By A.J. Keilty, President, KEILTY Realty Management
Ninety days, in writing, on the Landlord and Tenant Board's approved form. That is sections 116 (1) and 116 (3) of the Residential Tenancies Act, 2006, and it is only the first of three rules. You also need at least 12 months to have passed since the last increase or since the tenant moved in, under section 119 (1), and unless an exception applies the increase cannot exceed the guideline for the year it takes effect, under section 120 (1).
The three rules fail differently, which is worth knowing before you rely on any of them. Get the notice wrong and section 116 (4) makes the increase void. Miss the 12-month rule in section 119 (1) or the guideline ceiling in section 120 (1) and the shape of the problem changes: what you collected above the lawful rent is money collected in contravention of the Act, and section 135 (1) lets a tenant or former tenant apply for an order that it be paid back. Two mistakes are worth naming up front, and neither is the 90 days itself: counting the 90 days from the day you signed the notice rather than the day the tenant is taken to have received it, and using the wrong year's guideline. Either one can cost a full rent period. Here is the whole sequence, the arithmetic, and the routes above the guideline.
Timing, notice and amount. They are separate sections and a notice can fail on any one of them.
One thing the 12-month clock does not do is restart when the building changes hands. Section 119 (1) (a) counts from "the day of the last rent increase for that tenant in that rental unit" and says nothing about who charged it, and section 18 makes covenants concerning things related to a rental unit run with the land. Buy a tenanted building and you inherit the increase dates, not a clean slate. A consented assignment works the same way: section 95 (8) says the tenancy agreement continues to apply on the same terms and conditions, and section 120 (1) caps increases "to a tenant, or to an assignee under section 95". This is the point owners buying a building get wrong most often, and it is why the date of the last increase for every suite belongs on the list of records you ask the seller for.
Note what section 120 (1) actually lists. Four exceptions, not two, and two of them are agreements rather than applications. That matters later.
The form is the N1, Notice of Rent Increase. Its instructions are still dated 2015-11-30, so the worked examples printed in them use the 2015 guideline of 1.6% and 2015 dates. The method is current. The numbers in the examples are not.
The guideline for 2026 is 2.1% and the guideline for 2027 is 1.9%, per Ontario's residential rent increases page, updated 2026-06-23. Do not memorize either figure. Write down the rule instead, because the number changes annually and a post, a template or a spreadsheet that hard-codes it goes wrong quietly.
The rule is in section 120 (2). Paragraph 1 sets the guideline for a calendar year as the percentage change from year to year in the Consumer Price Index for Ontario for prices of goods and services as reported monthly by Statistics Canada, averaged over the 12-month period that ends at the end of May of the previous calendar year, rounded to the first decimal point. Paragraph 2 caps it: the guideline for a calendar year shall be not more than 2.5 per cent. That cap is why 2023, 2024 and 2025 all came in at exactly 2.5% while inflation was running higher.
The year that governs is the year the increase takes effect, not the year you serve the notice. Ontario's own worked example makes the point: a lease signed 2026-06-01 at $1,000 can be increased 12 months later on 2027-06-01, and "The guideline for 2027 is 1.9%." So a notice you serve in September for a January effective date uses next year's figure, and the guideline for next year is published well before you need it. We covered how the 2027 number was arrived at in our post on the 2027 guideline.
Multiply, add, and write the result in dollars and cents. There is no rounding rule, and it is worth saying plainly. Searched on 2026-08-26, the Act prescribes rounding in exactly one place, section 120 (2) paragraph 1, and that is the CPI-derived guideline percentage being rounded to the first decimal point. Nothing in the Act rounds a rent. The N1 instructions ask you to fill in the total amount "in dollars and cents". So do that, to the cent, and do not round up to a tidy figure.
Take a monthly tenancy in Belleville at $1,650, with the increase to take effect on 2027-01-01.
$1,681.35 is the figure that goes in the box on the N1. Rounding it to $1,681 gives away $0.35 a month. Rounding it to $1,682 charges $0.65 a month more than the guideline permits, which is an amount collected in contravention of section 120 (1), and section 135 (1) lets a tenant or former tenant apply for an order that it be paid back. It is a small number attached to a real risk, for no gain.
