Rent Increase Clause: Rules, Notice Requirements & Your Rights
A rent increase clause outlines when and how your landlord can raise your rent. In Ontario, rent increases are governed by the Residential Tenancies Act — and many landlords include clauses that overstep these legal limits.
How Rent Increases Work in Ontario
In Ontario, landlords cannot raise your rent whenever they want. The Residential Tenancies Act, 2006 (RTA) sets strict rules:
Each year, the Ontario government sets a Rent Increase Guideline — the maximum percentage a landlord can increase rent for most tenants. For 2025, the guideline is 2.5%. For 2024, it was 2.5%. These numbers are tied to the Ontario Consumer Price Index (CPI) and are announced each August for the following year.
If a landlord wants to increase rent above the guideline, they must apply to the Landlord and Tenant Board (LTB) for an "above-guideline increase" (AGI). AGIs are only granted for specific reasons — extraordinary increases in operating costs, capital expenditures, or security services.
Your Legal Rights
- Your landlord must give you at least 90 days written notice before any rent increase takes effect.
- Rent can only be increased once every 12 months, regardless of what the lease says.
- The increase must comply with the provincial Rent Increase Guideline unless a rent exemption applies.
- New builds occupied for the first time after November 15, 2018 are currently exempt from the guideline.
- You may agree in writing to a rent increase above the guideline — but this must be voluntary and informed.
- A rent increase notice served on the wrong form (not Form N1) is invalid.
The 2018 Exemption — Does It Apply to You?
Units in buildings first occupied for residential purposes after November 15, 2018 are currently exempt from the rent increase guideline under Ontario law. This means landlords of newer buildings can raise rent by any amount — provided they still give 90 days written notice and only raise rent once every 12 months.
If you are renting a newly built unit, check your lease carefully for this exemption. It does not eliminate all protections, but it does remove the guideline cap.
Red Flags in Rent Increase Clauses
- Clause allows the landlord to increase rent at any time without 90 days notice
- Lease specifies a fixed annual rent increase percentage that may exceed the guideline
- Lease attempts to waive your right to challenge a rent increase
- Rent increase tied to the Consumer Price Index without a cap
- Clause allows rent increase upon lease renewal without proper notice
Questions to Ask Your Landlord
- →Is this unit exempt from rent increase guidelines (e.g., first occupied after November 15, 2018)?
- →How will you notify me of a rent increase — in writing, on Form N1?
- →Has the rent been increased in the last 12 months? If so, when?
- →Is there any clause here that increases rent automatically — and if so, what triggers it?