Can Utilities Be Added to Rent After a Tenancy Begins?

Why this question comes up so often

It's fairly common for a tenancy to begin with certain utilities included in the rent — heat, hydro, water, or sometimes all three — and for a landlord to later want to shift some or all of that cost onto the tenant directly, whether by billing separately, installing individual meters, or simply announcing that a previously included service is being discontinued. Because this isn't always framed explicitly as a "rent increase," it can be unclear to both sides how the rules actually apply. The short answer under the Residential Tenancies Act, 2006 (RTA) is that removing or reducing an included service generally is treated as a rent increase in substance, even if it isn't labeled that way.

Why included services are generally treated as part of rent

The RTA generally defines rent broadly enough to include the value of services and facilities that come bundled with a tenancy — not just the base dollar figure written on a lease. When heat, hydro, water, parking, or another service is included as part of what a tenant receives in exchange for their payments, that service generally forms part of what the tenant is getting for their rent, even though it isn't a separate line item. This matters because it means a landlord generally cannot simply strip out an included service without that reduction being treated, in effect, as if the tenant's rent had gone up by the value of what was taken away.

Removing or reducing an included service mid-tenancy

Because reducing an included service is generally treated as an increase in substance, a landlord who wants to do this mid-tenancy generally has to follow the same rules that would apply to any other rent increase — proper written notice, the required notice period, and the 12-month minimum spacing since the tenancy began or the last increase. A landlord generally cannot simply announce that, starting next month, hydro will no longer be included, without this being treated as subject to those same constraints. In many cases, this kind of change also effectively functions as an above-guideline increase if the value of the lost service exceeds what the standard guideline percentage would otherwise allow, which can bring the more involved AGI process into play.

Why the dollar value of the service matters

Because removing a service is treated as equivalent to a rent increase of that service's value, the dollar amount actually matters quite a bit. If a landlord stops including, say, parking that was worth a modest monthly amount, the "increase" represented by that change might fit comfortably within the ordinary guideline. If a landlord stops including heat in a unit where heating costs are substantial, the value of what's being removed could easily exceed the guideline percentage, which generally means the change can't simply be implemented as an ordinary notice-based adjustment — it would generally need to go through the above-guideline process, or not happen at all without the tenant's agreement to a new arrangement.

Sub-metering and newly installed individual meters

A related and increasingly common scenario involves a landlord installing individual (sub-metered) utility meters in units that previously had utilities included in a bundled, unmetered way. Ontario has specific rules governing how sub-metering can be introduced, including requirements around tenant notice, consent in some circumstances, and how the transition is supposed to be handled so tenants aren't simply hit with a new direct utility bill on top of an unchanged rent, which would effectively double-charge for the same service. A landlord introducing sub-metering generally needs to follow this specific regulatory process rather than simply flipping a switch and sending the first bill.

Separate utility charges versus rent itself

It's worth distinguishing a tenancy where a utility was never included in the first place from one where it's being removed partway through. If a tenancy agreement was always structured so the tenant pays utility providers directly, there's generally no "removal" happening when a later utility bill arrives — that was simply the arrangement from the start, and it doesn't raise the same rent-increase analysis. The issue discussed in this article is specifically about a service that was included as part of rent at the start of the tenancy and is later taken away or shifted onto the tenant during an ongoing tenancy.

What a landlord generally cannot do

A landlord generally cannot remove an included utility and simultaneously charge the tenant directly for it without accounting for that change under the rent rules — doing so would, in substance, mean the tenant is paying both an unchanged rent and a new utility cost, which functions as an increase well beyond what was properly noticed or permitted. A landlord also generally cannot make this kind of change immediately or informally; the same notice period and timing restrictions that apply to a straightforward dollar-figure rent increase generally apply here as well.

If a service change happens to you

A tenant who's told that a previously included service is being removed or that a new utility charge is being introduced should generally treat this the same way they'd treat any other proposed rent increase — checking whether proper written notice was given, whether the required notice period and 12-month spacing were respected, and whether the value of what's changing fits within that year's guideline or was properly approved as an above-guideline increase. Keeping records of what was originally included — ideally from the original lease or move-in documents — generally makes it much easier to establish what changed and what it was worth if the issue ends up before the LTB.

It can also help to estimate, even roughly, what the lost service was actually worth on a monthly basis before deciding how to respond. A tenant who suddenly has to pay for their own heat in a poorly insulated older building, for instance, might find that cost is considerably higher than a landlord's informal estimate of its value, which can be relevant if the change is ever reviewed as an above-guideline increase in substance. Comparable units in the same building or similar buildings nearby, utility company estimates, or even a past winter's bills from a similar unit can all help establish a realistic figure.

What a landlord should do before changing included services

Landlords who are considering shifting utility costs onto tenants — whether through sub-metering, removing an included service, or restructuring how a building's costs are allocated — are generally better off planning the change well in advance rather than announcing it on short notice. This generally means identifying which notice and approval process actually applies given the value involved, preparing documentation showing how that value was calculated, and communicating clearly with affected tenants about what's changing and why. A landlord who skips this planning and simply announces a change risks having it treated as unenforceable, which can mean reversing the change, refunding amounts collected, or restarting the process from scratch — often a more costly and disruptive outcome than taking the time to do it properly in the first place.

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Reviewed by Ryan J. Manilla, BA, JD

Legal Reviewer · Landlord Tenant Ontario