On the day the tenant is taken to have received the notice, which is not always the day you sent it. Get that wrong by a few days and the increase moves out by at least those few days, and in practice usually by a whole rent period.
Rule 3.9 of the LTB Rules of Procedure is the Board's rule on when a document counts as served, and it is the schedule to work from. A document is considered served on the day it was given to the person when delivered by hand, on the fifth day after mailing, on the date on the fax confirmation receipt when sent by fax, on the day after it was given to a courier or, if that day is a holiday, the next day that is not a holiday, on the day it was sent by email where the person has consented in writing, and on the day it was uploaded into the Tribunals Ontario Portal. Rule 1.1 defines a holiday to include any Saturday or Sunday, so a Friday courier hand-off lands on the Monday. The N1 instructions carry the mail figure independently, telling a landlord serving by mail to allow five days for delivery.
Run the Belleville file both ways, on a notice prepared on 2026-10-01 for a rent that falls due on the first of each month.
No, and this is worth being precise about, because a great deal of landlord guidance says otherwise. Nothing in section 116, section 119 or section 120 ties the effective date of an increase to a rent due date, to the first day of a rental period, or to the end of one. The Act says so expressly where it means it. Section 44 requires a notice of termination to specify a date that "shall be on the last day of a rental period". Section 117 (4) fixes an increase taken without a notice of rent increase, after a landlord has cured an order under paragraph 6 of subsection 30 (1), as effective on "the first day of the rental period following" completion of the work. Neither provision reaches an ordinary noticed increase. So on the two counts above, 2026-12-30 and 2027-01-04 are the earliest lawful effective dates as they stand.
What we do, and what we would suggest to an owner running this themselves, is align increases to the first day of a rent period anyway. A mid-period increase means splitting a single rent period between the old rent and the new one, and the Act supplies no prorating formula for it. That is an administrative choice, not a requirement, and it should be described as one. Make that choice and the arithmetic changes: hand delivery reaches 2027-01-01, mail cannot, and the earliest aligned date on the mailed notice becomes 2027-02-01. Five days of postage has then cost a whole rent period, and section 119 (1) will not let you take a second increase inside the same 12 months to make it up.
The same point has a consequence for the amount, since the effective date decides which year's guideline applies. An increase effective 2026-12-30 is a 2026 increase and takes the 2026 guideline of 2.1%, which on $1,650 is $34.65 and a new rent of $1,684.65. An increase effective 2027-01-01 or later takes the 2027 figure of 1.9% and the $1,681.35 above. Pick the effective date first, then read the guideline for the year that date falls in.
The N1 instructions list the permitted methods, including hand delivery, the mailbox, under the door, fax, courier and mail, and state that you cannot give the tenant the notice by posting it on the door. We set the service rules out method by method in how to serve a notice to a tenant in Ontario.
Section 116 (4) is short and unforgiving: an increase in rent is void if the landlord has not given the notice required by that section, and the landlord must give a new notice before the landlord can take the increase. Read both halves. The increase is void, and the cure is a fresh notice with a fresh 90 days, not a correction to the old one.
Section 118 sits on the other side of the ledger and is easy to over-read. A tenant who does not give notice of termination under section 47 after receiving notice of an intended rent increase under section 116 is deemed to have accepted whatever rent increase would be allowed under the Act after the landlord and the tenant have exercised their rights under the Act. Note the closing words. Section 118 deems the tenant to accept an increase the Act allows. It does not convert an increase the Act does not allow into a lawful one.
No. Section 135.1 (1) says an increase in rent that would otherwise be void under subsection 116 (4) is deemed not to be void if the tenant has paid the increased rent in respect of each rental period for at least 12 consecutive months. It was added by Schedule 4 to the Protecting Tenants and Strengthening Community Housing Act, 2020, in force 2020-07-21.
