Can a Landlord Increase Rent on a Month-To-Month Lease in Ontario?

Rent Increases for Month-to-Month Tenancies

Many tenants transition to a month-to-month agreement after their initial lease term expires. This flexible arrangement offers freedom, but it also raises questions about stability, especially concerning housing costs. A common concern is can a landlord increase rent on a month-to-month lease in Ontario? The short answer is yes, a landlord can raise the rent. However, this process is not arbitrary. The law provides a clear framework to protect both tenants and landlords, ensuring fairness and predictability. A landlord cannot simply demand more money without warning.

They must follow specific procedures, adhere to legal limits, and provide proper notice. Understanding these rules is essential for tenants. It allows you to recognize a lawful rent increase and identify one that is not. This knowledge empowers you to have confident conversations with your landlord and protects your financial well-being. This article will explain the rules for rent increases on month-to-month leases. We will cover how often rent can be increased, the maximum allowable amount, and the correct way for a landlord to provide notice. It will also outline what to do if you believe a rent increase is improper.

Rules Governing Rent Increases

Landlords must follow strict rules when increasing rent for a sitting tenant. The most fundamental rule is timing. A landlord can only increase the rent once in a 12-month period. This means 12 full months must pass since the last rent increase or since the day your tenancy began. For example, if your tenancy started on September 1, 2025, the earliest your rent could increase is September 1, 2026. This rule applies regardless of whether you have a fixed-term lease or a month-to-month agreement. It provides tenants with a full year of consistent rent payments.

Another critical requirement is the formal notice. A landlord must give you at least 90 days of written notice before a rent increase takes effect. This notice must be on the official form designated by the government. A casual email, text message, or verbal conversation does not count as proper legal notice. The 90-day period gives you time to budget for the new rent amount or decide if you want to find a new place to live. If a landlord fails to provide this notice correctly, the rent increase is not valid, and you are not required to pay it.

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Exceptions to the Standard Guideline

While most rent increases must follow the annual guideline, certain situations allow a landlord to apply for a larger increase. This is known as an Above Guideline Increase (AGI). A landlord cannot unilaterally decide to charge more; they must get approval from the Landlord and Tenant Board (LTB). The LTB will only approve an AGI for specific, justifiable reasons. These reasons are limited and typically involve significant and unexpected costs the landlord has incurred.

A landlord can apply for an AGI in a few specific cases. These include:

• An extraordinary increase in municipal taxes.

  If the property taxes for the building increase by a very large amount, the landlord can ask to pass some of this cost on to tenants.

• Major capital expenditures.

  If the landlord completes major repairs or renovations that benefit the whole building, they may qualify. Examples include replacing a roof, installing new windows, or updating the heating system. These must be significant capital work, not routine maintenance.

• New security services.

  If the landlord adds new security services that were not previously available, such as hiring a security guard or installing a comprehensive camera system, they can apply for an AGI.

The landlord must submit a detailed application to the LTB with proof of the costs. Tenants in the building will be notified of the application and have the right to challenge it at a hearing. The LTB reviews all evidence and decides if an AGI is warranted and by how much. The increase is typically capped and spread out over several years.

The Correct Process for Notifying Tenants

The method a landlord uses to inform you of a rent increase is just as important as the amount itself. The law is very clear on the proper procedure to ensure tenants are fully and formally informed. As mentioned, the landlord must provide 90 days of written notice. This notice must be delivered using the approved government form, which is designed to provide all necessary information in a clear format. This form ensures there is no confusion about the landlord’s intentions or the tenant’s obligations. It creates an official record of the communication.

The notice form must state the current rent, the new proposed rent, and the exact date the new rent will take effect. It must be filled out completely and accurately. An incomplete or incorrect form can make the entire rent increase void. For instance, if the landlord gets the date wrong or miscalculates the new rent based on the guideline, the notice is invalid. In such a case, the landlord would have to issue a new, correct notice, and the 90-day clock would restart from the date the new notice is given. This strict process protects tenants from ambiguity and ensures they have a fair opportunity to prepare for the change.

Situations Where Rent Rules Differ

It is important to know that the annual rent increase guideline does not apply to all rental properties. The government has created specific exemptions. The most significant exemption relates to new residential units. Any rental unit in a building, mobile home park, or land lease community that was first occupied for residential purposes after November 15, 2018, is exempt from the guideline. This means landlords of these newer properties can increase the rent by any amount they choose. This policy was intended to encourage the construction of new rental housing.

Even with this exemption, landlords of these newer units must still follow the other key rules. They are only permitted to increase the rent once every 12 months. They must also provide the same 90-day written notice using the official form. Tenants in these units have less protection against large rent increases, a critical factor to consider when choosing a place to live. Other exemptions from the guideline exist for commercial properties, some social housing units, and care homes, but the new building exemption is the one that affects the largest number of tenants in the private market today.

Your Options for an Unlawful Increase

Receiving a notice for a rent increase can be stressful, especially if you suspect it does not follow the law. If you get a rent increase notice that seems incorrect, you have several options. The first step is to communicate with your landlord. Open a dialogue and calmly point out your concerns. It is possible the landlord made an honest mistake, such as miscalculating the guideline or providing less than 90 days’ notice. A simple conversation can often resolve the issue without any further conflict. You can show them the official rules from the government website to support your position.

If your landlord insists on the illegal increase, you do not have to pay it. You can continue to pay your current, lawful rent. A landlord cannot evict you for refusing to pay an illegal rent increase. If the landlord continues to pressure you, your next step is to seek help from the Landlord and Tenant Board. You can file an application with the LTB to dispute the increase. The LTB has the authority to rule that the increase is void. If you have already paid the unlawful amount, the LTB can order your landlord to repay the money to you. Knowing your rights and the available recourse provides a clear path to follow and ensures you are protected.

Conclusion

A landlord can raise the rent for a tenant on a month-to-month lease. However, the process is carefully regulated to ensure fairness. Landlords must honour the 12-month rule, meaning rent can only be increased once per year. They must provide 90 days of formal, written notice on the correct government form. For most rental units, the increase is capped by the annual rent increase guideline, which prevents unpredictable and steep hikes in your housing costs. This framework provides stability for tenants while allowing landlords to adjust for inflation.

Understanding these rules empowers you as a tenant. You can confidently review any rent increase notice to ensure it is lawful. Knowing about exceptions, like the one for buildings occupied after November 15, 2018, helps you make informed decisions when looking for a home. If you ever face an unlawful increase, you know there are clear steps to take, from communicating with your landlord to applying to the Landlord and Tenant Board. A tenancy is a business relationship, and knowing the rules helps maintain a positive and respectful one for everyone involved.