Above Guideline Rent Increases in Ontario and the 3% Cap

Two things get mixed up constantly, and the mix-up costs renters money. An N13 ends your tenancy so the landlord can demolish the rental unit, change its use, or do heavy repairs. That is a renoviction. It runs on section 50 of the Residential Tenancies Act, 2006, needs at least 120 days, and usually comes with money. An above guideline increase, or AGI, keeps you in your home and raises the rent past the province's yearly limit, on a Board order under section 126.

An N13 is a notice, and here is what it must say

Section 50(1) gives three grounds. Demolish the unit. Change it to a use that is not housing. Or do repairs so heavy they need a building permit and an empty unit. The date must be at least 120 days out and land on the last day of a rental period or a fixed term (s. 50(2)). Guideline 12 says a defective notice "cannot be amended after it has been given to the tenant", and that the Board cannot end a tenancy on the basis of one.

A notice is not an order. Form N13 puts it plainly: "You do not have to move out if you disagree with what the landlord has put in this notice". To leave early, you can end the tenancy on 10 days' written notice using Form N9 (s. 50(5)).

To evict, the landlord files Form L2. Guideline 12 puts that deadline at 30 days from the termination date, after which it is dismissed (s. 69(2)). Section 73 sets the test: good faith intent to do the work, plus the permits, or all reasonable steps to get them where none can issue until the unit is empty.

Even so, section 83(1) lets the Board refuse the eviction or postpone enforcement, and section 83(2) makes it weigh that at every hearing. Section 83(3) requires refusal in listed cases, such as a landlord in serious breach of their own duties. From September 21, 2026 the postponement half narrows. Section 83(1)(b) becomes subject to prescribed limits. A new section 8.4 of O. Reg. 516/06 then governs a section 48, 49 or 50 notice. The Board may postpone "only if the landlord consents to the postponement", or where a delay "would not be unfair to the landlord or other tenants of the residential complex".

What you are owed, and by when

The money turns on the ground and on the size of the residential complex, your building. For demolition or a change of use it is three months' rent at five units or more (s. 52(1)), one month's rent below that (s. 52(2)). The landlord may offer another unit you accept instead.

Repairs split on whether you said you were coming back. If you did not, section 54 sets three months' rent at five units or more, one month's rent below that. If you did, it is the rent for the lesser of the repair period and three months at five units or more (s. 54(2)), or one month below that (s. 54(4)). Section 55 restores three months' rent where the complex fell below five units through a severance, meaning a split of the property into separate parcels, less than two years earlier.

Payment is due no later than the termination date (s. 55.1), and no eviction order issues until it is made (s. 83(4)). Guideline 12 says compensation "is not required if the landlord has been ordered to do the repair or renovation or if the tenant resides in a social housing rental unit". On a mobile home or land lease home, Form N13 sets the payment at one year's rent or $3,000, whichever is less, on a year's notice. Section 73.1 runs the other way: the Board can order the money back if the application fails.

The right to come back, and how you keep it

The right of first refusal lets you move back in once repairs are done, at no more than the landlord could lawfully have charged had you never left (s. 53(3)). Keeping it takes written notice before you move out (s. 53(2)), and a written address update every time you move (s. 53(4)). Guideline 12 says a landlord "cannot refuse to allow the tenant to move back into the rental unit if the tenant has provided written notice". The N13 itself has to tell you about the right (s. 50(3)).

From September 21, 2026, section 53 adds landlord duties. Once you give notice, they must tell you in writing when the unit should be ready, update you when that date moves, and say when it is ready. You then get at least 60 days to take the unit back (s. 53(2.2)).

If the work never happens

Section 57(1)(c) lets a former tenant apply where the N13 was given in bad faith and the landlord did not demolish, convert or renovate within a reasonable time. You have one year from the day you moved out (s. 57(2)). Section 57(3) lists what the Board can order. Your extra rent for a one-year period after leaving. General compensation of up to 12 months of the last rent charged. Out-of-pocket moving and storage costs. An abatement. An administrative fine of up to "the greater of $10,000 and the monetary jurisdiction of the Small Claims Court", which has been $50,000 since October 1, 2025. And, under paragraph 4, "any other order that the Board considers appropriate", which Guideline 12 says can include letting you move back in if the unit has not been rented to someone else.

The presumption of bad faith in section 57(5) covers a section 48 notice, the one a landlord gives for their own use. It does not reach an N13, so the burden is yours.

Section 57.1 is a separate claim against a landlord who owed you the right to come back and withheld it. The window is two years from the day you vacated. From September 21, 2026 it becomes the later of that anniversary and six months after the work is finished. Breaking the new section 53 duties counts as withholding the right. Both claims go on Form T5, at $53, or $48 through the Tribunals Ontario Portal.

