Rules for rent increase

In most cases, the rent for a residential unit can be increased if at least 12 months have passed since the:

• last rent increase, or

• date the tenancy began

The landlord must give a tenant written notice of a rent increase in the proper form at least 90 days before it takes effect.

The proper forms for this notice are available from the Landlord and Tenant Board. If your landlord has not provided the proper notice, or you believe that your rent has been raised by an improper amount, you can dispute it at the Landlord and Tenant Board within 12 months after the amount was first charged.

Rent Increase Guidelines

If your unit is rent controlled, your unit's rent can only be increased by a certain 'guideline' amount, or a bit extra if your landlord applies for an Above Guideline Increase (AGI)

The rent increase guideline for 2025 is 2.5%.

The guideline is the maximum a landlord can increase most tenants’ rent during a year without the approval of the Landlord and Tenant Board.

For most tenants, your rent can’t go up by more than the rent increase guideline for every year.

The guideline applies to most private residential rental units covered by the Residential Tenancies Act, 2006. This applies to most tenants, such as those living in:

• rented houses, apartments, basement apartments and condos

• care homes

• mobile homes

• land lease communities

The guideline does not apply to:

• new buildings, additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018 

• rental units upon turnover of a tenancy (the landlord and new tenant agree on the rent amount)

• community housing units

• long-term care homes

• commercial properties

Social housing is covered by the Residential Tenancies Act, 2006, but has different rules regarding rent control and rent increase notices.

Exceptions

• In some cases, landlords can apply to the Landlord and Tenant Board for approval to raise your rent (PDF) by more than the rent increase guideline.

• In care homes (such as a retirement home), the rent increase guideline only applies to the rent portion of your bill but does not apply to the cost of services like nursing, food or cleaning.

• New buildings, additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018 are exempt from rent control.

How we calculate the guideline

It is calculated using the Ontario Consumer Price Index, a Statistics Canada tool that measures inflation and economic conditions over a year. Data from June to May is used to determine the guideline for the following year.

The rent increase guideline is capped at 2.5% to prevent significant rent increases.

A sample calculation of a rent increase

Your monthly rent is $1,000 when you sign a lease on June 1, 2024. The guideline for 2025 is 2.5%. Therefore:

• an increase of 2.5% on $1,000 = $25.00

• $1,000 + $25.00 = $1,025.00

Your landlord could lawfully increase your rent payment 12 months later, on June 1, 2025, to $1,025.00 per month

Your landlord would need to provide you written notice at least 90 days before June 1, 2025, in the proper form available from the Landlord and Tenant Board.LTB paralegal Toronto paralegal LTB toronto paralegal landlord paralegal RTA paralegal paralegal near me

How to actually increase rent?

Landlords must give their tenants 90 days written notice before the rent increase takes effect and use the prescribed form – N1. The form and instructions may be downloaded from https://tribunalsontario.ca/ltb/forms/#landlord-forms

Landlords are reminded that rent increases may take effect on January 1, 2025 provided there has not been an increase in the last 12 months or the tenant not moved in the last 12 months.

Under normal circumstances, landlords may increase the rent once every 12 months by the guideline amount only for a sitting tenant without seeking approval from the Landlord and Tenant Board. Landlords must provide 90 days written notice using the prescribed Landlord and Tenant Board Form N1. Following amendments to the Residential Tenancies Act, 2006 which became effective on April 20, 2017, rental units which were previously exempt from the guideline are now subject to it.

How to serve a rent increase?

A rent increase must be served in the same way that all other LTB notices must be served

Here are the following ways an N12 notice may be served:

1. Hand it directly to the tenant or to an adult in the rental unit;

2. Leave it in the tenant's mailbox or where mail is ordinarily delivered;

3. Place it under the door of the rental unit or through a mail slot in the door; 

4. Send it by fax to a fax machine where the tenant carries on business or to a fax machine in their home;

5. Send it by courier; or 

6. Send it by mail.  LTB paralegal Toronto paralegal LTB toronto paralegal landlord paralegal RTA paralegal paralegal near me

What are AGI Rent Increases?

Generally, a landlord can only increase the rent by the rent increase guideline. However, under certain circumstances a landlord can apply for an increase in rent above the guideline to recover expenses that are not taken into account in calculating the guideline. This is called an application for an above the guideline rent increase or AGI.

See RTA s.126.

An AGI application may include all or just some of the rental units in the residential complex.

A landlord may make an AGI application in any of the following situations:

1. There has been an extraordinary increase in the cost for municipal taxes and charges for the residential complex or any building in which the rental units are located. See RTA s. 2(1), s.126(1).1, s.126(2) and O.Reg 516/06, s.28, s.29 and s. 41;

2. The landlord has eligible capital expenses (extraordinary or significant renovation, repair, replacement or new addition the expected benefit of which extends for at least five years) for the residential complex or one or more of the rental units in it. Tenants who began their tenancy after the capital expenditure was completed cannot be included in this application. See RTA s.126(1).2,126(7),126(8),126(9) and O.Reg 516/06, s.18, s.26-28;

3. The landlord has experienced operating costs related to security services provided in respect of the residential complex or any building in which the rental units are located by persons not employed by the landlord for the first time or the costs have increased. See RTA s.126(1).3 and O.Reg 516/06, s. 30.

Except in the limited circumstances described below, the LTB must issue an order for an above the guideline rent increase if the landlord meets the statutory requirements.

The LTB has no power to take a tenant's personal financial circumstances into account when considering an AGI application.

How to File for an AGI Increase?

All relevant documents must be included with the AGI application, including a completed schedule of parties identifying all affected tenants. See O.Reg 516/06 s.22.

The LTB may refuse to process the application until any missing documents or information is filed. The LTB may refuse to allow the applicant to rely on documents at the hearing if they were not filed in time.

The application MUST be filed at least 90 days before the effective date of the first intended rent increase being claimed in the application. This is called the first effective date (FED).

Once the LTB is satisfied the application is complete and it is scheduled for a hearing, the landlord is ordered to give a copy of the application and the Notice of Hearing to the tenants whose units are affected by the application. The LTB's Rules require these documents be given to the tenants as soon as possible and at least 30 days before the hearing date.

To prevent your application or rent increase from being dismissed due to error, please contact an experienced Licensed Paralegal such as us at Kaufman Paralegal Services.  landlord & tenant paralegal board gta, paralegal rta, rta paralegal, ltb paralegal, paralegal ltb, landlord paralegal toronto, gta paralegal, paralegal services for landlords, landlord paralegal, best ltb paralegal,serve n12 notice, ltb paralegal, landlord representative, landlord representation, n12 notice, paralegal notary public, paralegal firm, n12 landlord and tenant board, landload paralegal

Michael Joseph Kaufman

michael@kaufmanrights.ca

(289) 395-0207