Increasing the Value of a Plex in Montreal or Laval

A plex rarely sells on its decor. The buyer adds up the rents, subtracts the expenses, and the offer follows that result. Here is what raises that number in Montreal and Laval, what the Tribunal administratif du logement (Quebec’s rental board) has allowed since January 2026, and what destroys value instead of creating it. General information: check your own case with a legal advisor and an accountant.

Why income decides the price of a plex

Two buyers look at the same duplex and do not calculate the same thing. The future occupant compares it with the plexes sold nearby and thinks in monthly payments. The investor starts from net income and converts it into a price. A dollar of recurring rent therefore weighs more than a dollar of cosmetics.

No official source publishes a capitalization rate for plexes in Montreal or Laval. Be wary of one quoted without a reference. APCIQ, for its part, publishes market movements: in August 2026, in the Montreal CMA, plex listings climbed 15% year over year and sales fell 13%, but the median plex price rose 2% and their average time on market is the only one to have come down, to 52 days.

Increasing a plex’s value: what fixation de loyer has allowed since 2026

The method changed on January 1, 2026. The Règlement sur les critères de fixation de loyer, the rent-setting criteria regulation, amended by decree 1455-2025, applies to applications where the avis de modification de bail, the lease modification notice, was given on or after that date. The old method still governs earlier notices. Article 3 lists six criteria, and six only.

Your expense grid is no longer read line by line. Heating, electricity, maintenance, snow removal, management: these items are no longer separate criteria. They are absorbed into the base percentage, which article 3.1 calculates on the three-year average of the changes in Quebec’s consumer price index.

A tax increase does not pass through in full. Article 4 requires the tribunal to subtract the absolute value of the base percentage from the observed variation. A 3% tax increase in a year when the base is 3.1% therefore adds nothing. The 6.7% figure released in January 2026, for its part, covers only the portion of the rent tied to services attached to the tenant personally, in a seniors’ residence.

These percentages apply when the tribunal sets the rent. Between you and your tenant, the agreement is what counts: article 1942 of the Code civil du Québec requires a notice 3 to 6 months before the end of a lease of 12 months or more, article 1945 makes the tenant’s silence an acceptance, and article 1947 leaves you one month after a refusal to apply to the tribunal.

The work that is recovered in the rent, and the work that is not

Schedule I of the regulation lists capital expenditures: foundations, framing, roof, exterior cladding, balconies, brick, deteriorated windows, French drain, security systems, major renovation of a kitchen or a bathroom, floors, electrical panel, soundproofing, insulation, heating, charging stations, backflow valves.

What cannot be recovered is just as precise.

• What a third party paid. Article 13 reduces the expense by the amount of any public assistance and any indemnity paid by a third party. A roof redone by the insurer is not worth 5% to you.
• What benefits a single unit. Article 5 sets the attributable share according to the proportion of the rent relative to the building’s income, and restricts it to the benefiting units alone when the expense does not concern them all. Redoing the third floor’s bathroom does not touch the ground floor rent.
• What was paid at the wrong time. Only expenses from the reference period count: for a lease ending between April 1 and December 31, the calendar year preceding the term. A roof paid for in 2024 does not resurface in a notice for a lease that ends in 2027.

Keep the order of magnitude in mind: five percent of an expense is not five percent of the rent. In a triplex where one unit represents a third of the income, a $40,000 invoice gives an attributable share of about $13,300, of which 5% comes to some $667 a year. That is an application of the formula, not a promise, and the same reflex applies elsewhere, as what renovations really return explains.

A tenant’s departure, the one moment when the rent resets

The rent between two leases is not free. Article 1896 of the Code civil requires the lessor, when the lease is entered into, to give the new tenant a notice stating the lowest rent paid over the previous 12 months, or the rent set by the tribunal during that period. That is section G.

Article 1950 gives the new tenant a rent-setting recourse within 10 days of entering into the lease if they pay more than that rent, within two months of the start of the lease if they did not receive the notice, and within two months of learning the fact if the notice was false, which on top of that opens the door to punitive damages. A rent jump at turnover is therefore a bet on the tenant’s silence, and a rent rolled back after the sale becomes the buyer’s problem.

The exception exists. Article 1955 sets aside rent setting during the five years following the date the building is ready for its use, if it is newly built or if its rental use results from a recent change of destination. The lease still has to provide for it and state the maximum rent payable during those five years. That is section F.

The expenses the buyer and the lender will recalculate

The buyer does not take your figures as given. They normalize: taxes, insurance, heating paid by the lessor, water heater rental, snow removal, management, bad debts, vacancy and a maintenance reserve. A heated lease reads as a lower rent, and taking heating out of the lease is a modification subject to the same notice regime, one the tenant can refuse.

The lender’s logic changes with the number of units. For a 2 to 4 unit building not occupied by the owner, CMHC allows up to 50% of gross rental income to be added to the ratios, with a maximum loan to value of 80% and a 25-year amortization. From 5 units, it is another product: it finances up to 85% of value on a purchase as on a refinancing, allows amortization of up to 40 years for an existing building, and requires five years of multi-unit management experience. There, it is the building’s income that qualifies the loan. The mortgage calculator gives the payment; the income decides the offer.

What destroys a plex’s value instead of increasing it

The unit the municipality does not recognize. A dwelling fitted out in a basement does not become compliant because it is rented. Check with the city before you count its rent, as the Laval investment guide points out.

The favour rent. Article 6 of the regulation provides that if the rent at the end of the lease is a favour rent, the tribunal determines it from the rent of comparable dwellings. Renting to your brother at $700 does not create market evidence.

Cutting a service to save money. Article 8 requires the tribunal to reduce the rent to the extent that the lessor failed, during the previous 12 months, to maintain the quality of services or to provide the use of an amenity. Removing the parking spot or the storage locker can cost more than the saving.

Emptying the building as a strategy. Repossession and eviction follow a strict regime, with a burden of proof that rests on the lessor, detailed in repossession by an owner-occupant.

The documents that prove the income to a buyer and a lender

I ask for this stack before talking about price, and the lender will ask for the same thing.

• Every signed lease, with each one’s section G, and any Tribunal administratif du logement decisions there may be.
• The modification notices sent, the tenant’s written answer and the dates.
• A rent roll: rent under the lease, start and end dates, services included, seniority.
• The tax bills for the last three years and the insurer’s notices.
• The invoices and proof of payment for capital expenditures with their dates, plus the grant letters and insurance settlements, which article 13 deducts in any event.
• The income and expense statements, and your T776 and TP-128 returns.

A plex whose rents are advertised without leases gets discounted.

Frequently asked questions

I am redoing the roof this summer. How much can I raise the rent? Nobody can tell you in advance. The regulation provides 5% of the expense, applied to the share attributable to each unit under article 5, and only for the reference period. The increase exists only if the tenant accepts it or if the tribunal grants it.

My tenant is leaving. Can I set whatever rent I want? You have to declare in section G the lowest rent paid over the previous 12 months. The new tenant then has 10 days to ask for fixation de loyer, two months if the notice is missing or false.

A buyer is offering less because my rents are low. Should I wait? That depends on your lease calendar, not on a market hunch. Under this method, rents come back up slowly, and nobody can guarantee you a price 18 months from now.

To go further, read Managing rental properties in Montreal and Laval and Income plexes in Montreal and Laval, the honest beginner’s guide.

Thinking of selling your plex in the next 24 months? Write to me: we read the leases, the sections G and the notices in progress before talking about price.

Georges Matar

Residential Real Estate Broker · RE/MAX DU CARTIER INC.

Contact Georges