Rent Increases in Ontario Explained

If you’re a landlord in Ontario, understanding rent control feels a bit like understanding my mood swings when I was a teenager. In this video, I’ll be walking through the four different ways rent can increase: when a unit is rent controlled, when rent control doesn’t apply, when to use above the guideline increases, and when increase by agreements.

My name is Weiting Bollu. I’m the CEO and co-Founder of Openroom.ca - where my team aggregates court orders from across Canada as it relates to residential tenancy, and we make it searchable for you to make more informed decisions of who you rent to and who you rent from.  

This movement towards a transparent and connected rental ecosystem is based on my experience of losing over 35K to tenants who didn’t pay rent - yes, you can judge and laugh at me. It was painful financially, mentally, and emotionally. I believe in a world of education and that’s where Openroom University comes in where I share knowledge I wish I knew with you.  

Ok, let’s dive in shall we?

Under the Residential Tenancies Act, 2006 (RTA), some units are rent-controlled and others are rent-control-exempt, and the difference can determine whether your rent increase is perfectly legal or destined to be rejected by the Landlord and Tenant Board before it ever gets off the ground.

What’s rent control? It’s where your landlord can’t raise your rent “too much”. Your rent can go up a little, not a lot. It usually goes up once a year. The government decides how much is allowed. 

It exists because it helps people stay in their homes and to stop surprise rent jumps that people can’t afford. It usually only applies to older homes. Newer homes often don’t have rent control.

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Rent-Controlled Units

In Ontario, most units are first occupied on or before November 15, 2018 will fall under rent control. For these, the landlord can only raise rent up to the annual guideline set by the prnce ovi(RTA s.120). The next year’s allowable increase percentage is released on the Ontario government’s website before August 31st of the prior year.

Rent-Control-Exempt Units

Units first occupied after November 15, 2018 are exempt from the guideline (RTA s.6.1.) This includes new builds, new basement apartments, and shiny conversions. Here, the landlord can raise rent by any amount, but must still follow two rules:

• 12 months must pass between increases (RTA s.119)
• 90 days’ written notice required (always)

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The Four Types of Rent Increases in Ontario

1. The Regular Guideline Increase for Rent-Controlled Units

This is the classic “annual rent bump” allowed under the RTA. The province announces the percentage, you use Form N1, give 90 days’ notice, and hope the tenant doesn’t accuse you of personally causing inflation.

2. Increase for Rent-Control-Exempt Units

If your unit qualifies (under s.6.1) as rent control exempt, you can raise the rent by any amount, using Form N2. Same timing rules apply, 12 months since the last increase, 90 days’ notice.
Yes, you can raise it by 20%, but should you? That’s a question for you.

3. Above-Guideline Increase (AGI)

Under RTA (s.126), landlords of rent-controlled units can apply for an AGI if:

• Municipal taxes increased significantly
• Major capital expenditures were completed
• Security services cost more

Above-guideline increases exist to cover major capital expenses, allowing landlords to recover the cost of necessary long-term repairs, such as roofing or structural work, that can’t be absorbed through regular rent increases.

The LTB limits most AGIs to 3% above the guideline per year.

If you’re interested, I hosted a webinar with a Paralegal on AGIs! Check in the description.

4. Rent Increase by Agreement (Form N10)

Under RTA (s.121), landlords and tenants can mutually agree to a higher increase, usually to pay for improvements or extra services. Just remember, the tenant gets five days to change their mind, like a cooling-off period in case that “nice upgrade” didn’t turn out to be worth the extra rent.

Okay, time for our Rental Trio: the top 3 takeaways for this video.

1. There are 4 different types of rent increases; the more you know the more options you have.
2. Use each type of rent increase, when warranted, to improve your rental property for both your tenant and yourself.
3. Ensure the rights of each party are clearly understood and protected.

Whether your unit is rent-controlled or exempt determines what increases you can apply and how far they can go. Use the correct RTA section, the right form, and proper notice to do it properly.

• Residential Tenancies Act, 2006 (RTA): Ontario's legislation that governs rental housing and defines the rights and responsibilities for both tenants and landlords, including rent increase rules.
• Ontario Rent Increase Guideline 2026: The official Ontario government page showing the 2026 rent increase guideline is 2.1%, the maximum landlords can increase rent annually without LTB approval.
• Form N1 - Notice of Rent Increase: The official form landlords must use to notify tenants of a rent increase up to the guideline amount for rent-controlled units.
• Form N2 - Notice of Rent Increase (Unit Partially Exempt): The form landlords use to notify tenants of rent increases for units exempt from rent control (first occupied after November 15, 2018), allowing any increase amount.
• Form N10 - Agreement to Increase Rent Above the Guideline: A mutual agreement form between landlord and tenant to increase rent above the guideline in exchange for capital work or new services, with a tenant 5-day cancellation right.
• Form L5 - Application for Above Guideline Increase (AGI): The application landlords file with the LTB to request permission to increase rent above the guideline for capital expenditures, extraordinary tax increases, or security services.
• LTB Above Guideline Increase Brochure: An official LTB guide explaining when AGIs are permitted, what qualifies as eligible capital expenditures, and the hearing process.
• Bill 57 - Restoring Trust, Transparency and Accountability Act, 2018: The legislation that created the November 15, 2018 rent control exemption for new residential units in Ontario.
• Landlord and Tenant Board (LTB): The tribunal that adjudicates disputes between landlords and tenants in Ontario and approves above-guideline rent increase applications.