If you're going to be a landlord in the Greater Toronto Area, the Residential Tenancies Act and the Landlord and Tenant Board set the rules — and you need to know them before you buy. From mandatory leases to rent deposits to notice requirements, Ontario's residential tenancy law is strict, tenant-protective, and enforced rigorously. This guide walks you through the essentials every GTA investor should understand.
The Ontario Standard Lease (Mandatory)
You must use the Ontario Standard Lease form for every private residential tenancy in Ontario, regardless of the property's age, the length of the tenancy, or any custom amendments you might want to make. This is not optional.
The Standard Lease exists to protect tenants by ensuring they receive a uniform, government-approved document that clearly states all the key terms: rent amount, payment schedule, unit address, term, and the landlord's and tenant's respective rights and obligations. If a tenant asks you for a copy in writing and you don't provide it within 21 days, the tenant may withhold one month's rent—a lesson that will cost you far more than printing a form.
You can download the current Standard Lease form directly from Tribunals Ontario's website. Do not use an "improved" version or a template from a property manager until you've verified it complies with Ontario law. Many lease templates online are outdated or include clauses that Ontario law explicitly forbids (like damage deposits or early-termination penalties). If your lease violates the Residential Tenancies Act, those offending clauses are void anyway, and you've created legal confusion for no benefit.
Pro tip: Provide the lease at signing, get the tenant's signature, and keep a signed copy in your file. This dated proof matters if a dispute later arises over what the tenant knew was required.
Deposits & Rent: What You Can Collect
Ontario law is explicit: the only deposit a landlord may collect is a rent deposit (also called a "last month's rent" deposit), and it must equal no more than one month's rent.
What a Rent Deposit Is (and Isn't)
A rent deposit is held by the landlord and applied as rent for the last period of the tenancy—typically the final month, or the final week if it's a weekly tenancy. It is not a damage deposit. It is not a security deposit. If the tenant moves out and leaves the unit in poor condition, you cannot use the rent deposit to cover repairs; you must pursue a separate claim through the LTB for damages.
Damage deposits and security deposits are forbidden in Ontario. If a tenant offers to pay them, or a former landlord collected them, that money does not belong to the landlord. Refusing to collect damage deposits is not a negotiating point—it is the law. If you attempt to collect one, the tenant can file a complaint with the LTB.
Interest on the Rent Deposit
Each year, the landlord must pay the tenant interest on the rent deposit at a rate equal to the annual rent increase guideline for that year. For 2026, that rate is 2.1%. This interest compounds annually and must be credited to the tenant's account. Many landlords forget this obligation; tenants do not, and they will remind you.
Moving the Deposit Forward
If a tenancy ends and you re-rent the unit to a new tenant, the rent deposit does not automatically transfer. The deposit is returned to the outgoing tenant (minus any lawful deductions, if applicable—though remember, you cannot deduct for damage). The incoming tenant must provide a new rent deposit for their tenancy.
Rent Increases: Timing, Notice & the 2.1% Guideline
In 2026, the maximum rent increase you may apply without LTB approval is 2.1%. This is the guideline set by the Ontario government for most rental units in the province.
Who Is Subject to the Guideline
Most rental units in Ontario are subject to the rent increase guideline. You may increase a tenant's rent by up to 2.1% in 2026, provided you follow the notice requirements.
However, units first occupied after November 15, 2018 are exempt from the guideline. This includes:
New buildings where the first tenant occupied a unit after November 15, 2018
Additions to existing buildings (if the new unit was first occupied after that date)
Most newly created basement apartments or second suites (if they were first occupied after that date)
Units in residential buildings that underwent substantial renovation if any unit was first occupied after that date
This exemption is significant for investors evaluating newer buildings. If your rental unit is exempt, you may increase rent to any amount upon a change of tenant (at the end of the lease term), or negotiate in-tenancy increases without restriction—provided you follow the notice rules. You cannot arbitrarily raise the rent mid-term without the tenant's agreement, but you have far more flexibility than you would for an older, guideline-controlled unit.
Notice Requirements
You must give 90 days' written notice before a rent increase takes effect. The notice must be in writing. Email is acceptable if the tenant has agreed to electronic service. Text message or verbal notice is not enough.
You may only increase rent once every 12 months. If you served a notice of rent increase effective January 15, 2026, you cannot serve another notice effective before January 15, 2027.
The 90-day notice period starts on the day the tenant receives it. If the tenant refuses to accept the notice, you should serve it by registered mail or have a copy left at the rental property and keep a record of how and when you served it. When the time comes, document your proof of service carefully.
Ending a Tenancy: Key Notices
Ending a residential tenancy in Ontario requires serving the correct notice form to the tenant, waiting the prescribed notice period, and then filing an application with the LTB if the tenant does not leave voluntarily.
N4: Non-Payment of Rent
An N4 notice is served when a tenant has not paid rent. It gives the tenant 14 days from the date the notice is received to pay the full arrears (past rent owing) plus any outstanding charges, or you may pursue eviction.
Important note: Bill 60 proposed shortening the N4 notice period to 7 days. As of June 2026, that change is not yet in force. The current notice period remains 14 days. Before you use the form, confirm this on Tribunals Ontario's website, as legislation may have changed.
After the 14 days expire, if the tenant has not paid and you have not agreed to a payment arrangement, you may file an L1 application with the LTB to evict the tenant and collect the arrears. The LTB will schedule a hearing (expect several months of waiting, given the current backlog).
N12: Landlord or Purchaser's Personal Use
An N12 notice is served when you (the landlord) intend to move into the rental unit for your own use, or when a purchaser of the property intends to occupy it. The notice period is typically 60 days (two months), starting from the date the tenant receives it.
