Above-Guideline Rent Increases in Ontario: The L5, Step by Step, for Landlords and Tenants

Ontario caps most yearly rent increases at the guideline. The L5 is how a landlord asks the Landlord and Tenant Board (LTB) to allow more — for one unit, several, or a whole complex — without needing every tenant's signature. Landlords turn to it after paying for major capital work, absorbing a steep municipal tax rise, or adding outside security. Tenants are notified and can take part. Expect heavy paperwork: L5s tend to fail on dates, eligibility or missing documents, seldom on the merits.

Quick summary

The three grounds for an AGI

Under s. 126 of the Residential Tenancies Act, 2006 (RTA), an above-guideline increase (AGI) can rest on:

Ground 1 — a tax spike. Municipal taxes and charges on the complex (or a building in it) rose by more than the guideline plus 50% of it — taking the guideline for the FED's calendar year (O. Reg. 516/06, s. 28). A 2.4% guideline would put the threshold at 3.6%.

Ground 2 — capital spending that qualifies. Think major, out-of-the-ordinary renovation, repair, replacement or addition, expected to last five years or more. It also has to serve one of these purposes (RTA s. 126(7)):

• [ ] keeping or restoring the complex physically sound;
• [ ] meeting your maintenance obligations;
• [ ] keeping plumbing, heating, mechanical, electrical, ventilation or air-conditioning systems going;
• [ ] making the building accessible to people with disabilities;
• [ ] saving energy or water;
• [ ] keeping or making it secure.

Excluded (O. Reg. 516/06, s. 18): routine upkeep, and anything mainly cosmetic or aimed at prestige or luxury.

Ground 3 — outside security. Contracted security (not your own staff), newly added or now costing more.

Proof of the statutory elements usually obliges the Board to approve an increase — Guideline 14 rules out weighing the tenant's personal finances. But under RTA s. 126(12)–(13) it may deny or suspend the increase for any unit hit by a serious ongoing maintenance failure, open work orders, or open elevator orders.

How much, and how fast: the 3% cap

Capital and security together can add no more than 3% over the guideline in a 12-month period. Anything justified above that is phased: 3% in year one, and up to 3% in each of the two years after (RTA s. 126(11)). Beyond three instalments, it's unrecoverable. Taxes sit outside the cap — that share can all be taken in year one (O. Reg. 516/06, s. 33(4)).

Example. Suppose an order justifies 7.5% for a new roof and windows, plus 1.2% for a tax increase. The tax piece (1.2%) can come in year one along with 3% of the capital piece; another 3% follows in year two and the remaining 1.5% in year three.

Two more rules:

• Use it or lose it. Every instalment has a 12-month window fixed by the order; partial or skipped instalments can't be made up (O. Reg. 516/06, ss. 32–33).
• The rent comes back down. Capital orders carry a future date — when the work's weighted useful life ends — on which rents of tenants still in place drop by the capital percentage (RTA s. 129).

Limits on the L5

• Exempt units. RTA s. 6.1 takes s. 126 away from units in buildings or additions with no residential occupancy on or before November 15, 2018, and from some later second units in houses.
• Later tenancies. A unit whose present tenancy agreement began once the work was already finished can't be charged for it (s. 126(9)).
• New tenants near the FED. A tenancy agreement beginning on or after the 90th day before the FED takes that unit out of the order (s. 126(14)).

Before you file: is an L5 the right route?

• A signed deal might be simpler. Certain capital projects or new services can be covered by an N10 the tenant signs, up to guideline + 3% (RTA s. 121). Units with an N10 drop out of the L5.
• Was replacement really needed? If the old system or item didn't call for major repair or replacement, the new one only counts when it improves accessibility, saves energy or water, or adds security (s. 126(8)). Freshening a suite to re-rent it, cosmetic upgrades and fixing appliances stay out.
• Utilities? Dropped as an AGI ground for applications from January 1, 2018 onward. Three grounds survive: taxes and charges, capital work, security.
• Security by your own people? A superintendent or other employee can't be claimed.

Deadlines

1. The 90-day rule (RTA s. 126(3)). Count back 90 days from the FED; that's your filing deadline and the anchor for everything else. Missed it? Pair the L5 with a Request to Shorten Time — refusal means no L5.
2. The 18-month window for capital work (O. Reg. 516/06, s. 26(2)). Finish date must fall in the 18 months leading up to the filing deadline. Guideline 14 reads "completed" physically. Separately, by filing day the bill must be "incurred" — fully paid except any statutory construction holdback (s. 18).
3. Accounting years (s. 19). Taxes: base year = most recent complete calendar year before the deadline; reference year = the year prior. Security: base year = any 12-month accounting period you pick, ending by the deadline. A prior AGI order for the complex locks in the base year's start and end days.
4. The N1. Ninety days' written notice to every tenant, AGI order or not (RTA s. 116(2)), and at least a year since that tenant's last increase or move-in (s. 119).
5. Service after filing. Only if directed: oral hearing → no later than 30 days before it (Rule 5.7); written hearing → inside 20 days of the Board's notice (Rule 5.6). Certificate of Service five days after (Rule 5.15).

