Raising rents on month-to-month mobile home lot leases (Ontario)

[Mitchell P.]

I'm evaluating a mobile home park in my area right now. The lot rents are half of what comparable parks are charging. The agent said that the tenants are month to month. I'm not sure if there are or ever were leases in place. 9 pads have tenant owned homes on them and 5 pads rent their home from the park. I know Canada had pretty strict rent increase laws. For this year the limit is a 2% increase. At this rate of increase it would take decades for me to get the lot fees up to market rates. I know I can raise the rent additional 3% per year for 3 years if I invest money into the park. What are my legal options for raising the rents 50%? Can I raise the rent more than 2% because they are month to month? Can I ask for a vacant park and then find new tenants? Can I pave the road or do another capital expenditure and then go the allowable 3% over the legal rent increase for 3 years? If I do that, does the 3% rent raise stay for ever or end after the 3%? Or does rent drop after the 3 years? Can I offer the tenants the option to sign a new lease and if they don't evict them since they are month-month? I'm looking for any options to get the rents up to market rates. Any info would be awesome.

[Matt Geerts]

If it is recreational then it doesn't matter because it isn't RTA.

You could also find out the general rate of turn-over in the park. I expect that things change all the time. 

Perhaps you could add more pads and charge market rent for those ones. Put some nice landscaping around them to up the environment, then as other pads turn over you have set a new standard of quality.

What you are experiencing is, in my opinion, a fundamental flaw in the RTA. It STRONGLY DISCOURAGES people from improving rental stock. Why bother to put money into this park if you can't get it out? It is as though they designed the laws with the assumption that investors would simply improve things anyway and they could help out the poor tenants by locking down prices. Instead it leads to constant decay until squalor.