In Ontario, and under the Residential Tenancies Act, your Landlord is allowed to give you one rent increase every 12 month period, with a notice period of 90 days.

This means:

1. Your Landlord can only increase your rent every 12 months, or 12 months from the start of your tenancy if it is your first increase.

2. You must be given at least 90 days notice. If the notice was served with less than 90 days, the notice is invalid.

Something important to keep in mind is rent control:

• Generally speaking, if your unit was constructed and occupied before November 15, 2018, then your unit is rent controlled. This means that your rent can only increase by a certain guideline amount every year. This guideline amount for 2025 is 2.5%. Which of course means that your rent can only increase by 2.5% if your unit is rent controlled. You can find more information here: https://www.ontario.ca/page/residential-rent-increases

• If your unit is not rent controlled, the amount may be increased by any amount, no matter how much. However, the rent can still only be increased every 12 months, and with a minimum of 90 days notice.

If your unit is rent controlled, your Landlord can apply for an 'above the guideline increase' (AGI).

A landlord may make an AGI application in any of the following situations:

1. There has been an extraordinary increase in the cost for municipal taxes and charges for the residential complex or any building in which the rental units are located. See RTA s. 2(1), s.126(1).1, s.126(2) and O.Reg 516/06, s.28, s.29 and s. 41;

2. The landlord has eligible capital expenses (extraordinary or significant renovation, repair, replacement or new addition the expected benefit of which extends for at least five years) for the residential complex or one or more of the rental units in it. Tenants who began their tenancy after the capital expenditure was completed cannot be included in this application. See RTA s.126(1).2,126(7),126(8),126(9) and O.Reg 516/06, s.18, s.26-28;

3. The landlord has experienced operating costs related to security services provided in respect of the residential complex or any building in which the rental units are located by persons not employed by the landlord for the first time or the costs have increased. See RTA s.126(1).3 and O.Reg 516/06, s. 30.

3% Limitation

The maximum annual increase allowed in an application based on capital expenditures or security services or both is 3% above the guideline. Where more than 3% is justified, the rent is increased by 3% in the first year and any remaining increase may be taken in subsequent years, to a maximum of two additional years at 3% each year.

The 3% limitation does not apply where the application is based on an increase in the cost of municipal taxes and charges. Where an increase is justified by these categories, the landlord may take the entire increase in the first year.

The Landlord must apply to the Landlord and Tenant Board and be approved to have this AGI increased. 

When a landlord can ask vs. When you have to pay

Landlords must be approved by the LTB for AGI in order to legally raise your rent, they cannot force you to pay for an AGI without an order from the LTB.

An interesting element of the law around these increases is that landlords can ask for the money after they have applied to the LTB but before the increase has been approved.  There’s often a gap of several months in between applying and the hearing.

Additionally, if the landlord asks for the increase but it hasn’t been approved yet, the tenant doesn’t have to pay the “Above Guideline” portion (only the guideline amount).

The only issue with not paying is that if and when the increase is approved, the LTB could award back rent to your landlord for the period they asked but did not get the AGI. 

Some tenants prefer to pay for the AGI and see if they get money back after the increase has been approved. Other tenants prefer to not give the landlord a cent until it’s legally owed. Ultimately the choice will be up to the tenant to decide when to pay or not.

For the AGI, there will be a hearing involved. 

It is very important that you, or a representative attend the hearing. If you can't afford representation, please seek free legal advice from a clinic or organization such as ours, or use this website to find a local legal clinic: http://www.legalaid.on.ca/legal-clinics/ 

Tenant Duty Counsel is another good option for legal advice, or representation: https://www.acto.ca/for-tenants/tenant-duty-counsel/ 

If you are in need of assistance, please consider contact an organization such as Georgina Tenants' Association for a free legal consultation.