Renovating a tenanted unit used to be a paperwork exercise: serve the notice, wait out the timeline, start the work. Not anymore. Between the Residential Tenancies Act, Bill 97's tightened rules, and a wave of municipal renoviction licence bylaws now covering Toronto, Hamilton, London, and soon Ottawa, a renovation that requires vacant possession is one of the most regulated things an Ontario landlord can do. Get it wrong and you are looking at Landlord and Tenant Board penalties, municipal fines that can reach $100,000, and a tenant with the right to move back in at their old rent.
Here is what the rules actually require in 2026, city by city, so you can plan a renovation without stepping on a rake.
If a renovation is extensive enough that the unit must be empty, the Residential Tenancies Act requires an N13 notice, the form used to end a tenancy for demolition, conversion, or repairs and renovations so extensive they require a building permit and vacant possession. Three provincial rules matter most:
Bill 97 added teeth to all of this. Landlords now need a report from a licensed engineer or architect confirming the work genuinely requires vacant possession, and there are ongoing written notice obligations around the estimated completion date and when the unit is ready for re-occupancy. The days of a vague "major renovation" claim carrying an N13 through the Board are over.
Toronto's Rental Renovation Licence Bylaw took effect on 2025-07-31, and it stacks a municipal licensing regime on top of the provincial rules. If you serve an N13 for a unit in Toronto, you must apply for a Rental Renovation Licence within seven days of serving the notice. The application costs $700 per unit and requires a valid building permit plus the engineer's or architect's report confirming vacant possession is necessary.
The bylaw also changes the economics. If the tenant intends to return, you must either provide temporary comparable housing for the duration of the work or pay monthly compensation toward the gap between their current rent and market rent, plus a one-time moving allowance. Fines for skipping the licence run up to $100,000 per offence, and the city can add a special penalty if it finds you profited from the violation.
Hamilton's Renovation Licence and Relocation By-law came into force on 2025-01-01 and was the first of its kind in Ontario. The mechanics are similar to Toronto's: apply within seven days of serving an N13, pay $715 per unit, and provide the professional report. Hamilton goes further on relocation. For tenants exercising their right to return, the landlord must make reasonable efforts to arrange comparable temporary housing, and must either hire an insured mover or reimburse moving costs at a flat rate of $1,500 for bachelor and one-bedroom units or $2,500 for units with two or more bedrooms.
London became the third Ontario municipality to approve a renoviction bylaw, and on 2026-07-15 Ottawa city council passed its own version by a 21 to 5 vote, taking effect 2027-01-01. Mississauga, Waterloo, and Kitchener have adopted or are developing measures of their own. If you own rentals in more than one city, and many of our owners do, you can no longer assume the rules that applied to your last renovation apply to your next one. KEILTY manages properties in 26 Ontario cities, and part of the job now is simply tracking which municipal regime applies to which building on our locations list.
Take a two-bedroom unit in Toronto renting at $2,400 that needs a four-month gut renovation. Under the combined rules, your real cost of vacant possession looks something like this: three months' compensation at $7,200, the $700 licence fee, a moving allowance, and if the tenant intends to return, monthly top-up payments toward market rent for the duration of the work. Add four months of vacancy loss at $9,600 and the soft costs of getting it wrong. A renovation you budgeted as a construction project is also a $20,000-plus tenant relations project.
None of this makes renovation a bad idea. Ontario's aging rental stock needs the investment, and a properly renovated unit leases faster and holds better tenants. The point is sequencing. The owners who get burned are the ones who book contractors first and read the rules second. The right order is: professional report, building permit, licence application, N13 with proper compensation, then construction. Our vacancy loss calculator can help you price the downtime honestly before you commit.
This is exactly the kind of work that separates professional management from self-management. A self-managing landlord doing their first N13 has to learn the provincial rules, the municipal bylaw, the compensation timing, and the right-of-first-refusal mechanics in real time, with real money at stake. We have walked through the self-management versus professional management comparison before, and compliance-heavy projects like this are where the gap is widest. At KEILTY's flat rate of $149 plus HST per unit per month, the fee for a year of management is a rounding error next to a single $100,000 bylaw fine, or even next to one botched N13 that gets tossed at the LTB and resets your 120-day clock.
It also pays to think beyond the single project. If a renovation is part of a bigger repositioning, our work with small multi-family owners usually starts with the same question: what does the building rent for after the work, and does that number justify the true all-in cost of getting there?
Serve nothing until you have the engineer's report and the building permit. Check whether your city has a licence bylaw, because in Toronto and Hamilton you have only seven days after serving the N13 to apply. Pay compensation before the termination date, not at move-out. Take the right of first refusal seriously, because tenants and tenant advocacy groups certainly do. And budget the project as if the tenant is coming back at their old rent, because if they exercise their rights, they are.
Planning a renovation on a tenanted property this year? Request a free rental evaluation and we will tell you what the unit should rent for after the work, and what the rules in your city will cost you to get there.
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