Read the conditions carefully before relying on it, because there are more of them than the first subsection suggests. The tenant has to have paid the increased amount, in respect of each rental period, for at least 12 consecutive months. A tenant who paid the higher figure for seven months and then stopped, or who paid the old rent in two of the twelve, is outside it. Section 135.1 (2) then takes the deeming away entirely where the tenant has, within one year after the date the increase was first charged, made an application in which the validity of the rent increase is in issue. Where the deeming does apply, section 135.1 (3) says that for greater certainty section 116 is deemed to have been complied with, and section 135.1 (4) says nothing in the section limits the application of section 136. It is a cure for an old defect that nobody raised, not a strategy.
Section 136 runs alongside it and is broader. Subsection 136 (1) deems rent charged one or more years earlier to be lawful rent unless an application has been made within one year after the date that amount was first charged and the lawfulness of the rent charged is in issue in the application. Subsection 136 (2) does the same for an increase. Subsection 136 (3) preserves the tenant's separate right to apply under section 122.
One year from when the amount was first charged, on three different provisions that all land in the same place. Section 136 (1) and (2) deem the rent and the increase lawful after that year. Section 135 (4) says no order shall be made under that section with respect to an application filed more than one year after the person collected or retained money in contravention of the Act or the Tenant Protection Act, 1997. Ontario's guideline page tells tenants the same thing in plain words: if the notice was not proper or the amount was wrong, "you can dispute it at the Landlord and Tenant Board within 12 months after the amount was first charged."
The application is a T1, which sits in the LTB's tenant row on the forms, filing and fees page at "$53 or $48 through the Tribunals Ontario Portal". Read section 135 (1) for who it reaches: a tenant or former tenant may apply for an order that "the landlord, superintendent or agent of the landlord" pay back money collected or retained in contravention of the Act or the Tenant Protection Act, 1997. An agent can be ordered to pay personally, which is a live exposure for anyone managing units for somebody else.
None of that predicts how any particular file would be decided. The point is narrower, and it is the statute doing the work rather than any forecast: an increase that has run for more than a year with no application putting its lawfulness in issue is deemed lawful by section 136 (2). A defect you find in your own file inside that year is one you can still fix cheaply.
Yes, by four routes, and section 120 (1) names all of them: an order under section 126, an order under section 127, or an agreement under section 121 or section 123. Two are applications to the Board and two are agreements with the tenant. The agreements need no filing fee and no hearing, which is the whole of the difference.
Section 121 (1) lets a landlord and tenant agree to increase the rent above the guideline where the landlord has carried out or undertakes to carry out a specified capital expenditure in exchange for the increase, or has provided or undertakes to provide a new or additional service in exchange for it. The form is the N10, Agreement to Increase the Rent Above the Guideline.
The limits are real and they are all in the same section:
The cost is the undertaking. Section 122 (1) lets a tenant or former tenant apply for relief where the landlord failed in whole or in part to carry out an undertaking under the agreement, or the agreement was based on work or services the landlord claimed but did not do or provide. Section 122 (2) gives them two years from the date the increase becomes effective, which is twice the one-year window under section 136, and section 136 (3) expressly preserves it. Section 122 (3) lets the Board find some or all of the above-guideline portion invalid from the day it took effect and order a rebate. Section 124 adds that an agreement under section 121 or 123 is void if entered into as a result of coercion or a false, incomplete or misleading representation by the landlord or the landlord's agent.
So the agreement route is fast and cheap, and it is enforceable against you for two years. Do the work you promised, on the schedule you promised, and keep the invoices.
Yes, and this is the one increase that is not tied to the 12-month clock at all. Section 123 (1) lets a landlord increase the rent charged as prescribed at any time if the landlord and the tenant agree that the landlord will add a parking space, or a prescribed service, facility, privilege, accommodation or thing, with respect to the tenant's occupancy. Section 123 (2) says that applies despite sections 116 and 119, and despite any order under paragraph 6 of subsection 30 (1). So no N1, no 90 days, no waiting for the anniversary.
