New Brunswick Fixed-Term Lease Rent Increase Rules

Fixed-Term Leases Do Not Bypass the Rent Increase Rules

A common misconception among New Brunswick landlords is that a fixed-term lease creates a fresh starting point for rent when it expires. It does not.

Under the Residential Tenancies Act (R.S.N.B. 1975, c. R-10.2), the statutory rent increase rules apply across fixed-term, month-to-month, year-to-year, and week-to-week tenancies. A landlord cannot increase rent upon executing a new fixed-term agreement with an existing tenant beyond the statutory 3% cap or earlier than the default 12-month frequency limit, unless the landlord and tenant agree otherwise in writing.

The 12-Month Lockout Still Applies

Section 11.1(2.01) of the Residential Tenancies Act sets a default rule: unless the landlord and tenant agree otherwise in writing, rent cannot increase during the first consecutive 12-month period of the tenancy agreement, and there can be no more than one increase in any other consecutive 12-month period.

The Act states the limit by consecutive 12-month periods of the tenancy agreement. It does not define the period by the tenant's first physical entry or by the signing date alone; a tenancy agreement can take effect on its fixed commencement date without the tenant entering the premises (Section 10(2)).

Signing a new one-year lease with your existing tenant on April 1 does not let you raise rent on April 1 if the last increase took effect less than 12 months ago.

Six Months' Notice Is Still Required

Even on a fixed-term lease approaching its expiry date, the landlord must give six full calendar months' written notice of any rent increase. This notice must be a separate, standalone document — embedding it in the renewal agreement invalidates it.

If your one-year lease runs from September 1, 2026 to August 31, 2027, and you want the new rent to apply from September 1, 2027, you need to serve the rent increase notice by February 28, 2027 at the latest. That gives the tenant six full calendar months (March through August).

What Happens When a Fixed-Term Lease Expires

If neither party gives notice to end the tenancy, a fixed-term lease in New Brunswick automatically converts to a month-to-month periodic tenancy under the same terms — including the existing rent. The 3% cap and every other statutory protection carries forward.

The tenant who stays on after a fixed-term lease expires is not a "new tenant" for rent-setting purposes. They are the same tenant, with the same baseline rent, subject to the same cap.

The One Scenario Where Rent Resets

The only time rent resets to market value is when the unit genuinely turns over. If the tenant leaves at the end of the fixed term and a different person signs a new lease, vacancy decontrol applies — you can set the initial rent at whatever the market supports.

Once that new tenant moves in, the 12-month lockout and 3% cap lock in again on their new baseline.

Automatic Escalation Clauses Are Void

Any clause in a fixed-term lease that automatically escalates rent — by CPI, by a fixed percentage, or by any internal formula — is void under Section 2 of the Residential Tenancies Act. Rent can only be increased through the formal statutory process: written notice, separate document, six months' lead time, within the cap.

If your current lease includes an escalation clause, it is unenforceable. You still need to serve a proper notice.

Getting the Process Right

The Rent Increases in New Brunswick guide walks through the complete process for fixed-term and periodic tenancies, including timeline calculations, notice templates, and the above-cap application route for capital renovation costs.

See more New Brunswick guides →