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About Toronto's Rentals
The City of Toronto may not be Canada's capital, but it is known to be one of the largest and most expensive cities in Canada to live in. With a population of over 6.4 million and a steady influx of tourists and immigrants, Toronto is a key pillar of the country's rental markets.
The high demand for housing that exceeds the limited supply has led to rent control rules throughout Ontario in order to protect tenants from sudden or high rent increases.
Most private residential units in Toronto are protected by the province's rent control rules. Therefore, understanding rent control can be very useful for both landlords and tenants in Toronto's competitive rental market.
In this article, we will break down what rent control is, who it applies to, the rules for increasing rent, and how to handle tenancy disputes.
What is Rent Control?
Rent control refers to the limit on how much a landlord may increase rent each year. Rent control laws in Ontario must follow the Residential Tenancies Act (RTA) and the province's annual guidelines. In 2026, the rent may increase by up to 2.1% (meanwhile, the previous 3 consecutive years were set at 2.5%). In most cases, rent may only increase if the tenant has lived in the unit for at least 12 months or if it has been at least 12 months since the last increase.
In order to raise the rent, the landlord is obligated to give at least 90 days' written notice to the tenant through the N1 Notice of Rent Increase form. These rules help protect tenants from unstable rent increases while still ensuring that landlords can cover the costs of maintenance and inflation. Any rental increases above the provincial guideline must be approved by the Landlord and Tenant Board (LTB). For any above guideline increases (or "AGI"), landlords must fill out an L5 Application for a Rent Increase above the Guideline form.
Landlords may apply for an AGI for the following reasons:
- To compensate for any "extraordinary" increases to the municipal taxes and charges for the property
- The costs for the property's security services have increased or been added for the first time
- Capital expenditure work (including acquiring, upgrading or repairing) was done on the property
Who Does Rent Control Apply To?
Most private residential units, whether they are condos, townhomes, or single-detached homes, in Toronto are protected by rent control rules under the RTA. Care homes, mobile homes, and land lease communities are also subject to rent control guidelines.
The exemptions to these rules are:
- New rentals (new buildings, accessory dwellings, and most new basement apartments) that are first occupied after November 15, 2018
- When a landlord and a new tenant agree on a set rent amount
- Community housing
- Long-term care homes (only towards the rental costs, not for any services provided by the facility)
- Commercial properties
Note that even rent ocntrol-exempt homes must still follow other rules under the Residential Tenancies Act, including a 12-month period between rental increases, with the standard 90 days' notice using the applicable form. This means that if your lease was signed on March 1, landlords will only be able to raise the rent (up to the guideline amount) starting from March 1 the next year.
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Resolving Rent Control Disputes
If a tenant or landlord has any issues with a rental increase, such as a landlord raising rent without proper advance notice, without the correct form, or increasing above the guidelines, they may dispute it with the Landlord and Tenant Board within 12 months of the increase. After a hearing with the LTB, the Board will decide whether to order a rent adjustment or a refund if the rent increase was not in accordance with the RTA.
Tips for Landlords
In order to help prevent any potential disputes with tenants, it is essential to maintain transparency and keep documentation that proves your rental unit is exempt from rent control. Documentational proof can include:
- Adding an additional term of the exemption to the rental agreement
- Permits, invoices or documents that show the rental home or rental portion of the existing home is newly built or first occupied after November 15, 2018
- Any before and after images of new units added to existing properties
If you are renting out a new unit in your existing home, you will want to keep proof of the unit's completion date in order to qualify for the exemption. The landlord must also prove that the new unit was built in an unfinished basement or attic and that they have also lived in the same building once the unit was occupied.
Key Takeaways
- Rent control is the maximum limit a landlord may raise their rental rates annually, starting from the date of tenancy or the last rent increase.
- The guideline limits for rental increases are provided by the provincial government every year.
- Rent control is applied to most private residential units and does not apply to new rental units first occupied after November 15, 2018, or to certain types of housing.
- Landlords must follow the Residential Tenancies Act and provide the proper 90-day notice with the L5 form in order to raise a tenant's rent. Any "above guideline increases" must be approved by the Landlord and Tenant Board.
- Landlords should keep all documentation to prove any rent control exemptions. Any rental disputes are handled by the Landlord and Tenant Board, which will then make an official verdict for each case.
The Bottom Line
Rent control helps to maintain stable, affordable housing in Toronto's high-demand rental market. Understanding the rent control rules and guidelines will help protect tenants from sudden and drastic rental raises, while also providing a framework for landlords to manage their properties.
If you have any questions or inquiries about renting a home in the GTA, connect with one of our award-winning agents today! Our real estate agents can help you find the right property or tenant for any city or neighbourhood while ensuring you have all the knowledge you need to succeed.
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