Tenant asking for price reduction

Oct 23rd, 2020 5:30 pm

#1

JGAGNON67 [OP]: Newbie; Oct 26, 2007; 29 posts; 27 upvotes; Woodbridge

Oct 23rd, 2020 5:30 pm

Hi Everyone, I know that rental rates in the GTA have gone down substantially over the last few months.
Last week one of my tenants reached out as their lease was coming to an end and asked for a price reduction - we ended up coming to a number that worked for both of us.
Today, another tenant called me and asked for a price reduction also - she has been in the unit over two years - and has been great. She has been unable to find full time work in her field since COVID (she is a waitress). I know rates have gone down, and believe I should come back with about a 15% reduction. My question is, is there anything we need to do to in terms of paperwork? I don't believe a new lease is required as both tenants have been there over a year.
Are any of you dealing with the same situations? Are you giving reductions to your tenants?
Thanks in advance.

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Oct 23rd, 2020 6:22 pm

#2

teoconca: Deal Fanatic; Oct 16, 2008; 8107 posts; 2763 upvotes; Maple

Oct 23rd, 2020 6:22 pm

I would reduce the rental rate temporary to maintain/keep the tenants (if good tenants). Both of you can agree to length of time.

Oct 23rd, 2020 6:25 pm

#3

BiegeToyota: Deal Addict; Dec 13, 2016; 3710 posts; 3207 upvotes

Oct 23rd, 2020 6:25 pm

teoconca wrote: ↑ I would reduce the rental rate temporary to maintain/keep the tenants (if good tenants). Both of you can agree to length of time.

How do you reduce the rates in Ontario temporarily? If he reduces the rate he is only allowed to raise it 2% in 12 months.

Oct 23rd, 2020 6:31 pm

#4

moeymoeymoeymoe: Member; May 7, 2015; 373 posts; 479 upvotes; Toronto, ON

Oct 23rd, 2020 6:31 pm

BiegeToyota wrote: ↑ How do you reduce the rates in Ontario temporarily? If he reduces the rate he is only allowed to raise it 2% in 12 months.

Anything is possible if you have two willing participants.

+1

Oct 23rd, 2020 7:06 pm

#5

CNeufeld: Deal Guru; Mar 23, 2008; 12210 posts; 8616 upvotes; Edmonton

Oct 23rd, 2020 7:06 pm

moeymoeymoeymoe wrote: ↑ Anything is possible if you have two willing participants.

But if one party (i.e. the tenant) later becomes unwilling to have their rent raised later by the 15% they got a reduction for, I suspect the LTB would side with them, because that’s what they do. You can’t sign away your rights in a residential lease. Anything that does that in a lease agreement is voided.

To the OP, if you want to do something like that, I would look at the standard lease agreement, in the “rent discount”section. And I would get any agreement in writing, even if you’re just doing a month-to-month agreement. Signed documents are good.

C

Oct 23rd, 2020 7:16 pm

#6

BiegeToyota: Deal Addict; Dec 13, 2016; 3710 posts; 3207 upvotes

Oct 23rd, 2020 7:16 pm

moeymoeymoeymoe wrote: ↑ Anything is possible if you have two willing participants.

Or 3

Oct 23rd, 2020 7:22 pm

#7

divx: Deal Expert; Oct 26, 2003; 35113 posts; 4304 upvotes; Winnipeg

Oct 23rd, 2020 7:22 pm

CNeufeld wrote: ↑ But if one party (i.e. the tenant) later becomes unwilling to have their rent raised later by the 15% they got a reduction for, I suspect the LTB would side with them, because that’s what they do. You can’t sign away your rights in a residential lease. Anything that does that in a lease agreement is voided.
To the OP, if you want to do something like that, I would look at the standard lease agreement, in the “rent discount”section. And I would get any agreement in writing, even if you’re just doing a month-to-month agreement. Signed documents are good.
C

Don't say you are lowering the rent, say there is a temporary discount on the rent and this discount will be removed in the future.

Beware of Aliexpress and Mi Store

+3

Oct 23rd, 2020 7:40 pm

#8

drwxr010: Member; Mar 17, 2020; 366 posts; 396 upvotes

Oct 23rd, 2020 7:40 pm

keep the rate, but give one month free. one month rent can mean a lot for tenant to get her finances organized during this time than a small discount in the future.

+2

Oct 23rd, 2020 7:47 pm

#9

JayLove06: Deal Guru; Feb 29, 2008; 14398 posts; 10666 upvotes

Oct 23rd, 2020 7:47 pm

I'd rather give a rebate or 6 month discount than a rate reduction. Especially if you're in Ontario. You will lose a lot more than just that 1 year of reduced rent.

Oct 23rd, 2020 8:37 pm

#10

tempperm: Sr. Member; Mar 10, 2004; 692 posts; 231 upvotes

Oct 23rd, 2020 8:37 pm

CNeufeld wrote: ↑ But if one party (i.e. the tenant) later becomes unwilling to have their rent raised later by the 15% they got a reduction for, I suspect the LTB would side with them, because that’s what they do. You can’t sign away your rights in a residential lease. Anything that does that in a lease agreement is voided.