What changes on September 21, 2026, and what is still waiting

Schedule 7 of the Helping Homebuyers, Protecting Tenants Act, 2023 came in pieces, and they did not all start. The section 53 duties and the section 57.1 change above were proclaimed for September 21, 2026. A new section 50(3)(b) would make a landlord attach a report from a qualified person to an N13. It is still marked "not in force", and so is the matching section 73(4). Summaries saying Ontario now requires that report are ahead of the statute. The permit point is not new: section 50(1)(c) has always limited an N13 to work needing a building permit. The section 83 change above is from a different Act, Schedule 12 to the Fighting Delays, Building Faster Act, 2025.

An above guideline increase keeps you in the unit

The guideline is the province's yearly ceiling on rent increases for most tenants, 1.9% for 2027. An AGI is the exception. Section 126(1) lists three grounds. An extraordinary rise in the cost of municipal taxes and charges. Eligible capital expenditures. And operating costs for security services provided by people the landlord does not employ. There is no utilities ground: the Rental Fairness Act, 2017 removed it from January 1, 2018.

The landlord applies on Form L5 at least 90 days before the first increase is due. Section 126(11) caps the share justified by capital work and security services at 3 per cent above the guideline in any 12-month period. The remainder spreads over the next two, at up to 3 per cent each. Section 33(4) of the regulation settles the half that gets missed: none of that limit touches the taxes ground. Section 28(1) sets the test there: a rise greater than the guideline plus 50 per cent of the guideline.

What counts as capital work, and what never does

A capital expenditure is major work whose benefit is expected to last at least five years. Section 18(1) of O. Reg. 516/06 rules out routine or ordinary work, and work "substantially cosmetic in nature or is designed to enhance the level of prestige or luxury offered by a unit or residential complex".

Section 126(7) adds an eligibility test. The work must serve the building's physical integrity, the landlord's repair and safety duties, a major building system, access, conservation or security. Replacing something that did not need replacing is out, unless the swap serves one of those last three (s. 126(8)).

Two filters follow. The work has to finish inside the 18-month period ending 90 days before the first increase (regulation, s. 26(2)), and be paid for: the regulation defines "incurred" as payment in full, apart from a holdback withheld under the Construction Act.

The security services ground covers guards or monitoring bought in, not a landlord's own staff. Section 30(3) makes the Board strip out anything dropped before the hearing day.

What you pay while you wait, and what if the landlord loses

Until an order takes effect, section 126(5) holds you to the lesser of two figures. The new rent on the notice, or the most the landlord could charge without applying, normally the guideline. The brochure is direct: "The tenants, however, do not have to pay this higher amount unless it is approved in an LTB order". Sections 126(12) and 126(13) make the Board dismiss the application for an affected unit, or hold the increase back until the problem is fixed. Guideline 14 says a dismissal is final.

Toronto and Mississauga add a licence on top

Two GTA municipalities license renovictions, Toronto since July 31, 2025 and Mississauga from September 1, 2026. Toronto's is Municipal Code Chapter 662, By-law 53-2025, in force for N13s issued on or after July 31, 2025. Mississauga's By-law 0039-2026 was adopted on April 1, 2026, and section 63 brings it into force at 12:01 a.m. on September 1, 2026, for N13s served on or after that day.

No other Greater Toronto Area municipality has enacted one, though the evidence is uneven. Oshawa's Report SF-26-06 of February 4, 2026 records Ajax as having "completed feasibility report in October 2025; presently no by-law adopted" and Whitby as "under review". Milton's Housing Strategy and Action Plan of November 2025 carries a renoviction framework as a long term action at "Not started". Elsewhere the basis is thinner: no such by-law appears in the municipality's published by-law list.

Both by-laws open the same way. The landlord has 7 days from giving the N13 to apply, and needs the building permit first. They also need a qualified person to report that the work is so extensive it needs vacant possession, or, in Toronto, such a danger to the occupant's health and safety. In Toronto that person is licensed by the Ontario Association of Architects or Professional Engineers Ontario, or, where no permit is required, another professional the Chief Building Official accepts. Work cannot start until the licence issues.

Toronto sends a Tenant Information Notice for the landlord to post on your door within five days. A 14-day period then runs, so you can get advice. Next comes a plan: temporary housing you have agreed to, or monthly rent-gap payments if you find your own. The City's 2026 table puts a one bedroom outside the downtown zone at $2,502. If you pay $1,600, the gap is $2,502 minus $1,600, or $902 a month.

If you are not coming back, the payment is a one-time lump sum due before the licence issues, and the City states it in more than one way. Chapter 662 § 662-2.4D multiplies the average market rent itself by three and subtracts nothing: $2,502 × 3 = $7,506. The City's tenants page tells you to take your rent off first: $902 × 3 = $2,706. The landlords page calls it "three months of rent-gap payments" in one place and "a rent-gap payment (equal to three months' rent)" in another. The by-law is the enforceable text. Ask the Chief Building Official which figure your licence file used, quoting § 662-2.4D.

Mississauga makes the landlord pay a moving contribution to every displaced tenant, returning or not, at least 15 days before you move out. A returning tenant who takes a reasonably comparable temporary unit that costs more also gets top-ups, the difference between average market rent and current rent. Those start once the compensation under the Act runs out, with written updates every two weeks.