Real Estate

Tenant asking for price reduction

  • Last Updated:
  • Oct 25th, 2020 10:16 pm
[OP]
Newbie
Oct 26, 2007
29 posts
27 upvotes
Woodbridge

Tenant asking for price reduction

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.
21 replies
Deal Fanatic
User avatar
Oct 16, 2008
8107 posts
2763 upvotes
Maple
I would reduce the rental rate temporary to maintain/keep the tenants (if good tenants). Both of you can agree to length of time.
Deal Addict
User avatar
Dec 13, 2016
3710 posts
3207 upvotes
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.
Member
May 7, 2015
373 posts
479 upvotes
Toronto, ON
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.
Deal Guru
User avatar
Mar 23, 2008
12210 posts
8616 upvotes
Edmonton
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
Deal Expert
User avatar
Oct 26, 2003
35113 posts
4304 upvotes
Winnipeg
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.
Member
User avatar
Mar 17, 2020
366 posts
396 upvotes
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.
Deal Guru
Feb 29, 2008
14398 posts
10666 upvotes
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.
Sr. Member
Mar 10, 2004
692 posts
231 upvotes
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?
Member
User avatar
Aug 20, 2006
370 posts
22 upvotes
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.
Newbie
Jul 8, 2018
61 posts
52 upvotes
GTA
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.
Jr. Member
Jul 10, 2020
146 posts
174 upvotes
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
Deal Guru
Feb 22, 2011
10299 posts
12804 upvotes
Toronto
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.
Deal Guru
Feb 22, 2011
10299 posts
12804 upvotes
Toronto
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.
Member
Oct 14, 2010
218 posts
141 upvotes
Toronto
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.
Deal Expert
User avatar
Sep 19, 2004
24139 posts
5803 upvotes
where I belong
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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Deal Guru
User avatar
Mar 23, 2008
12210 posts
8616 upvotes
Edmonton
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
Member
User avatar
Aug 20, 2006
370 posts
22 upvotes
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
Newbie
Sep 19, 2006
24 posts
4 upvotes
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.

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