Every year, tenants across the GTA receive rent increase notices — and many pay increases that were never legal in the first place, simply because they did not know the rules. Landlords, for their part, sometimes lose a legitimate increase because the notice was defective. The rules under the Residential Tenancies Act are strict, and they cut both ways.
For most rented residential units, Ontario caps the annual rent increase at a guideline percentage set by the province. The guideline is 2.1% for 2026 (it was 2.5% for 2025). If your rent is $2,000 a month, a guideline increase for 2026 can add at most $42.
A rent increase is only lawful if all of the following are met:
An increase that skips any of these steps is not valid — and a tenant who has been charged an unlawful increase can dispute it at the Landlord and Tenant Board within 12 months of being charged.
This surprises many renters: the guideline does not apply to buildings, additions, and most new basement apartments first occupied after November 15, 2018. In those units, the landlord still must follow the 12-month rule and give 90 days' proper notice, but there is no cap on the percentage. Between tenancies, landlords may also negotiate a new rent freely with a new tenant.
In limited situations — for example, certain major capital work — a landlord can apply to the Landlord and Tenant Board for approval to raise rent by more than the guideline. Until the Board actually approves it, the landlord cannot collect the extra amount.
If you are a tenant, do not simply start paying a higher rent because a letter arrived. Check the date, the form, the math, and whether your unit is even covered. If you are a landlord, get the notice right the first time — a defective notice can cost you a full year's increase.
This article is general information only and is not legal advice. Every case turns on its own facts.
Whether you are a tenant facing an unlawful increase or a landlord navigating the Landlord and Tenant Board, WP Legal Professional represents clients across the Greater Toronto Area in English, Cantonese, Mandarin, and Korean. Learn more about our landlord-tenant services.
Act now. Contact us for a confidential consultation before you pay — or lose — that increase.
