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 
• Additional Occupant Clauses
• 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 can use the RTB Additional Rent Increase Calculator Phase 1 to determine the amount of the rent increase and to generate a notice of rent increase form RTB-53-P1D Notice of Additional Rent Increase – Eligible Capital Expenditures (Phase 1 Details) that must be served to the tenant for the additional rent increase to take effect with the RTB-53-P1 Notice of Additional Rent Increase - Eligible Capital Expenditures (Phase 1)
• If a landlord has issued the Phase 1 Notice of Additional Rent Increase and still has an eligible amount that they can use for a future rent increase, the landlord can use the RTB Additional Rent Increase Calculator Phase 2. This calculator will generate a notice of rent increase form, RTB-53-P2D: Notice of Additional Rent Increase – Eligible Capital Expenditures (Phase 2 Details), that must be served with the RTB-53-P2: Notice of Additional Rent Increase – Eligible Capital Expenditures (Phase 2) 
• If unable to use the online calculator landlords can use the following forms:
  • RTB-53-P1: Notice of Additional Rent Increase - Eligible Capital Expenditures (Phase 1) 
  • RTB-53-P1D: Notice of Additional Rent Increase – Eligible Capital Expenditures (Phase 1 Details)
• Note: RTB-53-P1 and RTB-53-P1D must be used to issue a notice of rent increase to the tenant(s) only after the landlord has successfully applied for an additional rent increase for eligible capital expenditures. Both forms must be completed and served together
  • RTB-53-P2: Notice of Additional Rent Increase – Eligible Capital Expenditures (Phase 2) 
  • RTB-53-P2D: Notice of Additional Rent Increase – Eligible Capital Expenditures (Phase 2 Details) 

  • RTB-53-P3: Notice of Additional Rent Increase - Eligible Capital Expenditures (Phase 3)

    This form must be used to issue a notice of rent increase to the tenant(s) only after the landlord has:
    • successfully applied for an additional rent increase for eligible capital expenditures, and
    • imposed a Phase 2 additional rent increase by completing forms RTB-53-P2 and RTB-53-P2D, or the Phase 2 Additional Rent Increase Calculator
  • ​The accompanying form RTB-53-P3D must be attached to this form with the details of the rent increase

  • RTB-53-P3D: Notice of Additional Rent Increase - Eligible Capital Expenditures (Phase 3 Details) 

  • This form must be used to issue a notice of rent increase to the tenant(s) only after the landlord has successfully applied for an additional rent increase for eligible capital expenditures

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 

Additional Occupant Clauses

If the amount of rent payable is to vary with the number of occupants, parties must set out in their written tenancy agreement the amount by which it varies.  If an additional occupant resides in the rental unit, the rent will increase by the amount specified in the tenancy agreement. If an occupant stops residing in the rental unit, the rent will decrease by that same amount.

If the tenancy agreement does not include a term that the rent varies based on the number of occupants, a landlord cannot increase the rent because a new occupant begins to reside with the tenant.
See Policy Guideline 37 Rent Increases for more information about rent increases for additional occupants.

Notice of Rent Increase Not Required

The notice and timing requirements for rent increases under Part 3 of the RTA do not apply to a rent increase for additional occupants.

No Rent Increases for Minor Occupants

A landlord cannot increase the rent based on the number of occupants if:

• the occupant is a minor (meaning a person who has not reached the age of 19), or
• the occupant is no longer a minor, but was a minor when the tenancy agreement was entered into.

If, prior to May 16, 2024, a landlord increased the rent in relation to an additional occupant who is a minor, that rent increase remains in effect.

Examples

The following are examples of how this restriction applies if the tenancy agreement states that the rent varies based on the number of occupants:

• Example 1: A 2-year-old child is living with the tenant at the start of the tenancy. The landlord cannot increase the rent when that child turns 19 years-old.
• Example 2: A 2-year-old child moves in with the tenant during the tenancy. The child was not living with the tenant at the start of the tenancy. The landlord cannot increase the rent until that child turns 19 years-old.
• Example 3: A tenant has a baby during the tenancy. The baby was not living with the tenant at the start of the tenancy. The landlord cannot increase the rent until that baby turns 19 years-old.

See Policy Guideline 37 Rent Increases for more information about rent increases for additional occupants and further examples.

Unconscionable

Terms in tenancy agreements that provide for rent variances based on the number of occupants will not be enforceable if the amount by which the rent would increase is unconscionable because it is grossly unfair to a tenant. See Policy Guideline 8: Unconscionable and Material Terms for more information. 

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​ ​