Email this pageAbove Guideline Rent Increases (AGIs) – Utilities
The legislation continues to allow landlords to apply for above guideline rent increases to pass extraordinary utility costs through to tenants. When utility costs decrease, tenants who received an AGI for this expense will have their rent reduced accordingly.
Threshold for Rent Increases/Decreases
The threshold for an extraordinary utility increase is the rent increase guideline plus 50% of the rent increase guideline (CPI). This means that a landlord may claim the amount above this threshold for a utility AGI. For example, if the guideline were 2%, the threshold would be 3%, and a landlord could only claim costs in excess of 3% of the utility increase.
Landlords will only be required to reduce utility costs for five years after the initial increase was granted.
Determining Percentage Rent Increase/Decrease
Even if a landlord’s costs exceed the threshold, no utility AGI increase is ordered that results in less than a 0.50% rent increase for tenants. The same rule is applied to utility AGI rent reductions. No rent reduction is required that results in less than a 0.50% rent decrease for tenants. This is to avoid disruption to all parties caused by very small changes to rent.
Information for Tenants
After a landlord charges an AGI for utilities, they must provide written notice of actual utility costs on an annual basis to current tenants. This is so tenants can verify whether their rents should be decreased. This annual reporting is required for a period of five years following an AGI increase, and only applies to tenants who received the original utility AGI.
Tenants can request a copy of actual utility bills on CD for $5 from the landlord.