Illegal Rent Increases

What the Law Says

RTA s.116 establishes the strict requirements for lawful rent increases in Ontario. This is one of the most frequently violated sections because landlords often ignore the rules.

RTA s.116(1): "A landlord shall not give a notice of rent increase unless the previous notice of rent increase under this section was given at least 12 months before the notice of the proposed rent increase."

RTA s.116(3): "A landlord shall give notice of a rent increase in the form and manner prescribed, at least 90 days before the effective date of the rent increase, and the notice shall contain the information prescribed."

The Guideline: The Ontario government sets a maximum yearly increase. For 2025, it is 2.5%. Any increase above this is illegal unless the landlord obtained LTB approval for an "above-guideline increase."

Legal vs Illegal Rent Increases

Legal Rent Increase Checklist

A rent increase is legal ONLY if ALL of the following are true:

1. Proper Form: Notice is on the official N1 form (prescribed form under RTA)
2. 12 Months Passed: At least 12 months have passed since the last rent increase or start of tenancy
3. 90 Days' Notice: You received the notice at least 90 days before the increase takes effect
4. Within Guideline: The percentage increase does not exceed 2.5% (2025 guideline)
5. Proper Delivery: Notice was delivered in a legally acceptable manner (hand delivery, mail, email)

Common Illegal Scenarios

• Not on N1 form: Landlord sends a letter, text, email, or handwritten notice instead of the N1
• Insufficient notice: Only 30, 45, or 60 days given instead of 90
• Less than 12 months: Landlord raised rent 6 months ago and is trying again now
• Above guideline: Increase is 4%, 5%, or 10% without LTB approval
• Mid-lease: Landlord tries to increase rent before lease term expires
• Multiple increases in one year:Landlord serves two N1 notices in the same 12-month period

The Rent Guideline Explained

What is the Guideline?

The rent guideline is the maximum percentage by which a landlord can increase rent without seeking special approval from the LTB. It is set annually by the Ontario government based on inflation and published each year.

2025 Guideline: 2.5%

For 2025, the guideline is 2.5%. This means:

• If you pay $1,200/month, a 2.5% increase = $1,230/month (increase of $30)
• If you pay $2,000/month, a 2.5% increase = $2,050/month (increase of $50)
• Any increase above 2.5% (e.g., 3%, 4%) is illegal without LTB approval

Historical Guidelines

For reference, recent guidelines have been:

• 2024: 2.5%
• 2023: 2.5%
• 2022: 1.2%
• 2021: 0% (frozen)
• 2020: 2.2%

Where to Find the Current Guideline

The guideline is published by the Ontario government:

• Check Ontario.ca/housing for the current year's guideline
• It is published January 1 of each year
• Look for "Rent Increase Guideline" or "Rent Increase Percentage"

Above Guideline Increases (AGI)

What is an AGI?

An AGI is a rent increase above the guideline. Landlords can apply to the LTB for approval to charge more than the guideline, but this is rare and difficult.

When Can Landlords Request an AGI?

Under RTA s.126, a landlord can apply for an AGI to recover costs of:

• Property taxes
• Water and sewer charges
• Major repairs or capital expenditures (e.g., replacing the roof, new furnace)

What Landlords Must Prove

The landlord must prove:

• The expense was necessary
• It was not deferred maintenance
• The cost is reasonable
• The increase is calculated correctly under RTA s.126

Your Rights at an AGI Hearing

You can attend and argue:

• The work was unnecessary
• It was normal maintenance, not capital work
• The landlord failed to maintain the property
• The cost is inflated or unreasonable
• The calculation is wrong

If Landlord Increases Without AGI Approval

If a landlord charges more than the guideline without getting LTB approval first, this is illegal. You can file a T1 to challenge it.

How to Challenge an Illegal Increase

Step 1: Verify the Notice is Invalid

Check your notice against the legal requirements:

• Is it on the official N1 form?
• Did you receive it 90+ days before the effective date? (Count from the date you received it, not when landlord sent it)
• Has 12+ months passed since your last increase or the start of your tenancy?
• Is the increase amount within the guideline?

