Free tool · landlords in Québec
Gradual TAL raise vs agreement: the simulator
Short answer: to catch up a below-market rent, a mutual agreement that brings the rent to market in year one recovers far more than small annual TAL increases — because the gradual path often takes a decade to close the gap. Enter your numbers below to see the difference, in dollars, and whether the gradual path can really catch a market that keeps rising.
The simulator
How much more does the agreement recover than the gradual path?
Adjust the current rent, the market rent, the annual gradual increase and the market's growth rate. The comparison recalculates instantly.
to catch up — or NEVER if the market rises faster.
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And that's before counting the building-value gain you're leaving on the table. Calculate the gain →
* Indicative estimate, in additional rent dollars collected versus the current rent (before taxes and fees). The "money left on the table" adds up, over the years the gradual path needs to reach today's rent, the gap the agreement would have collected from the start. The gradual path applies a compounded increase at the rate entered, capped at the target rent; the agreement applies the market rent immediately. Because the market keeps rising, the gradual path may never catch up. Any increase beyond the TAL guideline requires the tenant's free consent, through a mutual (de gré à gré) agreement.
How it works
How many years to reach market rent?
In short: gradual TAL rent increases often take about a decade — sometimes never — to bring an under-market rent up to market, while a mutual (de gré à gré) agreement gets you there right now. The simulator above quantifies that gap for your building in seconds.
The number of years shown is the "years to market": how long compounded annual increases — at the TAL rate you enter — need to reach today's rent. Formally, it solves years = ln(market rent ÷ current rent) ÷ ln(1 + increase). The bigger the gap and the smaller the rate, the longer it takes.
The real trap is that the market doesn't wait for you. If market rent rises faster than (or as fast as) your annual increases, the gradual path never closes the gap: every year the target moves away as much as you advance. That is the "real catch-up" the simulator computes — and why it often shows NEVER. An agreement instead sets the rent to market immediately, with the tenant's consent (cash for raise).
Concrete example
A $1,000 rent to bring up to $1,500.
Take a unit rented at $1,000/month while the market is at $1,500. With TAL increases of 3.5%/yr, it takes about 12 years for the gradual path to reach today's rent.
But if market rent climbs 2.5%/yr in the meantime, it will be at ~$2,017 in 12 years: the real catch-up then stretches to ~42 years. And if the market rises as fast as your increases (say 3.5%/yr), the gradual path never reaches it — the gap stays constant, year after year.
Over those 12 years, the agreement would have collected the full gap from day one: the cumulative money left on the table exceeds $30,000 — and that's before counting the building-value gain. To go deeper on the strategy, read our guide on raising rent gradually or by agreement.
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Gradual or agreement: what to know.
Is it better to raise the rent gradually or negotiate an agreement?
It depends on the gap and how fast the market moves, but for a rent well below market, a mutual (de gré à gré) agreement is almost always more profitable. Annual TAL increases compound: at 3.5% per year, it often takes about a decade to reach today's rent — and the whole time you collect a below-value rent. Worse: if the market rent keeps rising, the gradual path may never catch up. An agreement that brings the rent to market immediately captures the full gap right away; the cumulative money left on the table is often tens of thousands of dollars.
Is it legal to negotiate an increase above the TAL guideline in Québec?
Yes, provided the tenant consents freely. The standard annual increase is framed by Québec's rental board (the TAL), but a tenant can accept a higher increase — or a reset to market — through a mutual agreement, often in exchange for compensation. The agreement must be voluntary, clear and documented, with no undue pressure. That is exactly the framework Opti Loyer works within.
How does the simulator calculate the catch-up?
The gradual path applies the annual increase you enter, compounded, capping the rent at the market level; for each year, it adds the gap with the current rent (× 12 months) to get the cumulative catch-up. The agreement applies the market rent from year one, so the annual catch-up is the full gap multiplied by the number of years. The figure shown is how much more the agreement recovers than the gradual path over your horizon. The numbers are indicative and do not constitute legal, tax or financial advice.
How many years does it take to reach market rent?
Often about a decade. The exact number depends on the gap and the increase rate: it is years = ln(market rent ÷ current rent) ÷ ln(1 + annual increase). For example, going from $1,000 to $1,500 with 3.5%/yr increases takes about 12 years. The bigger the gap or the smaller the rate, the longer it takes — and that timeline assumes the market rent stays frozen, which never happens in practice.
Why does the gradual path never catch up to the market?
Because the market rises while you're catching up. If market rent grows as fast as (or faster than) your annual increases, the gap never closes: every year the target moves away as much as you advance. Mathematically, a real catch-up only exists if your increase rate exceeds market growth; otherwise the simulator shows "never." A mutual (de gré à gré) agreement avoids this trap by setting the rent to market right away.
How much can an agreement recover versus gradual increases?
The cumulative money left on the table during the catch-up period is often tens of thousands of dollars. In the $1,000 → $1,500 example over ~12 years, the agreement collects the full gap from the start: over $30,000 in additional rent across the period. On top of that comes the building-value gain, since an income property is valued from its rents.
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