The amount is not open, and it is not a percentage either. Section 123 (1) says "as prescribed", and the prescription is subsection 16 (2) of O. Reg. 516/06: on an agreement under subsection 123 (1) or section 125, the maximum increase, for anything other than floor space, is "the actual cost to the landlord" of the thing agreed to, or where the actual cost cannot be established or there is no cost, a reasonable amount based on its value. Floor space runs on proportionality instead, under subsections 16 (3) and (4). So the figure is your documented cost rather than a number you and the tenant land on. Subsection 16 (1) also sets out the twelve things that qualify as prescribed under paragraph 2 of section 123 (1), among them cable and satellite television, an air conditioner, extra electricity for an air conditioner or an in-suite washer or dryer, block heater plug-ins, lockers or other storage space, heat, electricity, and water or sewage services excluding capital work. A parking space does not need to be prescribed at all, because paragraph 1 of section 123 (1) names it directly.
Now the part a reader is most likely to get wrong, because this post sets section 123 beside section 121. The safeguards do not carry across. Section 123 has two subsections and neither creates a cancellation right, a waiting period or a form requirement, so there is no five-day cancellation as under section 121 (4), no six-day delay as under section 121 (5), and no approved form as under section 121 (2). Section 122 is limited on its face to an agreement "under section 121", so the two-year tenant application does not reach a section 123 agreement either. The one protection that does span both is section 124, which voids an agreement under section 121 or 123 entered into as a result of coercion or a false, incomplete or misleading representation. Do not assume a section 121 rule applies to a section 123 increase in either direction.
One further limit is practical rather than statutory. The section is drafted around the landlord agreeing to "add" the parking space or service, so a charge for something the tenant already had is not what it authorizes. Section 119 (2) then deems a section 123 increase not to be an increase for the purposes of the 12-month rule, which is what lets your ordinary guideline increase go ahead on schedule regardless. The obligation also runs both ways: section 125 requires a landlord to decrease the rent charged as prescribed if the landlord and the tenant agree that the landlord will cease to provide anything referred to in section 123 (1), and subsection 16 (2) of the regulation sets the minimum decrease by the same actual-cost measure. Take the parking space away and the rent has to come down.
Section 126 (1) allows an application on three grounds and only three: an extraordinary increase in the cost for municipal taxes and charges, eligible capital expenditures incurred respecting the complex or one or more of its units, and operating costs related to security services provided by persons not employed by the landlord. Utilities are conspicuously absent. Extraordinary utility costs used to be a ground and were removed by the Rental Fairness Act, 2017, with section 128 surviving only as a transitional rule for orders made on applications filed before that change.
Two deadlines decide whether the application is available at all, and together they are the whole planning problem on an above-guideline increase. Section 126 (3) requires the application to be made at least 90 days before the effective date of the first intended rent increase referred to in it. Separately, subsection 26 (2) of O. Reg. 516/06 provides that a rent increase "shall not be ordered in respect of a capital expenditure unless the work was completed during the 18-month period ending 90 days before the effective date of the first intended rent increase referred to in the application." Note that the 18-month window is in the regulation rather than the Act, and that it ends 90 days before the effective date rather than on it. Read the two together and the sequence runs backwards from the effective date you want, not forwards from the invoice date. An owner who serves the N1 first and files the application afterwards has often already lost the window.
There is also a rule about what you may collect while you wait, and it is the one that keeps owners from having to hand money back. Section 126 (5) says that if an application is made under the section and the landlord has given a notice of rent increase as required, then until an order authorizing the increase for the unit takes effect, the landlord shall not require the tenant to pay a rent exceeding the lesser of the new rent specified in the notice and the greatest amount the landlord could charge without applying for an increase. So you serve the N1 for the full amount applied for, and you collect the guideline amount until the order lands. Collecting the noticed figure from the effective date is requiring a rent you were not entitled to require.