Worked example. A landlord wants the first increase on Monday, March 1, 2027.

Filling in the L5 (version 2025/09)

Work through it with the official L5 instructions beside you.

Step 1 — Language and accommodation. Pick a language. Accommodation needs go on their own request form, not the L5.

Step 2 — Part 1: General Information.

• Complex address: street, city, postal code. A unit number only if just one unit is involved. More than one street address → the Additional Residential Addresses form, one full address each.
• Tenants: not on the L5. They live in the L5 – Rental Unit Information form spreadsheet.
• FED: DD/MM/YYYY; the order, if granted, reaches back to it.
• Previous Order: the latest AGI file number for this complex, if one exists.
• Landlord: corporations use the "Company Name" line; co-landlords go on a Schedule of Parties. The "Email" box is consent to email service on behalf of all applicants.

Step 3 — Part 2: Reasons for Your Application. Shade any of the three reasons — 1 taxes/charges, 2 security, 3 capital. Give two counts: units in the whole complex, and units this L5 covers. The RUI's Summary tab must agree; where it doesn't, the RUI wins.

Step 4 — Part 3: Outstanding Elevator Work. Tenant elevator in the building? Then disclose any work order, Technical Standards and Safety Act, 2000 s. 21 order or LTB repair order, and whether it's done. Open elevator work of any kind — compliance date passed or not — gets summarized on Schedule 3 (RTA s. 126(3.1)).

Step 5 — Part 4: Signature. Landlord or legal representative; representatives include LSO number and contact information.

Step 6 — Schedule 1: Details of Operating Costs (Reasons 1 and 2).

Step 7 — Schedule 2: Details of Capital Expenditures (Reason 3).

• A. Costs: per item — number, description, completion date (per the instructions, when the finished work was paid in full), useful life, labour / materials / contract amounts, your own labour at a reasonable hourly rate (not management time), total. Useful life is read from the Schedule to O. Reg. 516/06: listings below 10 years become 10, used items lose their prior years, and leased assets are valued at market value when the lease began.
• Eligibility: map each item to its s. 126(7) category and justify it.
• B. Excluded units: only where a unit gains nothing from a specific item (one suite's new stove, for instance). Building-wide items like a roof: leave blank.
• C. Was it worn out?: did the old item need major repair or replacement, and when was it last replaced? If no, show the accessibility, conservation or security gain.
• D. Offsets: insurance recoveries, government grants, forgivable loans, trade-in/salvage/resale money — all subtracted.
• E. Non-residential share: handled as in Schedule 1, Part C.

Step 8 — Capital Expenditures: Additional Details (one per item). A ledger for each item: every invoice on a line, how and when it was paid (cheque number included), the amount, and the portion belonging to this item. The column must add up to the Schedule 2 figure. File your invoices and payment proof in matching order.

Step 9 — The RUI (Excel). Tenant Information tab: all residential units, in sequence. One row per tenant name. Then the street address; covered — Yes or No; full current rent, parking and other separately charged services included; payment frequency; and, for covered units whose tenancy began inside the 18 months before the deadline, that start date. Vacant: $0.00. Capital claims list uncovered and vacant units as well. File name = complex address + FED.

Sending it in

Email route. Everything — L5, schedules, Excel RUI, evidence, a CEAD for each item — to AGIpayments@ontario.ca, subject line showing the complex address and FED. A secure payment link comes back; it's dead after three calendar days. Card numbers never go in email.

Paper route (mail, courier, ServiceOntario). The application and evidence on paper; for capital claims, a second full photocopy set; and the evidence electronically too (email it, or a USB stick). The RUI is still emailed to AGIpayments@ontario.ca on its own. Payment: certified cheque or money order made out to the "Minister of Finance", or Visa/Mastercard on the Credit Card Payment Form. ServiceOntario alone takes cash or debit.

Fees are posted on the LTB fees page, and they're non-refundable. A Fee Waiver Request exists for those who can't pay.

Tenants' access to the materials (capital-expenditure claims). Landlords must explain how tenants can see the evidence: a free PDF on request, or paper copies at reasonable out-of-pocket cost by agreement, and — where the landlord has an office in or near the complex — a viewing copy there in business hours (O. Reg. 516/06, s. 23).

For tenants: what an L5 means for you

• [ ] An N1 is still required. Without 90 days' written notice the increase is void (s. 116(4)). The N1 includes a box flagging the AGI application.
• [ ] Pay the smaller figure for now. Pending the order, tenants owe whichever is lower: the N1 amount or the guideline amount (s. 126(5)).
• [ ] Request the evidence. Capital claims come with a right to a free PDF of the landlord's materials.
• [ ] Compare dates. Moved in after the work was done? That item can't land on your rent (s. 126(9)).
• [ ] Speak up about repairs. Serious current maintenance failures and unfinished work or elevator orders can stop or pause the increase for affected units.
• [ ] Know your written-hearing window. Fifty days from a notice of written hearing to respond (Rule 11).
• [ ] Late orders. If the order arrives long after the FED, retroactive amounts may be spread over as many as 12 months.

