Rental Increases Laws Ontario: Legal Rental Increases Rules

Ontario rental increases: who’s covered, what the law caps, and 2025 numbers

In Ontario, rental increases are governed by the Residential Tenancies Act (RTA) and administered in practice by the Landlord and Tenant Board (LTB). For most rent-controlled units, landlords must follow two timing rules before raising rent: at least 12 months must pass since the last lawful increase (or since move-in), and tenants must receive a 90-day written notice on the proper LTB form. These rules help tenants plan and give clear grounds to challenge improper rent changes.

Ontario sets an annual guideline that caps standard rental increases for covered units. For 2025, the province set the rent increase guideline at 2.5%. For guideline increases, an LTB order is not required; the landlord must serve a valid notice correctly and on time. You can always confirm current rules on the province’s official page for Residential rent increases.

Landlords must use the prescribed forms. For rent-controlled units, the correct notice is Form N1: Notice of Rent Increase. The official N1 Instructions explain the 12-month rule, the 90-day notice requirement, and when different notices (like N2 for partially exempt units) apply. If the notice is missing required details or timing is wrong, the increase can be invalid and you can continue paying the current lawful rent.

Some rentals are exempt from the guideline cap—for example, many units first occupied for residential purposes on or after November 15, 2018. Even where the percentage cap doesn’t apply, the timing and notice rules (12 months and 90 days) still do, and the landlord must still use the proper LTB notice for rental increases. Tenants in exempt units should carefully verify the notice date, effective date, and method of service.

At a glance — rental increases you can expect in 2025

• Confirm whether your unit is rent-controlled or exempt before reacting to rental increases.
• Check that 12 months have passed and that the effective date is at least 90 days after proper service.
• Verify that the correct notice was used: guideline increases usually require the N1 form.

How often and how much: calculating lawful rental increases (with examples)

For most Ontario tenants, rental increases can occur no more than once every 12 months, and your landlord must give you at least 90 days’ written notice on the prescribed form before the new rent takes effect. The proper form for guideline increases is the N1: Notice of Rent Increase, which clearly states the 12-month rule and the 90-day notice requirement. If either timing rule is missed, the notice can be invalid.

Ontario also sets an annual guideline that caps standard rental increases for covered units. For increases taking effect in 2025, the guideline is 2.5%. That means a landlord may raise rent by up to 2.5% without applying to the LTB, as long as the 12-month and 90-day rules and the correct notice are respected. You can confirm the current year’s guideline and who it applies to on the province’s Residential rent increases page.

To double-check the math on an N1, multiply your current lawful rent by the guideline percentage and add the result. Example: at $2,000/month and a 2.5% guideline, $2,000 × 0.025 = $50; your new rent after a valid notice would be $2,050. The N1 Instructions outline the calculation and service details step-by-step.

Important: Landlords cannot “backdate” missed guideline rental increases. If they skipped an eligible year, they generally cannot stack or retroactively collect it later. The remedy is to serve a valid N1 for a future effective date—never to charge you for past months at a higher rate.

• Confirm 12 months have passed since you moved in or since the last lawful increase.
• Confirm you received an N1 with an effective date at least 90 days after service.
• Recalculate the proposed rent using the 2.5% (2025) guideline if your unit is rent-controlled.
• If the figure exceeds the guideline, ask whether an Above Guideline Increase (AGI) was filed; until an order issues, you can usually pay only the guideline amount.
• Keep the N1 Instructions handy to verify every required field and service method.

If you want help auditing the math or disputing an invalid notice, YLAW’s Landlord & Tenant paralegal services in Toronto can review your documents, recalculate any proposed rental increases, and prepare a written response or hearing strategy. For AGI-specific questions, see our guide to Rent Increase Above Guideline in Ontario.

Valid service of rental increases: N1/N2 delivery methods, proof, and email rules

Even a correctly calculated notice can be invalid if it is not served properly. In Ontario, rental increases must be delivered using approved methods and with the correct lead time. The official guidance appears in the N1 Instructions and the LTB brochure on How to Serve Documents. If service is wrong, the increase date does not take effect and you can continue paying the current lawful rent until a valid notice is served.

Accepted service methods for rental increases (N1 and N2)

• Hand the notice directly to the tenant or an adult in the unit.
• Leave it in the tenant’s mailbox or where mail is ordinarily delivered.
• Place it under the unit door or through a mail slot.
• Send by fax to a home or business fax number.
• Send by courier or by regular mail (timing rules apply).

These methods are set out in the N1 Instructions and also appear in the N2 Instructions for partially exempt units. Remember: rental increases still require 90 days’ written notice and at least 12 months between increases.

Important: Posting a rent notice on the door is not a permitted method for N1 or N2. The LTB’s Certificate of Service form notes that only a notice of entry may be “posted to the door,” unless the Board orders otherwise.

See the one-page Certificate of Service for the official reminder and list of acceptable methods.

Email and portal delivery require written consent

Service by email or via the Tribunals Ontario Portal is only allowed if the other party agreed in writing to receive documents that way. The LTB’s service brochure explains that consent can be given in the standard lease or by signing a consent form. Without written consent, email alone is not sufficient for rental increases. Review the brochure: How to Serve a Landlord or Tenant with Documents.

