In Ontario, for the majority of existing tenancies (see below for exact criteria), rent increases are mandated by the province.
For example, in 2019 it is set as 1.8%. This means that on rent of $1,000 a month (if the tenancy meets the criteria set out below), a landlord can increase the rent legally to $1,018 if the N1 form is filled out accurately. That’s an annual increase of $216.
Many landlords struggle with the question of whether they should raise the rent for good tenants. Our answer is always YES! This increase in rent is to reflect a general increase in costs due to inflation. That $216 a year may seem trivial, but remember – each rent increase compounds upon the previous increase. If a tenant stays in a unit for 5 years, here are two possible scenarios.
5 years – no increase to the monthly rent of $1,000.
5 years – rent increase every year legally, rent of $1,093.30 (assumes 1.8% annual increase)
That’s a 9% difference in your gross income for the exact same unit and tenant. $93 extra per month for just filing 1 form annually over the course of 5 years. In year 5, this results in an annual rent increase of $1,119.60, which is equivalent to being paid for an additional month.
Always file your N1 forms in a timely manner!
General Technical Concept:
Who Does this Guideline Apply to?
This guideline applies to most private residential rental units covered by the Residential Tenancies Act.
It does not apply to:
- Vacant residential units
- Social housing units
- Nursing homes
- Commercial properties
This guideline also does not apply to new buildings, additions to existing buildings, and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018.
When to Use Other Forms?
Most landlords must use this form (Form N1) when increasing the rent. However, there are three exceptions:
- Use Form N2 to increase the tenant’s rent if the rental unit is exempt from the rules under the Residential Tenancies Act, 2006 (the RTA) limiting the amount of the rent increase.
- Use Form N3 (Notice to Increase the Rent and/or Charges for Care Services and Meals) if the rental unit is in a care home.
- Use Form N10 if you and the tenant have agreed to increase the rent above the guideline, because you have either: completed or will complete capital work, or have provided or will provide a new or additional service.
How to Complete the Form?
Download and complete the form here: http://www.sjto.gov.on.ca/ltb/forms/
(Make sure you read the instructions for the document as well!)
How to Deliver the Notice?
You must give the tenant the Notice of Rent Increase at least 90 days before the date you will increase the tenant’s rent.
There are many ways that you can give this notice to your tenant. You can:
- hand it directly to the tenant or to an adult in the rental unit,
- leave it in the tenant’s mailbox or where mail is ordinarily delivered,
- place it under the door of the rental unit or through a mail slot in the door,
- send it by fax to a fax machine where the tenant carries on business or to a fax machine in their home,
- send it by courier,
- send it by mail. (Add 5 days!)
You cannot provide the tenant this notice by posting it on the door of the rental unit.
Q: Can I provide the Notice more than 90 days in Advance?
A: YES! Absolutely.
Q: Can I deliver electronically?
A: Has your tenant completed the electronic communications form?
(INSERT CLICK FUNNEL TO CAPTURE EMAIL AND PROVIDE FORM FOR FREE)
PRO TIP: The Residential Tenancies Act was amended in 2018 allowing landlords the option of serving a tenant various documents through email. There are some restrictions and this agreement for email communication must be documented in writing by both parties. We suggest landlords document this using the Consent to Service by Email form.
Q: If there is more than one landlord/owner on title, can only one of these sign the N1 or do all owners have to so?
A: All names of all parties must be on the form, but only one landlord or a representative of needs to sign.
Q: Does the tenant have to pay the increased rent if the form is not given or filled out incorrectly?
A: No. This is why it’s so important to fill it out correctly!
-N1 Form Pdf Download: http://www.sjto.gov.on.ca/ltb/forms/
-General Info: https://www.ontario.ca/page/rent-increase-guideline#section-5-Rent Increase Guidelines (Ontario) https://www.ontario.ca/page/rent-increase-guideline#section-5