Maintenance can also stop an application on its own, whatever the arithmetic says. Subsection 126 (12) sets out findings the Board may make about uncompleted work orders and serious breaches, and where subsection 126 (13) applies the Board shall either dismiss the application with respect to the rental unit, or provide in its order that the rent charged for that unit shall not be increased pursuant to the order until the Board is satisfied, on a motion by the landlord within the time it specifies and on notice to the tenant, that the outstanding items have been completed. An open work order is therefore a live risk to an application you have already paid to file.
The form is the L5, and the fee on the LTB table is $233 for the first ten units plus $10 for each additional unit to a maximum of $1,000. The Board's Interpretation Guideline 14, dated 2018-02-07, sets out how it approaches these. It states that the maximum annual increase allowed in an application based on capital expenditures or security services or both is 3% above the guideline, and that where more than 3% is justified the rent is increased by 3% in the first year with any remaining increase taken in subsequent years, to a maximum of two additional years at 3% each year. That ceiling is section 126 (11) in the Act.
One more thing about that 3%, because Guideline 14 draws the line and it is easy to miss: the 3% limitation does not apply where the application is based on an increase in the cost of municipal taxes and charges, and where an increase is justified on that ground the landlord may take the entire increase in the first year.
The same Guideline carries a use-it-or-lose-it warning: "Where a landlord does not take an increase in the 12-month time period for which it is ordered, the landlord may not take the increase at a later date and the right to take that increase is lost." An order you win and then forget to act on is an order you have thrown away. And Guideline 14 says plainly that to collect the above-guideline increase the Board approves, the landlord must first have given the tenant a notice of rent increase indicating that higher amount, which is section 116 (2) in practice.
Guidelines are not law, and every one of them says so on its face: a Member is not required to follow a Guideline and may make a different decision depending on the facts of the case.
Compare the two routes honestly. A section 121 agreement needs a signed N10, the work, and six days. An L5 needs a filing fee, an evidentiary package, a hearing, and, on capital expenditures or security services, a 3% annual ceiling with carry-forward. On a single capital item that one tenant benefits from directly, the agreement route requires no filing fee, no hearing and no evidentiary package. On a building-wide roof or boiler across forty suites, the application is the only route that reaches everyone.
It does, and it is easy to miss because nothing prompts you. Section 106 (3) says that if the lawful rent increases after a tenant has paid a rent deposit, the landlord may require the tenant to pay an additional amount to increase the deposit up to the amount permitted by section 106 (2), which is the lesser of the rent for one rent period and the rent for one month.
On the Belleville file, the deposit was $1,650 and the new lawful rent is $1,681.35, so the top-up you may require is $31.35. That is small on one suite and it compounds across a building and across years, because every increase you take without topping up widens the gap permanently.
Deposit interest moves with it too. Section 106 (6) requires interest to be paid to the tenant annually on the rent deposit at a rate equal to the guideline determined under section 120 that is in effect at the time payment becomes due, so it is the same guideline doing two jobs. Section 106 (7) then lets you deduct the shortfall between the section 106 (2) maximum and the deposit actually paid from the interest owing, and deems the deducted amount to form part of the deposit. We went through that mechanism in do you have to pay interest on a last month's rent deposit in Ontario.
One warning on the same section. Section 106 (1) permits requiring a rent deposit only on or before entering into the tenancy agreement. A top-up under section 106 (3) increases a deposit the tenant already paid. It is not a route to a first deposit from a sitting tenant who never paid one, and asking for that is a payment the Act does not permit.
Read the exemption for what it says, because it is a list of sections rather than a general escape. Section 6.1 (2) provides that sections 120, 121, 122, 126, 127, 129, 131, 132, 133, 165 and 167 do not apply where the rental unit is in a building, mobile home park or land lease community no part of which was occupied for residential purposes on or before 2018-11-15, or is entirely within an addition to one, no part of which was so occupied. Section 6.1 (3) carries a similar exemption over a shorter list, sections 120, 121, 122, 126, 127, 129, 131, 132 and 133, for a new self-contained unit created after that date in a detached, semi-detached or row house which, on or at any time before 2018-11-15, contained not more than two residential units, subject to four requirements including the owner living in another unit in the house or the unit having been unfinished space. Section 6.1 (4) then withholds either exemption from a unit subject to a tenancy whose agreement was entered into on or before 2018-11-15, and section 6.1 (5) confines that carve-out to that tenancy rather than to any later one. Section 6.1 (6) puts the onus on the landlord to prove the exemption applies.
