Renting out property in Ontario
Ontario has an annual rent increase guideline for most units, but units first occupied for residential purposes after November 15, 2018 are exempt from the cap. Landlords cannot take a damage deposit; the only rent deposit allowed is last month's rent, which earns interest each year at the guideline rate. Most new tenancies must use the Standard Form of Lease. The Landlord and Tenant Board (LTB) resolves disputes and is the only body that can order an eviction.
Rent increases
- Rent control
- Rent control: annual guideline applies to most units; units first occupied after November 15, 2018 are exempt from the cap
- How often
- Once every 12 months, counted from the start of the tenancy or the last increase
- Written notice
- At least 90 days' written notice on the LTB form (N1, N2 or N3). Exempt units still need the 90-day notice.
- Current guideline
- 2.1% for 2026. The 2027 guideline is 1.9%, for increases taking effect January 1 to December 31, 2027. Landlords can apply to the LTB for an above-guideline increase in some cases.
Security deposits
- Maximum
- A rent deposit of no more than one month's rent (one week's for weekly tenancies), used only for the last rental period. A refundable key deposit is also allowed. No damage deposits.
- Who holds it
- The landlord
- Interest
- Paid to the tenant every year at the rent increase guideline rate (2.1% for 2026). When rent goes up, you can ask the tenant to top up the deposit to the new rent, and the interest owed can be applied toward that top-up.
- Returning it
- The deposit is applied to the rent for the last month of the tenancy. It cannot be used for damage. If it is not used that way, it must be refunded.
- Pet deposits
- Not allowed. Only a last month's rent deposit and a refundable key deposit may be collected, and no-pet clauses in a lease are void.
Other essentials in Ontario
- Standard Form of Lease: required for most written residential tenancies entered into on or after April 30, 2018. Give the tenant a copy within 21 days of signing.
- Entry: at least 24 hours' written notice stating the reason and a time window between 8 a.m. and 8 p.m. No written notice is needed in an emergency or with the tenant's consent.
- Ending a tenancy: only for reasons in the Act, using LTB notice forms. Since September 21, 2026, an N4 for arrears gives monthly and yearly tenants seven days to pay (down from 14), and N12 compensation is not required if the termination date is at least 120 days after notice.
- Vital services: you cannot cut off heat (September 1 to June 15), electricity, fuel, or hot or cold water.
- Maintenance: you must keep units in a good state of repair even if the tenant knew of problems when renting. The LTB can order rent abatement or freeze increases.
How Propvara helps ON landlords
- Record the last month's rent deposit on each tenancy in tenancies and deposits so you can see what interest is owed each year.
- Rent change history with effective dates shows when the 12-month clock restarts. Province-aware rent increase checks and N1-style notices will compare increases against the guideline and the post-2018 exemption.Coming soon
- Timestamped photos and history on each repair case give you evidence for LTB hearings, including maintenance issues raised in non-payment cases.
- Standard lease templates with e-signature and notice-of-entry scheduling that notifies tenants (coming soon).Coming soon
Ontario landlord questions
What is Ontario's rent increase guideline?
2.1% for 2026 and 1.9% for increases taking effect in 2027. It does not cap units first occupied for residential purposes after November 15, 2018, though they still need 90 days' notice.
Can I collect a damage deposit in Ontario?
No. You can collect a last month's rent deposit of up to one month's rent and a refundable key deposit. The rent deposit can only be applied to the last month's rent.
Do I owe interest on the last month's rent deposit?
Yes. Pay interest every year at the guideline rate. When rent rises, you can apply that interest toward topping the deposit up to the new rent.
Can I refuse a tenant because of a pet?
The Act makes no-pet clauses in a lease void. You may be able to end a tenancy over a pet in some cases, such as when it causes serious damage, but only through the LTB process.
What changed for N4 and N12 notices in 2026?
As of September 21, 2026, monthly and yearly tenants have seven days (not 14) to pay after an N4, and you do not owe N12 compensation if the termination date is at least 120 days after notice.
Official sources
- LTB: A Guide to the Residential Tenancies Act
- Durham Region directive: Rent Increase Guideline for 2026 (PDF)
- Wellington County bulletin: 2027 Rent Increase Guideline (PDF)
- ONPHA: RTA changes under Bills 60 and 97 (PDF)
- Residential Tenancies Act, 2006
This guide is general information, not legal advice. Rules change; confirm with the Landlord and Tenant Board (LTB) or a lawyer before acting.
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