Proof of service you can request from your landlord

• A completed Certificate of Service showing the method and date of service.
• Mailing or courier receipts and, if applicable, the envelope with postmark.
• Fax confirmation page (if fax was used).
• Written consent to email or portal service, if they claim to have served electronically.

If the landlord later files an application about non-payment at the new rate, they will typically have to produce the service details. If they cannot, the Board may find the increase invalid. Keep your own records and compare them against the N1 Instructions.

What to do if service seems invalid

• Write to your landlord, ask for the service method, date, and supporting proof.
• Continue paying the lawful rent on time while you seek clarification.
• If they insist, reply with links to the N1 Instructions and the LTB service brochure, noting the permitted delivery methods.
• Get help from a licensed paralegal if the landlord will not correct the notice.

Book Your Free 15-Minute Action Call Now

Don’t let a bad notice force you to overpay. Speak directly with a YLAW paralegal and get clear, actionable next steps on rental increases and service rules.

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Need immediate help reviewing your notice? Start here: Landlord & Tenant Paralegal Services or contact YLAW.

Above-Guideline rental increases (AGIs): when they apply, limits, and what to pay during the process

An Above-Guideline Increase (AGI) is a landlord’s request to raise rent by more than the annual guideline. Under Ontario’s Residential Tenancies Act, a landlord must apply to the Landlord and Tenant Board (LTB) using Form L5 and obtain an order before they can legally charge above the guideline. The LTB’s overview explains when AGIs are permitted and what evidence a landlord must provide; start with Information about Applications for a Rent Increase Above the Guideline and the detailed Interpretation Guideline 14.

Grounds the LTB recognizes for AGIs

• Capital expenditures: significant repairs, replacements, or new additions whose benefits last at least five years (e.g., roof, boiler, windows).
• Extraordinary increases in municipal taxes or charges: unusually large tax/charge hikes affecting the complex.
• Security services: new or increased costs for third-party security services.

For capital expenditures and security services, the LTB generally limits approved AGIs to 3% above the guideline per year. If more than 3% is justified, the remainder may be phased in over up to two additional 12-month periods (maximum 3% each year). By contrast, AGIs based on extraordinary municipal taxes/charges are not subject to the 3% cap. See the limits and examples in Guideline 14.

What tenants must pay while an AGI is pending

If your landlord serves an N1 showing an amount above the guideline and files an L5, you can continue paying only the lawful amount without an order (typically the guideline amount, if your unit is rent-controlled) until the LTB issues its decision. If the Board later approves an AGI, you may owe the difference retroactive to the effective date on the notice; if the decision is issued three or more months after that date, the Board can allow repayment in monthly installments (up to 12 months). These rules are outlined in the LTB’s AGI information page and Guideline 14.

How to respond to an AGI (tenant checklist)

• Ask for proof: request the L5 application number and access to the evidence (invoices, contracts, tax notices). Landlords must make materials available to affected tenants.
• Verify timing: ensure at least 12 months since your last increase (or move-in) and a full 90 days’ notice were respected; the proper N1 form is still required for the notice itself.
• Pay the lawful amount: while the case is pending, continue paying the guideline amount on time and keep all receipts.
• Prepare your response: gather maintenance concerns, photos, and work orders; serious maintenance breaches can affect AGI outcomes. Review the LTB’s process pages and hearing info.
• Get help: for strategy and representation, see YLAW’s guide to Rent Increase Above Guideline in Ontario and our LTB Hearing Process article.

If your unit is partially exempt from rent control (often newer units), remember that the percentage cap may not apply, but the 12-month and 90-day rules and proper notice still do. Use the province’s page on Residential rent increases to confirm which rules apply to your unit before agreeing to any above-guideline rental increases.

Already paying too much? Recovering unlawful rental increases and your next steps

If you suspect an unlawful increase (wrong form, wrong timing, wrong amount, or no proper service), you can apply to the Landlord and Tenant Board for a rebate using Form T1. Tenants generally have one year from the date the illegal rent was first paid to file. Gather a paper trail: the notice you received (or didn’t receive), envelopes with postmarks, payment history, bank statements, and any emails or texts. CLEO’s guide on rent increases explains the timeline and evidence tenants should prepare.

• Keep paying the lawful amount (usually the current legal rent or the guideline amount) on time while you dispute.
• Ask your landlord to provide proof of service (method, date, address) and a completed Certificate of Service.
• If an Above-Guideline Increase is alleged, you can usually pay only the guideline portion until an order is issued; review the LTB’s Interpretation Guideline 14.
• Confirm the current-year guideline and rules on Ontario’s Residential rent increases page.

Book Your Free 15-Minute Action Call Now

Don’t let confusing rental increases force you to overpay. Speak directly with a YLAW paralegal and get clear, actionable next steps in 15 minutes.

👉 Call us now at 1-437-995-9529 to book your free call.
Want help right away? See our Landlord & Tenant Paralegal Services, our primer on Rent Increase Above Guideline in Ontario, and the LTB Hearing Process. Or reach out via our Toronto paralegal services page or contact form.