

To raise rent above the annual rent increase limit, landlords must have the tenant's written agreement or apply to the Residential Tenancy Branch (RTB) for an Additional Rent Increase for Expenses or an Additional Rent Increase for Capital Expenditures. 

Tenants can participate in an additional rent increase process if they disagree with a rent increase.

On this page: 

• Rent increases for property upgrades 
• Verifying additional rent increase for tenants 
• Additional rent increases for expenses 
• Tenants can participate in the dispute resolution process
• Resources 
• I need help

Rent increases for property upgrades 

Landlords can apply to the Residential Tenancy Branch (RTB) for a rent increase above the yearly rent increase limit for expenses related to major repairs or improvements in a rental unit. These are eligible capital expenditures and can qualify for a rent increase if they meet one of the following criteria:   

1. Fixing, replacing or installing a major system or part to follow health, safety and housing rules
2. Fixing something in the rental unit or building that is broken or too old to use
3. Making changes that help save energy, reduce pollution or make the property safer

Requirements for eligible capital expenditures 

For an expense to qualify, it must meet these criteria:

• The capital expenditures must have been incurred within the 18-month period before applying to the RTB
• The expenses are not expected be needed again for at least 5 years
• The work is completed at the time of applying for an additional rent increase

Examples of eligible capital expenditures 

• Replacing an aging asphalt roof 
• Updating old single-pane windows in a rental building 
• Installing a new boiler

Ineligible capital expenditures 

There are several reasons why a cost may not be eligible for an additional rent increase: 

• The costs occurred because the landlord did not fix or properly maintain the rental unit
• The landlord has or will be paid for the costs by another source (e.g., rebate, insurance) 
• The costs are for regular maintenance (e.g., cleaning gutters) 

Estimating an additional rent increase for capital expenditures

The Additional Rent Increase Explorer helps estimate the amount of an additional rent increase for a capital expenditure in a residential building. Both tenants and landlords can use this tool. 

Application process for landlords 

• Landlords with eligible capital expenditures can apply to the RTB for an additional rent increase. They must include evidence and documentation of the capital improvement
• If approved for an additional increase by the RTB, landlords must provide the tenant with a Notice of Rent Increase (PDF, 418KB) - Form RTB-7 and Notice of Rent Increase Details (PDF, 309KB) - Form RTB- #RTB-53-P1D.

The notice must clearly state: 

• A breakdown showing how the additional rent increase was calculated 
• The date the rent increase takes effect
• The exact dollar amount of the rent increase

Landlords must follow the rules for an additional capital expenditure rent increase 

The Residential Tenancy Regulation outlines a formula for calculating eligible rent increases. The formula looks at eligible capital expenditures and amortizes them over a 10-year period. The formula calculates the cost of installing, replacing or repairing a major system or component and divides it by the number of rental units affected. The calculation is spread over a period of 120 months (10 years).

If a landlord is granted an ARI-C, they will serve a Notice of Rent Increase (PDF, 418KB) for Phase 1. If there is an extra amount over 3%, it can be rolled over to a Phase 2 and Phase 3 rent increase. 

• The maximum increase is 3% per phase, along with the annual rent increase 
• Any excess rent beyond the 3% cap can be rolled over for up to 3 phases, if needed
• An additional rent increase must be given at the same time as an annual rent increase 

Verifying additional rent increases for tenants 

If an additional rent increase has been approved, tenants can use a web tool to confirm the rent increase. 

To use this tool, tenants will need the amount of the eligible rent increase and the information provided on the Phase 1 Notice of Additional Rent Increase (PDF, 329.2KB). 

• Verify an additional rent increase 

Additional rent increases for expenses 

Landlords may apply to the RTB to increase rent above the yearly rent increase limit if: 

1. The landlord is facing a financial loss as a result of unforeseeable financing costs of purchasing a residential property.
2. The landlord has incurred expenses to complete significant repairs to a manufactured home park.

These costs must be related to services included in the rent. 

​ Examples include: 

• Significantly higher utility bills or property taxes
• Unforeseen financing costs when buying a property, including appraisal fees and closing costs

Landlords apply to the RTB for an order using an Application for Additional Rental Increase Form - RTB-52 (PDF, 1.9MB).  ​

Landlords must submit the following information with the application: 

• An application fee of $300 plus $10 for each affected unit to a maximum of $600 
• The amount of rent for the past 3 years  
• Proof of changes to the operating expenses 
• Any RTB decision about the property or any tenant living on the property during the past 12 months  
• Information about any changes to services or facilities at the property in the past 12 months 

Tenant rights in rent increase disputes  

Tenants have the right to seek dispute resolution if they feel that a rent increase should not be granted. Dispute resolution is a process to help resolve conflicts between landlords and tenants. A dispute will be heard by an arbitrator in a hearing who will review the evidence and make a decision. 

Tenants who challenge a rent increase should provide evidence that supports their case during the hearing. 

​Approved increases 

If an additional rent increase is approved after the hearing, the landlord must notify tenants using a Notice of Rent Increase – Residential Rental Units (PDF, 1.7MB). 

• The form should include the approved increase amount 
• The landlord must give tenants 3 months' notice before the rent increase takes effect 

Learn more about rent increase notices. 

Resources 

I need help​ ​