To the OP, if you want to do something like that, I would look at the standard lease agreement, in the “rent discount”section. And I would get any agreement in writing, even if you’re just doing a month-to-month agreement. Signed documents are good.

C

Where is this standard lease agreement? Is this agreement for ontario?

Oct 23rd, 2020 11:30 pm

#11

MacEngI: Member; Aug 20, 2006; 370 posts; 22 upvotes

Oct 23rd, 2020 11:30 pm

BiegeToyota wrote: ↑ How do you reduce the rates in Ontario temporarily? If he reduces the rate he is only allowed to raise it 2% in 12 months.

Via a temporary discount for a limited period of time. Treat it like a promo offer for the tenant.

+1

Oct 24th, 2020 12:26 am

#12

KyleTO: Newbie; Jul 8, 2018; 61 posts; 52 upvotes; GTA

Oct 24th, 2020 12:26 am

Why would a tenant agree to a temporary rent reduction? If they move into a new place, they can get a permanent rent reduction. And they'd be spoiled for choice if they were moving in 2020.

+3

Oct 24th, 2020 9:34 am

#13

LookingForStuffNow: Jr. Member; Jul 10, 2020; 146 posts; 174 upvotes

Oct 24th, 2020 9:34 am

BiegeToyota wrote: ↑ How do you reduce the rates in Ontario temporarily? If he reduces the rate he is only allowed to raise it 2% in 12 months.

Offer cashback for a few months, collect the full rent and give money back
Or a free month for every 5 months paid during these hard times (equal to 16.6% reduction)

RFD is hurting my wallet, too many good deals, my Blog

Oct 24th, 2020 9:40 am

#14

mazerbeaner: Deal Guru; Feb 22, 2011; 10299 posts; 12804 upvotes; Toronto

Oct 24th, 2020 9:40 am

KyleTO wrote: ↑Why would a tenant agree to a temporary rent reduction? If they move into a new place, they can get a permanent rent reduction. And they'd be spoiled for choice if they were moving in 2020.

Because moving sucks, and if they are in a condo there is no such thing as permanent, you could be evicted for own use.

+1

Oct 24th, 2020 9:41 am

#15

mazerbeaner: Deal Guru; Feb 22, 2011; 10299 posts; 12804 upvotes; Toronto

Oct 24th, 2020 9:41 am

I'm thinking about offering this to one of my tenants proactively. $200 off a month. There is no lease so I don't even know how to structure or phrase it. She is one of my wife's friends and was just supposed to stay awhile but I suspect she will stay for years.

Oct 24th, 2020 9:43 am

#16

budwizestest: Member; Oct 14, 2010; 218 posts; 141 upvotes; Toronto

Oct 24th, 2020 9:43 am

Landlords don't have much choice right now, and probably won't for the next two to three years.
Roll with the market reality, especially if you have a good tenant.

+1

Oct 24th, 2020 12:32 pm

#17

jerryhung: Deal Expert; Sep 19, 2004; 24139 posts; 5803 upvotes; where I belong

Oct 24th, 2020 12:32 pm

https://www.bnnbloomberg.ca/a-crazy-tim ... sc=Cfx1RSN

The Toronto rental housing market has pulled a 180.

Before the pandemic, Canada’s largest city was characterized by a rush of renters competing for places to call home. But the tables have turned as a result of a pandemic that’s upending conventional wisdom about the way we live.

Crystal Chen, an analyst with rental-market tracker PadMapper, says landlords are now offering a slew of incentives.

“I’ve seen two months of free rent with at least a year-long lease as well as things like six months of free parking or storage,” she said in a phone interview.

A search of rentals.ca reveals an ad for a bachelor apartment near Ryerson University offering free rent for the rest of 2020. The building boasts amenities such as an “indoor penthouse pool” and “state of the art exercise room.” A listing in Toronto’s Annex neighbourhood entices with one month of free rent and free internet for students who sign a lease in October.

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Oct 24th, 2020 2:28 pm

#18

CNeufeld: Deal Guru; Mar 23, 2008; 12210 posts; 8616 upvotes; Edmonton

Oct 24th, 2020 2:28 pm

tempperm wrote: ↑ Where is this standard lease agreement? Is this agreement for ontario?

If one was to Google “standard lease agreement ontario”, one would find the answer to some deep questions...

C

Oct 24th, 2020 2:58 pm

#19

MacEngI: Member; Aug 20, 2006; 370 posts; 22 upvotes

Oct 24th, 2020 2:58 pm

mazerbeaner wrote: ↑ I'm thinking about offering this to one of my tenants proactively. $200 off a month. There is no lease so I don't even know how to structure or phrase it. She is one of my wife's friends and was just supposed to stay awhile but I suspect she will stay for years.

Best to consult your lawyer, but for some free sample clauses from the web that you can finesse. LINK HERE

Oct 24th, 2020 7:52 pm

#20

sunflower123: Newbie; Sep 19, 2006; 24 posts; 4 upvotes

Oct 24th, 2020 7:52 pm

Current rent is about 10%-18% lower than last year, for example 1 bed 1 bath unit, about $200-$350 lower by month, and $2400-$4500 annually. Plus, if the tenant move to a new place, the annual rent increase will be based on the low rent.

Annual saving of $4500 definitely worth a move-out.