Rent Increase Calculation: The TAL Method Explained for a Rental Portfolio

Rent increase calculation according to the Tribunal administratif du logement relies on precise criteria: a base percentage for rent, separate treatment for tenant-related services, and a distinct calculation for capital expenditures. For a portfolio of several buildings, applying these rules unit by unit, without errors or late notices, quickly becomes an administrative task in its own right.

How the TAL frames the calculation of a rent increase

The Tribunal administratif du logement publishes a calculation tool every year, based on the Regulation respecting the criteria for the fixation of rent. This tool doesn't set a single mandatory number: it serves as a reference to assess what would be considered fair and reasonable if a tenant challenged the notice of lease modification.

For notices given as of January 1, 2026, the TAL announces a distinct base percentage for the rent portion, another for the portion related to services attached to the tenant personally, and separate treatment for capital expenditures. These rates change from year to year. Before applying a percentage to your portfolio, the version in effect should always be confirmed directly on the TAL's official tool, since this data changes annually.

The components factored into the calculation

The calculation isn't limited to a percentage applied to the current rent. The TAL distinguishes several items:

• The base percentage applicable to the rent portion
• The portion related to services attached to the tenant personally, treated separately
• Capital expenditures, meaning major work carried out on the building
• Ongoing costs such as maintenance, energy, or management fees, depending on the date of the notice

This breakdown requires supporting documents: work invoices, proof of expenses, justification per building. A hypothetical example illustrates the logic: for a unit with a monthly rent set at a certain amount, a standard increase based on the 2026 base percentage would represent a fraction of that amount, before adding a separate portion for eligible major work carried out during the previous year. The final calculation therefore depends as much on the situation of the building as on the published rate.

What this means for a portfolio of several buildings

An owner managing a single duplex can redo this calculation once a year without much difficulty. For a portfolio of several multi-unit buildings, the reality changes: each building has its own history of work, its own capital expenditures to allocate, and sometimes different notice dates depending on the leases in place.

The TAL also distinguishes rules based on whether the notice of modification was given before or after January 1, 2026. A portfolio managed without a centralized file risks applying the wrong rate to a unit, or sending a notice past the deadline, which can invalidate the increase for the current year.

Common mistakes that expose a portfolio owner

Certain mistakes come up regularly among owners who still manage their portfolio themselves:

• Applying the same percentage to all units without distinguishing the capital expenditures specific to each building
• Sending the notice of lease modification past the required deadline, which can result in losing the right to increase rent for the year
• Not keeping invoices related to major work, making the capital expenditure portion impossible to justify before the TAL
• Confusing the rent portion with the portion related to services attached to the person, particularly in buildings with services included

These mistakes don't necessarily lead to a challenge, but they weaken the file if a tenant decides to bring it before the Tribunal.

Why entrust this calculation and its legal follow-up to a dedicated team

At Gestion Morin, mastering the TAL's rules is part of the daily work: calculating notices of modification, meeting deadlines, preparing files in case of rent fixation or eviction proceedings before the Tribunal. Since major renovations remain in-house thanks to RBQ licence 5825-5258-01, the capital expenditures factored into an increase calculation are documented directly, without depending on an outside subcontractor to obtain the necessary proof.

This approach applies to owners of multi-unit portfolios in Centre-du-Québec, notably in Victoriaville, Drummondville, and Trois-Rivières, who want leasing, tenant selection, rent collection, maintenance, and emergencies handled without having to step in themselves. To find out what this could mean for your portfolio, request a quote for managing your buildings.

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