Sandeep Pawar
Broker
Home / Invest / Ontario landlord rules
Ontario landlord rules every small investor should know
The Residential Tenancies Act in plain English: the standard lease, deposits, rent increases and the post-2018 exemption, ending a tenancy, and legal second units.
The short answer: most Ontario rentals fall under the Residential Tenancies Act. Use the standard lease and collect no more than one month’s rent as a deposit. Raise rent once a year with 90 days’ notice. On units first occupied on or before 15 November 2018, the cap is 2.1% for 2026 and 1.9% for 2027. You can end a tenancy only for reasons the Act allows, and only the Landlord and Tenant Board can order an eviction.
Who the Act covers
The Residential Tenancies Act, 2006 covers most rental units in Ontario: apartments, houses, basement units and rooms. It sets the rules for leases, rent, repairs and ending a tenancy, and the Landlord and Tenant Board (LTB) resolves disputes.
One exception matters to house-hackers. The Act does not apply if the tenant must share a kitchen or bathroom with the owner. A self-contained basement unit with its own kitchen and bathroom is covered.
The rules changed recently. The LTB updated processes, forms and rules on 21 September 2026, after amendments under Bill 60 and Bill 97. Further changes started on 1 July 2026. Check the current form and guideline before you serve any notice.
The standard lease
- Most residential tenancy agreements signed on or after 30 April 2018 must use Ontario’s standard form of lease.
- You must give the tenant a copy of the signed lease within 21 days. If you did not use the standard lease, the tenant can demand it.
- You must also give new tenants the LTB’s information brochure on rights and responsibilities, on or before the start of the tenancy.
- Additional terms cannot override the Act. A term the Act does not allow, such as a damage deposit, will not be enforced.
- Exempt from the standard lease: care homes, mobile home parks and land lease communities, most social and supportive housing, co-operative housing and certain special tenancies.
Deposits
| Deposit | Rule |
|---|---|
| Rent deposit | No more than one month’s rent (one week’s for weekly rent), collected on or before the start of the tenancy. It can only be used for the last rental period. |
| Interest | Paid to the tenant every year, at the same rate as the rent increase guideline. |
| Top-up | When rent goes up, you can ask the tenant to top up the deposit by the same amount. |
| Key deposit | Optional and limited by law; it must be handled as the Act requires. |
| Damage or pet deposit | Not allowed. |
| Payment method | You cannot require post-dated cheques or automatic payments, although a tenant can agree to them. |
Rent increases
You and a new tenant agree the starting rent freely. After that, increases follow the rules below.
- How often: once every 12 months, counted from the start of the tenancy or the last increase.
- Notice: at least 90 days in writing, on the proper LTB form (N1, N2 or N3).
- How much: up to the yearly guideline, unless the unit is exempt or the LTB approves more.
- Disputes: a tenant can challenge an improper increase at the LTB within 12 months of first being charged.
| Year | Guideline |
|---|---|
| 2024 | 2.5% |
| 2025 | 2.5% |
| 2026 | 2.1% |
| 2027 | 1.9% |
Above-guideline increases: a landlord can apply to the LTB for more than the guideline. Grounds include a big rise in municipal taxes, eligible major repairs, or certain security costs. Increases for capital work are capped at 3% above the guideline per year. A landlord and tenant can also agree on Form N10 to up to 3% above the guideline. The landlord must provide a major repair, new equipment or a new service. The tenant has five days to change their mind.
The 15 November 2018 exemption
The guideline does not apply to new buildings, additions and most new basement apartments first occupied for residential purposes after 15 November 2018. For these units the 12-month and 90-day notice rules still apply, but the amount of the increase is not capped by the guideline.
This matters for investment math. A newly created, registered basement unit can usually follow market rent over time. An older unit that has been rented since before 2018 cannot, so your rent growth assumption should match the unit’s history. Ask the seller for the date each unit was first occupied, and verify it.
Buying a property with tenants in place? Let me check the leases before you firm up.