Compensation is required. When you serve an N12, you must offer the tenant compensation equal to one month's rent. This is a legal obligation, not a negotiation. The tenant may choose to accept the compensation and leave, or refuse and require you to pursue an LTB application.
Important note: Bill 60 proposed removing the requirement for N12 compensation. As of June 2026, that change is not yet in force. The current rule is that you must compensate the tenant with one month's rent. This is the law you must follow.
Other Notices (High-Level Overview)
The N1 form is used for a regular rent increase within the guideline (or above the guideline, if the unit is exempt). We covered N1s under "Rent Increases" above.
The N5 notice is served for tenant-caused damage or illegal activity in the unit.
The N6 notice is served when a tenant has committed an illegal act or is misrepresenting their income to obtain or keep a rental unit. Note: there is no requirement to serve a notice simply because a fixed-term lease is ending — a fixed-term tenancy automatically converts to a month-to-month tenancy if neither party takes action.
These are complex, and serving the wrong form or failing to follow the notice period can result in the LTB dismissing your application. If you are unsure which form to use, consult a lawyer or paralegal licensed in Ontario.
The LTB Reality: Backlog & Timelines
Serving a notice and filing an application are only the first steps. The Landlord and Tenant Board has a significant backlog, and hearing times are slow.
Current estimates suggest 3 to 7 months between filing an eviction application and receiving a hearing date. This is roughly three times longer than pre-2020 levels, when cases were resolved in 3 to 7 weeks. The LTB is working through its backlog, but it remains substantial.
What does this mean for you? If a tenant stops paying rent in January 2026, you serve an N4, wait 14 days, file an L1 application, and then wait an estimated 3–7 months for a hearing. Only then will the LTB make an order. If the tenant does not leave voluntarily after the order, you may need a sheriff to enforce it. You cannot "self-help" evict (lock the tenant out, remove their belongings, etc.). Every step is formal and slow.
This timeline is one of the most important realities for any GTA investor to understand. Eviction is not a quick solution to a problem tenant. Budget for 6–12 months of vacancy, lost rent, and legal costs if you end up in an LTB dispute. Vet your tenants carefully at the beginning to avoid this scenario.
Frequently Asked Questions
Can I charge a damage deposit if I call it something else?
No. Ontario law forbids any security deposit, damage deposit, pet damage deposit, or any other form of deposit other than the last month's rent deposit. No amount of relabelling changes this. If you collect one, the tenant can file a complaint with the LTB, and you will be ordered to return it—plus interest and possibly damages. Do not attempt this.
What if the tenant breaks the lease before the agreed end date?
The tenant has the right to end the tenancy, but the lease does not disappear. If you do not re-rent the unit, the tenant remains liable for rent until the original lease end date or until the LTB makes an order. However, you (the landlord) must make reasonable efforts to mitigate your loss—in practice, this means you should market the unit and try to find a new tenant. If you can re-rent it, the original tenant's liability ends. If you choose not to re-rent it, the original tenant can still be held liable.
Can I raise rent if the tenant hasn't paid in full?
You can still serve a rent increase notice, but it is not a practical enforcement tool. The proper tool for non-payment is the N4 notice and L1 application, which we covered above. Combining a rent increase notice with rent arrears creates confusion and may complicate an LTB hearing if you end up there.
What happens at the LTB hearing?
Both you and the tenant present your case. You will need to bring evidence: lease agreement, payment records, copies of notices served, photos of damage (if applicable), records of repair attempts or lockout incidents, and so on. The LTB member will ask questions. If the LTB member believes you have proven your case (e.g., non-payment, or grounds for an N12), they will issue an order. If you win, the order typically requires the tenant to pay arrears and interest, or to vacate by a certain date, or both.
Can the LTB suspend or modify an eviction order?
Yes. If the tenant files a motion to suspend or void the order (e.g., they claim they have now paid the arrears), the LTB can suspend the eviction. Many LTB orders include a "unless" clause: evict the tenant unless the tenant pays the arrears by a specific date. If the tenant pays, the eviction order is stayed. If they don't, the eviction proceeds.
What records should I keep?
Keep everything: the signed lease, proof of service of any notices, rent payment records (cancelled cheques, bank statements, or receipts), photos of unit condition at move-in and move-out, copies of all communication with the tenant (emails, text messages, written letters), records of repairs you performed or arranged, and any LTB-related documents (applications, orders, hearing records). The LTB will ask for them if a dispute arises, and absent documentation, your word is your evidence.
Is this content legal advice?
No. This content is for general informational purposes only and does not constitute legal, tax, or financial advice. Landlord-tenant law in Ontario is complex, and the rules change periodically. Always consult a lawyer or paralegal licensed in Ontario before serving a notice, filing an LTB application, or making significant decisions about your rental property. An hour with a legal professional can save you months of delay and thousands in lost rent.
Who Is Inna Gold?
Inna Gold is a REALTOR® and investor advocate serving the GTA since the mid-2010s. She specializes in helping investors navigate the Ontario rental market, understand the economics of multi-unit and second-suite strategies, and close purchases with confidence.
"I pride myself for being knowledgeable and invested in real estate; keeping up with market trends and having my clients' best interests at heart. I master negotiation and never push my clients beyond their comfort levels. Real estate is a true passion of mine. I want to help everyone find their dream home and have the best experience throughout the journey." — Inna Gold, REALTOR®, RE/MAX Experts
Inna Gold, REALTOR® RE/MAX Experts — 277 Cityview Blvd Unit 16, Vaughan, ON L4H 5A4 Cell: 416-500-0696 | Office: 905-499-8800 info@innagold.com | innagold.com
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