Lease renewals and rent increases in Ontario: a practical guide

The Kera Team · Product · April 9, 2026 · 7 min read

Many landlords misunderstand what happens at the end of a fixed-term lease in Ontario. The short answer: it doesn't end. Under the Residential Tenancies Act, a fixed-term tenancy automatically converts to a month-to-month tenancy when the fixed period expires — unless the landlord and tenant sign a new fixed-term agreement. That month-to-month tenancy then continues under all the same terms until either party gives proper notice to terminate.

What actually happens when a lease 'expires'

Nothing dramatic. The tenant does not have to leave, sign a new lease, or do anything to remain. The rent, terms, and obligations of the original lease carry forward. As a landlord, you have no automatic right to require a new fixed term or increase the rent simply because the original term ended. The RTA's protections apply continuously.

Offering a renewal: fixed vs. month-to-month

You can offer tenants a new fixed-term lease, or let the month-to-month continue. A new fixed term gives you more predictability about when the unit may next turn over. A month-to-month gives the tenant more flexibility and may be what they prefer. Neither is automatically better — it depends on your situation and the tenant.

If you do offer a new fixed-term agreement, it should be on the Ontario Standard Lease (Form 2229E) with updated terms. The tenant is not obligated to accept a fixed term simply because you offer one.

Rent increases: the 90-day N1 rule

To increase rent on a sitting tenant in Ontario, you must give written notice using Form N1 (Notice of Rent Increase), available from the Landlord and Tenant Board, at least 90 days before the increase takes effect. This is a hard requirement — verbal notice, a letter, an email, and a text message are all insufficient. The form must be delivered.

Give N1 at least 90 days before the new rent date.
Rent can increase only once every 12 months.
For 2026, the provincial guideline is 2.1% — this is the maximum for most units.
New buildings, additions, or most new basement apartments first occupied after November 15, 2018, are exempt from the guideline; any amount can be charged with 90 days' notice.

Above-guideline increases

If extraordinary costs — major capital expenditures like a new roof or HVAC system, or significant increases in municipal taxes — justify an increase above 2.1%, you can apply to the LTB for an Above Guideline Increase (AGI) using Form L5. This is a formal process with supporting documentation requirements. It's not a shortcut, and landlords who use it should understand it takes time and paperwork.

Renewing versus turning over: the real calculation

Turnover has real costs that don't always show up in the spreadsheet: vacancy days, cleaning, repainting, small repairs, listing costs, and time. Before deciding to push a rent increase that risks a tenant leaving, it's worth estimating what turnover would actually cost. A tenant paying 2% below current market who stays reliably may generate more net income than a new tenant at market who moves in 45 days later.

Managing renewal notices: don't miss the window

The practical risk is losing track of when the 90-day notice window opens. If you manage multiple units with staggered lease dates, the windows don't line up neatly. A manual calendar system works until it doesn't. A system that tracks lease end dates and surfaces upcoming renewals automatically removes the risk of missing the window entirely.

Kera tracks lease end dates and upcoming renewal windows across your whole portfolio. When a notice window approaches, you see it — before it passes.

Does a fixed-term lease end automatically in Ontario?

No. Under the RTA, a fixed-term tenancy automatically converts to a month-to-month tenancy when the term expires. The tenant does not have to move out and does not need to sign anything to remain.

What is Ontario's rent increase guideline for 2026?

The Ontario government set the 2026 rent increase guideline at 2.1%, per the Ministry of Municipal Affairs and Housing. This is the maximum increase most landlords can apply to sitting tenants without an Above Guideline Increase application.

What happens if I give a rent increase notice with fewer than 90 days?

The notice is invalid. The LTB will not enforce a rent increase that was not given with the required 90 days' notice in the proper form. You would need to start the notice period again.

My building was completed after November 15, 2018 — am I exempt from rent control?

Under current rules, most new buildings and basement apartments first occupied for residential purposes after November 15, 2018, are exempt from the rent increase guideline. You can increase rent by any amount with the required 90 days' notice. However, the rules around exemptions can be nuanced — consult a paralegal if you're uncertain about your specific property.

Can I require a tenant to sign a new fixed-term lease at renewal?

No. Once a tenancy has converted to month-to-month, the tenant can choose to remain on that basis. You can offer a new fixed term, but you cannot require the tenant to accept it.