Book an investment strategy callEntry, repairs and vital services
- Entry: generally 24 hours’ written notice, giving the reason and a time between 8 a.m. and 8 p.m. Reasons include repairs, a reasonable inspection, or showing the unit to a buyer, lender or insurer. No notice is needed in an emergency or if the tenant agrees.
- Repairs: you must keep the property in good repair and meet health, safety, housing and maintenance standards. This applies even if the tenant knew about a problem when they moved in.
- Tenant’s duties: keep the unit reasonably clean and repair damage they or their guests cause, not normal wear and tear.
- Vital services: you cannot shut off or interfere with heat (1 September to 15 June), electricity, fuel, or hot or cold water.
Ending a tenancy
A lease ending does not end the tenancy. Without a new agreement, the tenant stays on as a monthly or weekly tenant on the same terms. A landlord can end a tenancy only for a reason the Act allows, starting with the correct written notice.
- Tenant leaving: at least 60 days’ written notice for a monthly or fixed-term tenancy. It ends on the last day of a rental period or the term. A mutual agreement to end, ideally in writing, also works.
- Tenant conduct: for example unpaid or persistently late rent, damage, illegal activity or disturbing others. Each has its own notice form and timing.
- No-fault reasons: your own or a family member’s use, a purchaser’s use, demolition, conversion, or repairs that need a permit and vacant possession.
N12 and N13 basics
| N12: landlord’s or purchaser’s own use | N13: demolition, conversion or major repairs | |
|---|---|---|
| Who or what | The landlord, spouse, a child or parent of either, or a caregiver. Or a purchaser and their family, for buildings of up to three units or a condo unit. | Demolition, conversion to a non-residential use, or repairs so extensive they need a building permit and vacant possession. |
| Notice | Termination date at least 60 days after notice, on the last day of a rental period or fixed term. | Termination date at least 120 days after notice, on the last day of a rental period or fixed term. |
| Compensation | One month’s rent or another acceptable unit. For a landlord’s own use notice served on or after 21 September 2026 with at least 120 days’ notice, none is required. A purchaser’s use always requires it. | Five or more units: three months’ rent or another unit. Fewer than five units: one month’s rent or another unit. Different amounts apply if the tenant moves back after repairs. |
| Good faith | The person must genuinely intend to live there for at least one year (landlord’s own use). Bad faith can lead to large LTB awards. | A tenant displaced by repairs who gives written notice before moving out has a right of first refusal to move back at the same rent. For notices served on or after 21 September 2026, the tenant gets at least 60 days after the unit is ready. |
The LTB may find a no-fault eviction was in bad faith. Ontario says the former tenant may then recover up to a year of rent difference and up to 12 months of the last rent. Reasonable moving and storage costs can be added. Landlords must also disclose past no-fault evictions.
Small errors, such as a wrong termination date, can make a notice defective and it cannot be amended. Have a lawyer or licensed paralegal review any N12 or N13 before you serve it.
The Landlord and Tenant Board
The LTB works like a court for residential tenancies. Either side can apply. Disputes can be settled through mediation or decided at a hearing, after which a member issues a written order.
A notice alone does not remove a tenant. If the tenant does not leave, you must apply to the LTB and obtain an eviction order. Changing the locks or removing belongings without an order is not allowed. Plan for the time this takes when you size your cash reserve.
Legal second units
A second unit is a self-contained home inside a house, with its own kitchen, bathroom and sleeping area. Adding one needs a building permit and must meet the Ontario Building Code. The Code covers room sizes, ceiling heights, windows, exits, smoke and carbon monoxide alarms. Fire separation between units is generally 30 minutes. Electrical work needs a separate permit and inspection.
Your municipality may also require the unit to be registered or licensed. In Brampton, every additional residential unit must be registered to be legal. Under the City’s Residential Rental Licensing pilot program, homeowners renting one to four units need an annual licence. The details, and how I check them before you buy, are on the legal basement investment page.
Before your first tenant moves in
- Confirm each unit is legal: permit history and municipal registration.
- Apply for any municipal rental licence, such as Brampton’s Residential Rental Licence.
