First Rent Increase in Ontario — When Can You Raise a New Tenant's Rent?

The 12-Month Rule Starts When the Tenancy Begins

Under RTA s. 119, you cannot raise a new tenant's rent until at least 12 full calendar months have elapsed since the day the tenancy began. Use the tenancy start date — not the date the lease was signed, the date the first rent cheque cleared, or the date you listed the property.

For a tenancy that began on March 1, 2026, the earliest effective date for a rent increase is March 1, 2027. You must also provide 90 days of advance notice before that effective date, which means the tenant must receive the N1 by December 1, 2026 at the latest (earlier if you mail it, since regular mail adds a 5-day deeming period).

Fixed-Term Lease Expiry Does Not Reset the Clock

A common misconception: many landlords believe a one-year lease expiry creates an opportunity to set a new rent. It does not. Under RTA s. 38, when a fixed-term lease expires, the tenancy automatically continues on a month-to-month basis under the same terms. The lease expiry is not a new tenancy and does not authorize a rent change outside the RTA's notice and increase rules.

Signing a lease renewal with the same tenant does not reset the 12-month clock either. The only event that resets your ability to set a market rent is vacant possession — the current tenant moves out, and a genuinely new tenant moves in under a new agreement. As long as the existing tenancy continues (including automatic month-to-month continuation), an ordinary rent increase must use the prescribed Form N1 or N2. A valid above-guideline increase or agreement follows its own RTA process.

How Often Can You Raise Rent?

Once per year, maximum. After the first increase, the 12-month clock resets from the effective date of that increase — not from the service date or the anniversary of the tenancy. If your first increase took effect on March 1, 2027, the next earliest effective date is March 1, 2028.

You are not required to raise rent every year. But if you skip a year, you cannot bank the missed guideline and stack it onto the next increase. Each year's guideline applies only to increases taking effect during that calendar year, calculated against the current lawful base rent. A skipped increase is permanently forfeited.

So yes, you can increase rent every year — but only the current year's guideline percentage, applied once, with proper notice.

Timing the First Increase: A Worked Example

Scenario: Tenancy began September 1, 2026. Rent is $1,800/month. The unit is rent-controlled (occupied before November 15, 2018).

• Earliest effective date: September 1, 2027
• Applicable guideline: the 2027 rate of 1.9% (because the effective date falls in 2027)
• New rent: $1,800 × 1.019 = $1,834.20/month
• 90-day notice deadline before September 1, 2027: notice must be received by June 3, 2027
• If mailing: post by May 29, 2027 (5-day deeming rule)

The effective date must land on the first day of a rental period or the day a fixed-term tenancy expires. For most monthly tenancies, that means the 1st of the month. If the rental period itself begins on the 15th, the increase effective date must be a 15th.

What About Mid-Lease Increases?

If the tenant signed a 12-month lease starting September 1, 2026, the lease expires August 31, 2027. You can serve the appropriate notice (N1 or N2) with an effective date of September 1, 2027 — the first day after the fixed term expires and the month-to-month period begins. This is the standard approach and the earliest lawful date.

The lease itself cannot authorize an automatic mid-term increase or override the RTA. Any rent increase during the fixed term must be permitted by the RTA and satisfy its applicable requirements, including the 12-month rule where it applies.

Joint Tenants and Lease Assignments

Adding or removing a joint tenant does not create a new tenancy as long as at least one original tenant remains. The 12-month clock keeps running from the original tenancy start date or last lawful increase.

A lease assignment under RTA s. 95 does not automatically create a new tenancy when at least one original tenant remains in possession. In that case, the assignee takes over under the existing lawful rent, and the 12-month clock continues from the existing tenancy or last lawful increase.

Get the Timeline Right the First Time

The Ontario Rent Increase Guide includes a notice timeline planner that works backwards from your chosen effective date, a deemed-service worksheet for every delivery method, and a 24-item compliance checklist. It is built for the self-managing landlord who wants to get the first increase done correctly without hiring a paralegal.

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