Now look at what is not in either list. Section 116 is not in it, and section 119 is not in it. So a rent-control-exempt unit still requires 90 days written notice on an approved form, and still requires 12 months to have passed since the last increase. What the exemption removes is the ceiling and the machinery that hangs off it, not the timing and not the notice. The Board publishes a separate form for exactly this case, the N2, Notice of Rent Increase (Unit Partially Exempt), which states on its face that the landlord must give the tenant the notice at least 90 days before the date of the rent increase.
The machinery going with it cuts both ways, and owners are sometimes surprised by which parts they lose. Sections 121 and 122 are in both lists, so the N10 agreement route is not available on an exempt unit. Sections 126 and 127 are in both lists too, so there is no L5 either. That is coherent rather than harsh: there is nothing to apply for above a ceiling that does not exist.
Two other regimes have their own answer and neither is covered above. Section 7 (1) removes a long list of sections, including the rent rules, for social housing units of the kinds it describes, and Ontario's guideline page says social housing "has different rules regarding rent control and rent increase notices", so do not read this post across to a unit in a designated housing project. And in care homes, that same page says the guideline applies to the rent portion of the bill but not to the cost of services like nursing, food or cleaning. Mobile homes and land lease communities are inside the guideline, per the same page, subject to section 6.1.
Whatever you agree. Section 113 says that subject to section 111, the lawful rent for the first rental period for a new tenant under a new tenancy agreement is the rent first charged to the tenant. Ontario's guideline page says the same thing from the other direction, listing "rental units upon turnover of a tenancy" among the situations the guideline does not apply to.
Section 111 (1) is the outer limit: no landlord shall charge rent in an amount greater than the lawful rent permitted under Part VII. And section 111 (2) preserves one discount without resetting anything: the lawful rent is not affected by a discount in rent at the beginning of, or during, a tenancy of up to 2 per cent of the rent that could otherwise be lawfully charged for a rental period, if the discount is provided for paying rent on or before the date it is due and it meets the prescribed conditions. That is the provision behind a prompt-payment discount done properly.
There is one order that takes that turnover freedom away, and it is worth knowing before you price a vacancy. Paragraph 6 of subsection 30 (1) lets the Board, where it has found that a landlord breached its maintenance obligations, prohibit the landlord from charging a new tenant under a new tenancy agreement "an amount of rent in excess of the last lawful rent charged to the former tenant of the rental unit", until the landlord has completed the work orders and the ordered repairs the Board identified as related to a serious breach. While such an order is in effect, section 113 does not give you a free hand on that unit. Section 117 is the way back out: subsections 117 (1) and (3) let a landlord who has completed those items charge what it could have charged in the absence of the order without giving a new notice of rent increase, and subsection 117 (4) makes that effective on the first day of the rental period following completion.
None of this is in the Act. It is scheduling.
On one or two units, an organized owner can run rent increases from a calendar and a spreadsheet. The Act is public, the form is free, and the arithmetic is a single multiplication. What breaks is scale and attention. Ninety days plus five for mail, twelve months per tenancy, a guideline that changes every January, a deposit top-up that nobody remembers, and a notice that has to be served correctly on a day when you are somewhere else, repeated across every suite in a building, is a scheduling problem rather than a legal one.
That is the work KEILTY does on a rent roll: take the increase on time, on the right form, with the right number, and keep a record that survives a challenge. If you own a handful of suites and the calendar is getting away from you, our small multi-family page sets out how we handle it.
Not sure whether your current rents are where they should be, or whether the last increase was taken properly? Get a free rental evaluation and we will look at both.
This post is general information about Ontario residential tenancy law as of 2026-08-27, not legal advice. Legislation, regulations and tribunal practice change. For advice on a specific property or situation, speak with a lawyer or licensed paralegal.
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