Step 2: Send a Letter Refusing the Increase

Write to your landlord:

• State that the notice is invalid (specify why)
• State you will not pay the increased amount
• Keep a copy for your records
• Send by email or certified mail

Step 3: File a T1 Application (Optional but Recommended)

You can file a T1 at the LTB to formally challenge the increase. This prevents the landlord from later claiming you owed the extra rent.

Step 4: Withhold the Disputed Amount

If the increase is illegal, you have a strong argument to withhold the extra rent in escrow (set aside in a separate account, not paid to landlord). Consult a legal clinic before doing this.

Do NOT Pay the Illegal Amount

Your Rights

If a rent increase notice is invalid, you have the right to refuse to pay the increased amount. Paying the increased rent can waive your right to challenge it later.

What You Should Do

1. Pay your original rent amount (what you paid before the notice)
2. Do not pay the additional amount
3. Keep records showing what you paid and why
4. File a T1 application within a reasonable time

If Landlord Threatens Eviction

If the landlord threatens to evict you for non-payment because you refused an illegal increase:

• This is likely retaliation under RTA s.29 (protecting tenants who exercise their rights)
• Keep all communications showing the landlord's threats
• File a T1 and T2 (for retaliation) at the LTB
• Contact a legal clinic for help

Risk of Paying (and How to Minimize It)

Risk: If you pay the illegal amount, you may be seen as accepting it, which weakens your challenge later.

Mitigation: If you must pay (e.g., to avoid eviction while your T1 is pending), include a letter with your payment stating: "Payment made under protest. I dispute the legality of the rent increase notice dated [date] for the reasons stated in my T1 application filed [date]."

Filing T1 Application

What is a T1?

A T1 (Tenant Application for a Determination of Rent) is filed at the LTB to:

• Challenge a rent increase notice as invalid
• Seek a ruling that the increase is illegal
• Recover any overpaid rent

How to File

1. Download the T1 form from Ontario.ca/ltb (or request a paper copy)
2. Fill out the form with:
   • Your name and address
   • Landlord's name and address
   • Date you received the N1 notice
   • Effective date of the increase (the date the higher rent is supposed to start)
   • Reason the increase is illegal (e.g., "No N1 form provided," "Only 60 days' notice," "Increase 3.5%, exceeds 2.5% guideline," etc.)
   • Copies of your rent increase notice
3. File with the LTB (online at Ontario.ca/ltb or by mail). Pay the filing fee (currently around $45.50 for tenants, free if in financial hardship).
4. Serve a copy to your landlord by email, mail, or hand delivery

Timeline

• File quickly: File as soon as you get an invalid notice to give the LTB time to rule before the increase takes effect
• LTB will schedule hearing: Usually within 2-6 weeks
• Decision: LTB will issue a decision voiding the increase or confirming its validity

At the Hearing

Bring:

• Original notice (N1 or the notice you received)
• Evidence of when you received it (email confirmation, mail receipt, photo with date stamp)
• Proof of your rent (lease, bank statements, receipts)
• Any communications with landlord about the increase
• Evidence of previous increases (if applicable)

Be prepared to explain which rule(s) the landlord violated. You do not need a lawyer, but it helps.

Rent Increase Exemptions

Units Built After November 15, 2018

If your unit was built or first occupied after November 15, 2018, rent increase guidelines do NOT apply. Your landlord can raise rent as much as they want (with 90 days' notice).

Check your lease or ask: When was the building completed? When did you first move in? If it's after Nov 15, 2018, you have limited protections on rent increases (though you still have other protections like maintenance, privacy, etc.).

Subsidized Housing

Social housing and rent-geared-to-income housing have different rules. Check your lease or contact your housing provider.

Your Recourse for New Units

If you live in a post-Nov 2018 unit and face an unreasonable increase:

• You still have the right to proper 90 days' notice
• You can still refuse unreasonable increases and move
• Contact a legal clinic to discuss your specific situation for other protections (e.g., if the increase is retaliatory)

Key Statutes

• RTA s.116: Rent increase notice requirements, 12-month rule, 90-day rule, guideline limit
• RTA s.126: Above-guideline increase (AGI) applications
• RTA s.29: Protection from retaliation for refusing illegal increases
• O. Reg 516/06, s.2: Defines prescribed form (N1)