Why L5s are refused or dismissed

1. Short on time. Under 90 days before the FED, with no successful Request to Shorten Time, means no L5. Watch Rule 4.8: posting date isn't filing date — mail counts on the fifth non-holiday day afterward, courier on the next business day.
2. An incomplete package. No RUI, a missing CEAD or no extra copies: the instructions say incomplete applications are refused. Evidence left out may be excluded later, and Guideline 14 warns that more time "will rarely be granted" when the landlord's own neglect is to blame.
3. Old or unpaid work. Finished before the 18-month window, or not fully paid at filing (holdback aside) — disallowed. Splitting a project into phases won't drag earlier work inside.
4. Ineligible work. Painting, new floors for re-renting, routine elevator maintenance, appliance repairs, swapping a working item for the same thing with no conservation, accessibility or security gain — expect them struck.
5. Charging newer tenants. s. 126(9) shields units whose tenancy began after the work; leaving the tenancy start date blank on the RUI is how mistakes happen.
6. Undisclosed offsets. Insurance, grants and rebates must come off the cost. Concealing them damages credibility, and false or misleading filings are an offence.
7. Open elevator or repair problems. A missing Schedule 3, or a serious current breach, can mean dismissal for affected units or an increase deferred until fixed (s. 126(13)).
8. In-house security. Not claimable.
9. No valid N1. Void increase (s. 116(4)), order or no order.
10. Service failures. Directed to serve and didn't? Dismissal is possible (Rule 5.17). Skip a capital case's case management hearing and the file may be treated as abandoned (Guideline 14).
11. An exempt building. Post-November 15, 2018 units under s. 6.1 fall outside s. 126.

After filing

• Screening and hearing type. Paper hearings are typical for tax and security cases; capital cases usually get an oral hearing preceded by case management.
• Written timelines (Rule 11). Fifty days for tenant responses after a notice of written hearing; sixty-five for the landlord's reply.
• Settlements. Mediated deals top out at guideline + 3% (RTA s. 194(3)).
• Retroactive amounts. An order issued three or more months past the FED can let tenants catch up over a period of up to a year.
• Serving the order. Where you're directed to serve it: seven days from issue, then five days to file proof of service.
• Review. Fifteen days to request one, for orders from July 1, 2026 (Request to Review an Order).

What's changed

• July 1, 2026 (Bill 60): the review window shrank to 15 days (was 30) for orders from that date (Rule 26.5) — which in turn cut the time to serve a directed AGI order to 7 days (from 14), with proof of service due 5 days later.
• September 21, 2026: new Rules of Procedure, but no new L5; the 2025/09 form and the November 2025 instructions remain current.
• Unchanged: grounds, the 90-day rule, the 18-month window, the 3% cap. Section 126 in the consolidated RTA in force from September 21, 2026 reads as it did in 2017.

Questions people ask

What's the most an AGI can add to the rent?

Tax-driven increases have no set ceiling. Capital and security increases above the guideline are held to 3% per year across a maximum of three years, so 9% is the outer limit; anything beyond it is forfeited.

Is the L5 available on the Tribunals Ontario Portal?

No. Choose email (AGIpayments@ontario.ca), post, courier or a ServiceOntario counter; the RUI is emailed as an Excel file either way.

If the landlord files an L5, do tenants still get an N1?

Yes — ninety days ahead, for every tenant, even when an AGI order authorizes the increase. There's a box on the N1 to flag the pending AGI.

A landlord renovated a vacant unit before re-renting it. Can that go into an L5?

Not as against the incoming tenant: s. 126(9) blocks charging a unit whose tenancy started after completion. And cosmetic or luxury work wouldn't qualify in the first place.

The order has issued and the tenant hasn't paid the AGI amount. What now?

With a proper N1 for the higher rent, the tenant owes the shortfall from the FED onward. When the order came three months or more after the FED, the Board may allow repayment in instalments over as long as 12 months.

Official sources

• Form L5 – Application for a Rent Increase Above the Guideline (PDF)
• L5 Instructions
• L5 – Rental Unit Information (RUI) form (Excel)
• Additional Residential Addresses form
• LTB Forms, filing and fees
• Residential Tenancies Act, 2006, s. 126
• O. Reg. 516/06 (General)
• Interpretation Guideline 14: Applications for Rent Increases above the Guideline
• LTB Rules of Procedure
• LTB Operational Update, July 1, 2026

Last reviewed October 31, 2026. General information, not legal advice for your situation. Always use the current version of the form from the LTB.