- Buy landlord insurance that covers rented units, and tell your insurer about every unit.
- Screen applicants consistently and lawfully: income, references and credit with written consent.
- Sign Ontario’s standard lease, give the tenant a copy within 21 days and the LTB information brochure.
- Collect only a last month’s rent deposit and, if agreed, a key deposit. Diarize yearly deposit interest.
- Record the unit’s condition with dated photos at move-in.
- Diarize the earliest date for a rent increase and the 90-day notice deadline.
- Keep every receipt for your rental income tax return.
Selling a property with tenants? See selling a tenanted home. New to investing? Start at the Investor Knowledge Centre.
Questions landlords ask
How much can I raise the rent in Ontario in 2027?
Ontario’s rent increase guideline for 2027 is 1.9%; it was 2.1% for 2026. It applies to most units first occupied on or before 15 November 2018. You can raise rent only once every 12 months, with at least 90 days’ written notice on the proper Landlord and Tenant Board form.
Is my basement apartment exempt from rent control?
New buildings, additions and most new basement apartments first occupied after 15 November 2018 are exempt from the guideline. The 12-month and 90-day notice rules still apply. An older basement unit that was rented before that date is generally covered by the guideline.
Can I ask for a damage deposit in Ontario?
No. A landlord may collect a key deposit and a rent deposit of up to one month’s rent. The rent deposit can only be used for the last month’s rent. A lease term that requires a damage deposit or a pet deposit is not allowed. You must pay interest on the rent deposit every year at the guideline rate.
Do I have to use Ontario’s standard lease?
For most residential tenancy agreements signed on or after 30 April 2018, yes. You must give the tenant a copy of the signed lease within 21 days. A tenant can demand the standard form if you did not use it. Care homes, most social housing, co-ops and some other special tenancies are exempt.
Can I evict a tenant to move my family in?
Yes, if the person moving in genuinely intends to live there for at least one year. It can be you, your spouse, a child or parent of either of you, or a caregiver. Serve an N12 with a termination date at least 60 days away, on the last day of a rental period or fixed term. You owe one month’s rent or another acceptable unit, unless an exception applies. If the tenant does not leave, only the LTB can order an eviction.
Do I still have to pay N12 compensation if I give 120 days’ notice?
The LTB’s guideline covers landlord’s own use notices served on or after 21 September 2026. No compensation is required if the termination date is at least 120 days after the notice. This exception does not apply when a purchaser requires the unit. Get legal advice before serving, because errors can make the notice invalid.
Does the Residential Tenancies Act apply if I rent a room in my own home?
Not if the tenant must share a kitchen or bathroom with you, the owner. A self-contained basement unit with its own kitchen and bathroom is covered by the Act. Ask a lawyer or paralegal if your set-up is unclear.
How much notice do I need to enter the rental unit?
Generally 24 hours’ written notice, stating the reason and a time between 8 a.m. and 8 p.m. You can enter without notice in an emergency, if the tenant agrees, or in a few other cases set out in the Act.
Sources
- Ontario.ca: rent increase guideline (updated 23 June 2026)
- Ontario.ca: residential rent increases (updated 23 June 2026: 2024 and 2025 guidelines, disputing an increase within 12 months)
- Ontario.ca: guide to Ontario’s standard lease (updated 27 October 2025)
- Ontario.ca: renting in Ontario, your rights (updated 18 September 2026)
- Landlord and Tenant Board: A Guide to the Residential Tenancies Act (last updated January 2019: deposits, entry, vital services, N10 and above-guideline increases; check for later changes)
- Landlord and Tenant Board: Interpretation Guideline 12, eviction for personal use, demolition, repairs and conversion (updated September 2026)
- Landlord and Tenant Board: forms (N12, N13 and the 21 September 2026 changes)
- Ontario.ca: add a second unit in your house
- City of Brampton: additional residential units and Residential Rental Licensing
Buy rentals with the rules already checked
Before you firm up, I review the leases, deposits, rent history and unit registration, so the income you are buying is income you can keep.