Rent Control Explained

What Is Rent Control

Rent control in Ontario limits how much a landlord can increase rent each year for certain residential rental units. For rent-controlled units, the annual increase is capped at the rent increase guideline published by the Ontario government, which is based on the Consumer Price Index and cannot exceed 2.5 percent.

Rent control does not mean that rent cannot go up. It means that rent increases are limited to the guideline amount unless the landlord obtains approval from the Landlord and Tenant Board (LTB)for an above-guideline increase.

The November 15, 2018 Cutoff

The key date for rent control in Ontario is November 15, 2018. Rental units that were first occupied for residential purposes before this date are subject to rent control. Units first occupied on or after this date are generally exempt from rent control.

This means that a brand new condo built in 2020 that has never been occupied before is not rent-controlled. The landlord can increase the rent by any amount, provided they give 90 days' written notice and do not increase more than once every 12 months. However, an older unit in a building that has been rented since 2010 is rent-controlled, and the landlord can only increase rent by the guideline amount.

The date that matters is when the unit was first occupied for residential purposes, not when the building was constructed or when the current tenancy began. If a unit was converted from commercial to residential use after November 15, 2018, it would be exempt from rent control.

Units That Are Exempt from Rent Control

• Units first occupied for residential purposes on or after November 15, 2018
• Units in buildings, additions to buildings, or new units in existing buildings occupied after November 15, 2018
• Community housing and certain non-profit housing
• Units where the tenant shares a kitchen or bathroom with the owner or owner's family

What Rent Control Means for Landlords

If your unit is rent-controlled, you are limited to the annual guideline increase. For 2024, that guideline is 2.5 percent. You cannot raise rent beyond this amount without an above-guideline increase approved by the LTB.

For rent-controlled units, the lawful rent follows the unit, not the tenant. When one tenant moves out and a new tenant moves in, the rent for the new tenant starts at the lawful rent, which is the previous rent plus any lawful increases that were properly applied. You cannot reset the rent to market rate between tenants.

This can create a significant gap between the lawful rent and the current market rate over time, especially in areas where market rents have risen quickly. Understanding this dynamic is important when evaluating rental properties as investments. For current rental pricing data, visit The Rental Market.

How to Determine If Your Unit Is Rent-Controlled

To determine whether your unit is rent-controlled, you need to establish when it was first occupied for residential purposes. For newly constructed buildings, this is typically the date the first tenant moved in. For conversions or additions, it is the date the new residential unit was first occupied.

If you are unsure, check with your municipal building department for occupancy permit dates, review the property's history with the previous owner, or consult a legal professional. Getting this wrong can result in charging unlawful rent, which tenants can challenge at the LTB.

The Broader Context

Rent control has been a politically debated topic in Ontario for years. Before June 2017, only buildings built before November 1, 1991 were rent-controlled. The Rental Fairness Act of 2017 extended rent control to all units. Then the More Homes, More Choice Act of 2019 removed rent control for units first occupied on or after November 15, 2018.

As a landlord, staying current on these rules is important because they directly affect your revenue and investment strategy. Whether your unit is rent-controlled or exempt shapes how you set rent, plan for increases, and evaluate your long-term return on the property.