Above-Cap Rent Increase in New Brunswick: How to Apply for Above 3% up to 9%

When You Can Exceed the 3% Cap

The 3% annual rent cap isn't absolute. Under Section 11.13 of the Residential Tenancies Act and Regulation 82-218 Section 11.12, landlords who have incurred capital expenditures for renovations can apply to raise rent above 3%, up to a statutory maximum of 9%.

The critical word is "capital." The expenditure must be for work that prolongs the physical life of the building — structural repairs, major system replacements, or significant renovations. The application goes to the Tenant and Landlord Relations Office and must be approved by a Residential Tenancies Officer before the notice is served.

The Application Process

The above-cap route follows a strict sequence. Skipping a step — especially step 4 — invalidates the entire increase.

Step 1: Incur the expenditure. Before applying, the landlord must have incurred capital expenditures for renovations. The regulation requires proof of incurred costs; it does not specify that all work must be finished.

Step 2: Assemble your evidence. The officer will need documentation proving what was done and what it cost. Gather contractor invoices, receipts, and descriptions of the completed work.

Step 3: Submit the required application. Regulation 82-218, section 11.12(2), requires the form provided by a Residential Tenancies Officer and information proving the incurred capital expenditures. Submit it to the Tenant and Landlord Relations Office. There is no fee for this application.

Step 4: Wait for the decision. The officer reviews your evidence and makes a determination. Three outcomes are possible:

• Full approval at the requested percentage
• Partial approval at a lower percentage
• Rejection (the work doesn't qualify)

Step 5: Serve the notice. Only after receiving written approval can you serve the rent increase notice on the tenant, with the approved percentage. The standard six-month notice period and separate document rule still apply.

What Qualifies

The regulation specifies capital expenditures incurred for renovations — work that extends the useful life of the premises. Examples that typically qualify:

• Roof replacement
• Foundation repairs
• Complete HVAC system replacement
• Major plumbing or electrical overhauls
• Structural modifications

What doesn't meet the threshold: repainting walls, replacing carpet, minor appliance upgrades, landscaping, or rising operational costs like property taxes and utility rates. These are ordinary maintenance or operating expenses, not capital improvements.

The 9% Maximum

Even with officer approval, the increase cannot exceed 9% in total. This is the statutory ceiling — an officer has no authority to approve anything higher, regardless of how much the renovations cost.

If you spent enough on renovations to justify a 12% increase, you get 9% at most. The unrecovered balance can't be carried forward to a future year's application.

What Happens Without Approval

If you serve a notice proposing, say, 7% without first obtaining officer approval, the "deemed 3%" mechanism kicks in under Section 11.12. The notice isn't voided — it's automatically scaled back to 3%. The tenant pays only the capped amount.

This means the above-cap application must happen before the notice, not after. You can't serve a 7% notice and then retroactively justify it by filing an application.

Timing and Interaction with Other Rules

The above-cap application process sits on top of all the standard rules:

• Default frequency limit still applies to tenancies governed by Section 11.1 — unless the landlord and tenant agree otherwise in writing, no increase in the first consecutive 12-month period and no more than one in any other consecutive 12-month period
• 6-month notice period still applies — counted from service of the notice after approval
• Separate document rule still applies — the notice must be standalone

The application process itself isn't time-limited by the Act, but the practical constraint is clear: renovation, application, officer review, then six months' notice. Plan for the full timeline.

For the complete rent increase workflow — including standard increases, notice content, service methods, and tenant review procedures — see our Rent Increases in New Brunswick guide.

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