Findings related to capital expenditures
 26. (1) The rules set out in this section apply to the Board in making findings relating to capital expenditures.  O. Reg. 516/06, s. 26 (1). (2) A rent increase shall not be ordered in respect of a capital expenditure unless the work was completed during the 18-month period ending 90 days before the effective date of the first intended rent increase referred to in the application.  O. Reg. 516/06, s. 26 (2). (3) The value of the landlord’s own labour in carrying out the work involved in the capital expenditure is equal to the amount of time spent multiplied by a rate of pay that is reasonable given the landlord’s experience and skill in the type of work done but, (a)  if the amount of time spent exceeds the amount of time that would be reasonable given the landlord’s experience and skill, the latter amount of time shall be used in the calculation of the value of the landlord’s own labour; (b)  only that part of the value of the landlord’s own labour that does not exceed the amount a person in the business of doing such work would charge shall be considered; and (c)  the value of the landlord’s own labour does not include any amount with respect to the management and administration of the work involved in the capital expenditure.  O. Reg. 516/06, s. 26 (3). (4) The cost of a leased asset is the fair market value of the leased asset at the commencement of the lease.  O. Reg. 516/06, s. 26 (4). (5) The amount of a capital expenditure is calculated as follows: 1.  Add the following amounts: i.  The purchase prices. ii.  The cost of any leased assets. iii.  The installation, renovation and construction costs. iv.  The value of the landlord’s own labour as determined under subsection (3). 2.  Subtract from the amount determined under paragraph 1 any grant or other assistance from any level of government and any insurance, salvage, resale or trade-in proceeds related to the work undertaken or the item purchased.  O. Reg. 516/06, s. 26 (5). (6) For each rental unit that is subject to the application, the percentage rent increase that is justified by capital expenditures shall be determined in accordance with the following rules. 1.  Determine which capital expenditures affect the unit. 2.  For each capital expenditure that affects the unit, multiply the amount of the capital expenditure determined under subsection (5) by the rent for the unit, and divide that result by the sum of the rents for all rental units in the residential complex that are affected by the capital expenditure. 3.  If the Board is of the opinion that the amount determined under paragraph 2 for a capital expenditure does not reasonably reflect how the unit is affected by the capital expenditure, i.  paragraph 2 does not apply, and ii.  the Board shall determine an amount by another method that, in the opinion of the Board, better reflects how the unit is affected by the capital expenditure. 4.  Add the amounts determined under paragraph 2 or 3, as the case may be, for all of the capital expenditures that affect the unit. 5.  Amortize the amount determined under paragraph 4 over the weighted useful life of the capital expenditures that affect the unit, as determined in paragraph 6, in equal monthly instalments of blended principal and interest. 6.  The weighted useful life of all capital expenditures that affect the unit shall be determined in accordance with the following rules: i.  For each capital expenditure that affects the unit, A.  divide the amount determined under paragraph 2 or 3, as the case may be, for the capital expenditure by the amount determined under paragraph 4, and B.  multiply the amount determined under sub-subparagraph A by the useful life of the capital expenditure, as determined under section 27. ii.  Add the results determined under sub-subparagraph i B for all capital expenditures that affect the unit and round to the nearest full year. 7.  The amortization under paragraph 5 shall be calculated using the interest rate determined under section 20. 8.  The percentage rent increase that is justified for the unit by capital expenditures is determined by dividing the amortized amount determined under paragraph 5 by the monthly rent for the unit, and multiplying the result by 100.  O. Reg. 516/06, s. 26 (6).