Ana Moreno feared she would get a rent increase at the end of her lease term in September.
The 23-year-old was working full-time in her field, but her roommate and close friend was an international student and would soon have to cut her work hours nearly in half to match a new limit set by the federal government.
Their two-bedroom, two-bathroom condo apartment in Regent Park cost $3,400 per month — a price that was already “kind of high” and that would become more difficult to pay under the changing circumstances.
So in July, Moreno pre-emptively approached her landlord to explain the new financial situation. Instead of an increase, she asked if he could reduce the rent.
Moreno researched what similar apartments in the area were leasing for and found a unit identical to hers, in the same building, listed for $400 less.
She asked for a $200 discount as a compromise, with plans to apply for the other unit if her landlord declined.
Moreno says he accepted, with a condition of signing another yearlong lease.
“I was very honest,” Moreno said. “I was like, ‘You guys like us, we have never had any problem of payment, we want to stay, but the price is not good for us.’”
Toronto rent prices have been dropping for months, so if you got into the market around the peak, now could be a good time to push back against a rent increase or make the case for a rent reduction.
Realtors who spoke with the Star said they have known landlords who are willing to negotiate, and others who aren’t. Either way, they say there’s no harm in trying.
Over the last few months, people renting month-to-month have been moving to similar places with cheaper rent or to bigger places with the same rent, said Toronto realtor Sue McLay. But she’s also seen people like Moreno who are renegotiating their current rent.
“If market rents have gone down and you’re paying more, then I think it is reasonable for a tenant to at least ask their landlord and present a case of why they think they should decrease the rent,” McLay said. “I have seen that happen successfully for several people.”
When to start renegotiating your rent
The best time to renegotiate your rent is ahead of your lease ending or once you’re month-to-month, McLay said, because you’re no longer “locked in” to your contract and your ability to leave gives you leverage.
You could do it after your landlord gives you 90 days’ notice for a rent increase because then, “they’ve opened up the conversation,” she added.
Leasing agent Justin Bailey, on the other hand, suggests renters start negotiating ahead of the 90-day period — before a landlord even has the chance to think of an increase.
“By the time they’ve given you an increase, they’ve probably thought about that number, probably had time to figure out how it works for them,” he said. “So maybe getting ahead of that, you give them something to think about before (an increase) is too concrete in their mind.”
Do your research — and show your work
Realtors suggest you find out the “market value” of similar units in your neighbourhood.
If you’re paying $3,000 and you find a similar apartment for $2,750, show your landlord, McLay said. It could help avoid a rent increase or make your case for a rent decrease.
Tenants can also tell landlords about the costs they could face if they leave.
“If they were to give their 60 days notice, the landlord would then have to find a new tenant, at which point they would very likely — unless they go the route of representing themselves, which most don’t — have to pay the realtor costs, which would be the equivalent of one month’s rent, plus HST.”
In today’s slower market, landlords also risk their unit sitting empty, she said.
Bailey emphasized that a landlord losing thousands of dollars in rent payments because a tenant has left “completely defeats the purpose of any rent increase” they may want.
It may be worth it for them to drop rent to $50 below market value if they have a great tenant, he said.
Tell your landlord why they should keep you
Negotiating won’t work for everyone, Bailey said, especially not for tenants who have a strained relationship with their landlord.
“You have to give them an incentive or an idea that you are less of a risk than them having to go out and find a new tenant,” he said.
Your chances of success are better if you are “not a headache” to your landlord, Bailey added, and you aren’t often asking for repairs, causing damages in the building, or receiving noise complaints.
McLay said people should highlight their payment history and update their landlord about any improvements to their income, like a promotion, a higher salary or a better credit score — “anything they can do to solidify their position as a strong tenant.”
You can also tell your landlord about your future plans, Bailey said. Explain why you want to be a long-term tenant. “Are your kids in a specific school district or finishing high school and you don’t want to uproot them?”
Whether or not you should renew your lease as part of that negotiation process depends on you.
While Bailey said it’s not necessary for negotiating, tenant lawyer at Advocacy Centre for Tenants Ontario Karen Andrews noted it could actually be beneficial to a tenant as it can give them more security — landlords can’t start own-use evictions during a lease term, even if they’ve sold the property to someone else.
“I’m telling people, ‘Get a lease term for three years, get a lease term for four years and you can get out of it by subletting or assigning,’ ” Andrews said.
