How Rent Increases Work

In Ontario, rental housing providers must adhere to specific guidelines when increasing rent: 

Rent Increase Guidelines: 

  • Frequency: Rent can be increased once every 12 months, with a minimum of 12 months since the last increase or since the tenancy began. 

  • Notice: Tenants must receive a written notice at least 90 days before the rent increase takes effect. 

  • Guideline Amount: The Government of Ontario sets an annual rent increase guideline based on the Ontario Consumer Price Index. For 2024, the guideline is capped at 2.5%, despite an average inflation rate of 5.9%. 

Above Guideline Increases (AGIs): 

In certain situations, landlords may apply to the Landlord and Tenant Board (LTB) for permission to raise rent above the set guideline. AGIs are considered under specific conditions: 

  1. Eligible Capital Expenses: Significant renovations or repairs, such as work on roofs, exterior walls, foundations, or major systems like heating and plumbing. Routine maintenance and cosmetic upgrades do not qualify.  

  2. Extraordinary Municipal Tax Increases: If there's an extraordinary increase in municipal taxes and charges for the residential complex, defined as an increase greater than the annual rent increase guideline plus 50% of that guideline.  

  3. Increased Operating Costs for Security Services: Costs related to new or increased security services not previously included in rent. 

Application Process for AGIs: 

  • Timing: Applications must be submitted to the LTB at least 90 days before the proposed rent increase. 

  • Documentation: Landlords must provide detailed records of expenses and notify affected tenants, who can participate in the LTB hearing. 

  • Limitations: An AGI can increase rent by a maximum of 3% above the guideline per year. If a higher increase is justified, it can be spread over subsequent years, each capped at an additional 3%.  

Exceptions to Rent Control: 

  • Certain units are exempt from rent control guidelines, including: 

  • New buildings, additions, or most new basement apartments first occupied for residential purposes after November 15, 2018. In these cases, landlords can set rent increases without adhering to the provincial guideline. 

Tenant Rights: 

  • Challenge AGIs: Tenants can challenge proposed AGIs during LTB hearings. They are entitled to receive all relevant documentation and can present their concerns.  

  • Maintenance and Repairs: Landlords are responsible for maintaining the rental unit in good repair, ensuring compliance with health, safety, housing, and maintenance standards. 

Understanding these guidelines helps both tenants and landlords navigate rent increases within Ontario's regulatory framework.