Raising rent in Ontario isn’t as simple as just notifying your tenant of a new amount. Landlords must follow strict rules set by the Residential Tenancies Act (RTA) to ensure that rent increases are legal and enforceable. Failure to comply can lead to disputes, tenant refusals, and even legal penalties.

If you're a landlord planning to increase rent, this guide will walk you through when, how much, and how to do it legally while maintaining a positive landlord-tenant relationship.

1. When Can You Increase Rent?

📌 You can increase rent only if:

• It has been at least 12 months since the last rent increase.
• The tenant has lived in the unit for 12 months or more.
• You provide a written 90-day notice before the increase takes effect.

🚨 Exceptions:

• If a unit is vacant, you can set rent at any price for the next tenant.
• If the rental is not covered by rent control, different rules may apply (see below).

For more details, check Ontario’s Rent Increase Guidelines.

2. How Much Can You Increase Rent?

Most rental units in Ontario are rent-controlled, meaning you can only increase rent by a set percentage each year.

✅ 2024 Rent Increase Guideline: 2.5%✅ 2023 Rent Increase Guideline: 2.5%✅ 2022 Rent Increase Guideline: 1.2% (Rent freeze was in effect in 2021)

📌 Units Exempt from Rent Control:

• Properties first occupied for residential purposes on or after November 15, 2018 (e.g., brand-new condos).
• If exempt, landlords can increase rent by any amount, but tenants must still receive 90 days’ notice.

For more, check Ontario’s Rent Control Rules.

3. How to Legally Increase Rent

To raise rent legally, landlords must follow these steps:

📌 Step 1: Complete the Proper Notice Form

• Use Form N1 – Notice of Rent Increase – Available here.
• Fill in the current rent, the new rent, and the effective date.

📌 Step 2: Serve the Tenant With at Least 90 Days’ Notice

• Deliver the notice in person, by mail, or electronically (if agreed in writing).
• Keep a copy for your records in case of disputes.

📌 Step 3: The Tenant Has Two Choices
✅ Accept the increase and continue renting.
❌ Refuse the increase and move out before the new rent takes effect.

🚨 Important: Tenants cannot refuse to pay the increase while staying in the unit unless they challenge it at the Landlord and Tenant Board (LTB).

For more on notice requirements, check Serving Documents in Ontario.

4. Can a Tenant Challenge a Rent Increase?

Yes, tenants can file an application with the Landlord and Tenant Board (LTB) if they believe the rent increase is illegal or unjustified.

📌 Common reasons tenants challenge rent increases:

• The increase is above the allowed guideline.
• The landlord did not provide proper notice.
• The unit is covered by rent control, but the increase is too high.

🚨 If the LTB finds the increase illegal, it may cancel it and order a rent refund.

For more details, check How Tenants Can Dispute Rent Increases.

5. How to Apply for an Above-Guideline Rent Increase (AGI)

In some cases, landlords can apply for an increase higher than the annual guideline if they’ve made eligible improvements.

✅ You can request an AGI if you:

• Have made major capital repairs or renovations (e.g., new roof, heating system, security upgrades).
• Have faced higher-than-normal property taxes or utility costs.

📌 Steps to Apply for an AGI:

1. Complete Form L5 – Application for Above Guideline Increase – Available here.
2. Provide proof of renovations or increased expenses.
3. Submit the application to the LTB for approval.

🚨 Tenants can challenge AGI requests, so keep detailed receipts and invoices for all upgrades.

For more details, check Above Guideline Rent Increases.

6. What If a Tenant Refuses to Pay the New Rent?

If a tenant refuses to pay the increased rent after the effective date, they are technically in arrears and can face eviction.

✅ Steps to take:

1. Issue a Form N4 – Notice to End a Tenancy for Non-Payment of Rent.
2. If rent remains unpaid, file an L1 Application to Evict for Non-Payment.
3. Attend an LTB hearing if the tenant disputes the eviction.

🚨 Caution: If the rent increase was not done legally, the LTB may rule in favor of the tenant.

For eviction procedures, check How to Handle Non-Payment of Rent.

Final Thoughts: Follow the Rules to Avoid Issues

Raising rent is a normal part of being a landlord, but it must be done legally and fairly. Following the proper process ensures you get the increase you’re entitled to without disputes or penalties.

📌 Key Takeaways:

• You can only increase rent once per year with 90 days’ written notice.
• Most units are rent-controlled, so increases must follow the annual guideline.
• Tenants can dispute illegal rent increases at the LTB.
• For major renovations, landlords can apply for an Above-Guideline Increase (AGI).
• If a tenant refuses to pay the legal increase, landlords can begin the eviction process.

🚀 Need help with rent increases or tenant disputes? Contact Carson Frankum for expert landlord advice!