Tougher Rules for Above-Guideline Rent Hikes

Summary#

Bill 82 changes how landlords in Ontario can raise rent above the annual cap for major building work, known as an “above guideline increase” (AGI). It aims to block AGIs for cosmetic or routine work, make landlords prove big repairs are truly needed, consider tenant hardship, and roll back the AGI portion after a set period.

• Landlords must file engineering or professional reports and extra proof when asking for an AGI due to capital work (big, long‑term repairs or replacements).
• Cosmetic upgrades, luxury add‑ons, and routine maintenance cannot be used to justify an AGI.
• The Landlord and Tenant Board (LTB) must consider tenant hardship, local vacancy rates, and local rent pressures, and can deny AGIs that would cause undue hardship.
• Costs from deals with related companies (not “arm’s length”) and costs covered by government grants or rebates cannot be passed on through AGIs.
• AGIs tied to capital work become temporary: on a set future date, the AGI portion must come off the rent, and landlords must give 30 days’ notice or pay tenants 1.5 times any overpayment.
• The LTB can pause or dismiss AGI applications for any breach of landlord duties, not just “serious” breaches.
• New rules start four months after the bill becomes law; older applications continue under the old rules.

What it means for you#

• Tenants

  • Fewer surprise AGIs. Cosmetic jobs (like new lobby finishes) and routine fixes (like regular appliance or elevator servicing) cannot trigger an AGI.
  • Stronger proof required. For big repairs, landlords must show a professional report that the work is needed for safety, structure, or vital services (like heat, water, or electricity).
  • Tenant hardship matters. If you already spend a high share of income on rent, or your area has low vacancy and high rent pressure, the LTB can deny the AGI.
  • No double charging. If the landlord got a grant or rebate for the work, that cost cannot be added to your rent.
  • Fair pricing. Costs from a related company the landlord controls (not an “arm’s length” deal) cannot be used to raise your rent.
  • Temporary AGI. The rent increase due to capital work will come off on a set future date. Your landlord must give at least 30 days’ notice of that date. If you overpay because they did not notify you, they must refund 1.5 times the overpayment.
  • More leverage if your landlord is in breach. The LTB can stop or dismiss AGI requests if the landlord has not met their duties to repair and maintain, even if the breach is not labeled “serious.”

• Landlords

  • More documentation. AGI applications for capital work must include a professional report and evidence the work is necessary, not cosmetic or routine, and not just normal end‑of‑life replacement. If replacing instead of repairing, you must explain why that is reasonable.
  • Arm’s length costs only. You must show the spending was through a true third‑party deal. Related‑company markups cannot be included.
  • Government‑funded portions excluded. Any part paid by a grant, rebate, or subsidy cannot be passed to tenants.
  • Tenant impact test. Expect the LTB to weigh tenant income share, local vacancy, and rent pressures. The Board may deny an AGI that would cause undue hardship.
  • Temporary nature of AGIs. The AGI portion will be removed on a date set in the order, and you must notify tenants 30 days in advance.
  • Compliance matters. Any breach of repair and maintenance duties can lead the LTB to dismiss or pause your AGI application.

• Landlord and Tenant Board

  • Must review added evidence, apply a tenant hardship test, exclude certain costs, and set the reduction date for the AGI portion of rent.

• Timing

  • New rules take effect four months after Royal Assent. AGI applications already filed before that date stay under the old rules.

Expenses#

No publicly available information.

Proponents' View#

• Protects renters from unfair rent hikes by blocking AGIs for cosmetic or routine work and by requiring solid proof for major repairs.
• Puts tenant affordability at the center. Considering income share, vacancy, and local pressures helps prevent displacement.
• Stops double‑billing. Excluding government‑funded costs and related‑party markups keeps AGIs tied to real, necessary expenses.
• Makes AGIs temporary, so tenants are not stuck with permanent increases after capital costs are recovered.
• Strengthens accountability. Allowing AGI applications to be dismissed for any breach encourages proper maintenance and compliance.

Opponents' View#

• Adds red tape and cost. Engineering reports and extra documentation may be expensive and slow down needed repairs.
• Could discourage building upgrades. Narrowing what counts as eligible capital work and adding a hardship test may reduce investment in older buildings.
• Temporary AGIs may not cover costs. Requiring the AGI portion to come off later could make financing large projects harder, especially for small landlords.
• The hardship test may be subjective. Different outcomes across cases could create uncertainty and more disputes.
• Excluding related‑party costs could burden small owners who use affiliated contractors and may raise administrative costs to prove “arm’s length” deals.