Rental behemoth CAPREIT was caught overcharging Toronto tenants
A judge has ruled that the corporate landlord broke its contract with tenants at 100 Wellesley Street East
More than a dozen tenants of the apartment tower at 100 Wellesley Street East have successfully challenged a rent increase that should have expired in 2023.
According to a decision from the Ontario Divisional Court, the Canadian Apartment Properties Real Estate Investment Trust (CAPREIT)—one of Canada’s largest landlords—issued an 8.3 per cent above-guideline rent increase (AGI) in 2013 to make upgrades to the Church-Wellesley Village building. The increase was meant to be phased in: 2.5 per cent in the first year, 2.9 per cent in the second and 2.9 per cent in the third.
This is a common practice for an AGI, which must be approved through Ontario’s Landlord and Tenant Board (LTB). Under the Residential Tenancy Act, a landlord can hand out an AGI as high as nine per cent, but it must be applied in increments of no more than three per cent over three years. The increase is amortized over the “weighted useful life” of the capital expenditure—in this case, 10 years.
But, when 2023 rolled around, CAPREIT reduced rents by just 2.5 per cent. The tenants argued that the decrease should have been for the full 8.3 per cent, but the LTB sided with the corporation, arguing that the AGI should be phased out the same way it was phased in.
The tenants successfully requested a review, and in 2025, the LTB reversed course, finding that it had “seriously erred” in its earlier decision. In fact, the 2013 agreement required the entire AGI to be reversed after 10 years. CAPREIT appealed, but the Divisional Court concluded that the language in the agreement was “not ambiguous” and ordered the landlord to pay $5,000 in costs, inclusive of disbursements and HST.
In a statement to the Toronto Star, Karen Andrews, a lawyer with the Advocacy Centre for Tenants Ontario, said that many renters across the city continue to pay expired AGIs because they don’t realize the increases are supposed to be temporary. Even when tenants suspect that something is wrong, there’s fear of fallout. “There isn’t really a lot of affordable housing out there,” said Andrews. “People will just tolerate it because they’re so afraid of fighting with their landlord.”
Zakiya Kassam is a writer and fact checker whose work has appeared in Post City Magazines, This Magazine and Now Toronto. She was previously the associate editor at Storeys.
