How to File an Above-Guideline Increase (AGI) Application

Before you start: confirm an AGI ground actually applies

An above-guideline increase (AGI) lets a landlord apply to the LTB for a rent increase larger than the annual guideline percentage, but generally only on one of a limited set of grounds: an extraordinary increase in municipal taxes or charges, an eligible capital expenditure (such as a major, qualifying building-wide repair or replacement), or increased costs for security services provided to the complex. An AGI is generally not available simply because operating costs have risen in a general sense, or because a landlord wants to increase revenue — it's tied to specific, defined categories of cost. Our overview of what landlords must prove for an AGI explains each ground in more depth, and reviewing it before you begin is generally worthwhile, since the evidence required differs significantly between, say, a capital expenditure claim and a municipal tax claim.

Because an AGI application is generally a more involved and more heavily scrutinized process than a standard guideline increase, it's worth thinking early about scale: smaller property owners with a single eligible expense may find the administrative work of an AGI application disproportionate to the modest increase it could yield, while owners of larger buildings undertaking a significant capital project are more likely to find the process worthwhile. Weighing the likely approved amount against the time, cost, and documentation the application demands is generally a sensible first step before committing to the process.

Step 1: Serve an N2 notice of rent increase first

Before filing an AGI application, a landlord generally needs to serve tenants with an N2 notice of rent increase, following the same general notice requirements that apply to any rent increase: at least 90 days' written notice before the increase takes effect, using the correct form, and respecting the general rule that at least 12 months must generally have passed since the tenant's last increase. Our guide on rent increases in Ontario covers these baseline timing rules, which an AGI application sits on top of rather than replaces.

1. Confirm the proposed effective date is at least 90 days after the notice will be served.
2. Confirm at least 12 months have passed since the unit's last rent increase.
3. Complete and serve the N2 notice using an accepted method, keeping a dated record of service.

Because the AGI application and the N2 notice generally need to work together on a consistent timeline, it's often simplest to settle on the proposed effective date first, then work backward to confirm both the 90-day notice requirement and the AGI's own filing deadline are satisfied, rather than treating the two processes as entirely separate steps.

Step 2: Assemble the supporting evidence

The evidence required generally depends on which ground is relied on:

1. For municipal tax or charge increases, documentation showing the specific increase in the relevant tax or charge compared to the prior period.
2. For eligible capital expenditures, invoices, contracts, and proof of payment for the qualifying work, along with documentation showing the work meets the specific criteria for an eligible capital expenditure (such as its nature, scope, and expected useful life).
3. For security services, contracts and invoices showing the increased cost of the specific services provided to the residential complex.

Because the LTB generally scrutinizes whether claimed costs genuinely meet the specific legal definition of each category — particularly for capital expenditures, where ordinary repairs and maintenance generally do not qualify — organizing invoices and contracts clearly by category, with dates and amounts, tends to make the application considerably easier to assess. A useful general test for a capital expenditure claim is whether the work replaces or significantly extends the useful life of a major building system — a roof, elevator, or heating plant, for example — rather than simply restoring something to its prior working condition; the LTB generally treats the latter as ordinary maintenance that doesn't support an AGI on its own.

Step 3: File the L5 application with the LTB

An AGI is generally filed using an L5 application:

1. Create or log into the Tribunals Ontario Portal and select the L5 application for an above-guideline rent increase.
2. Identify the residential complex and the specific units affected, since an AGI generally applies at the building or complex level rather than to a single unit in isolation.
3. Select the specific ground(s) relied on and enter the supporting figures and calculations.
4. Upload the supporting invoices, contracts, and documentation gathered in Step 2.
5. Review the filing deadline carefully — an AGI application generally needs to be filed within a set window relative to the proposed effective date, so confirming this timing against the current rules before submitting matters.
6. Submit the application and retain the confirmation number and a copy of everything filed.

Keeping a running file of eligible costs throughout the year — rather than reconstructing invoices and contracts only once an application is being prepared — generally makes this step considerably faster, especially for a larger capital project that spans several contractors and payment stages over time.

Step 4: Understand the annual cap and carry-forward rules

Even where an AGI is approved, the increase a landlord can actually charge in a single year is generally subject to a cap above the standard guideline amount, with any approved increase beyond that cap generally eligible to be carried forward and applied in a future year or years. This means a large approved capital expenditure claim may generally need to be phased in over more than one year rather than applied all at once. Reviewing the rent increase calculator can help illustrate how a given guideline percentage and AGI approval interact for a specific unit, though any specific calculation should be confirmed against the current rules in effect at the time.

What happens after you file

Once filed, the LTB will generally schedule a hearing, and affected tenants are generally entitled to participate and challenge the claimed grounds, including whether the costs genuinely qualify under the specific category relied on. If the LTB is satisfied the application meets the requirements, it may approve some or all of the increase, subject to the annual cap and carry-forward rules, and may also impose conditions — for example, requiring that work be properly completed and maintained. The LTB hearing guide explains the general hearing process that applies to L5 applications as it does to other LTB matters.

Common mistakes that cause delay or rejection

A few recurring problems generally come up with AGI applications:

1. Treating routine repairs or maintenance as if they qualify as eligible capital expenditures.
2. Missing the specific filing deadline relative to the proposed effective date.
3. Failing to serve a proper N2 notice before or alongside the application.
4. Submitting incomplete or poorly organized invoices and contracts.
5. Overlooking the annual cap and assuming the full approved amount can be charged immediately.
6. Applying the increase to units it doesn't actually cover within the complex.

Because AGI applications generally involve detailed financial documentation and technical eligibility criteria, landlords should strongly consider working with an accountant familiar with the specific cost categories and a paralegal or lawyer experienced with LTB proceedings before filing.

Frequently Asked Questions

Related reading

Reviewed by Ryan J. Manilla, BA, JD

Legal Reviewer · Landlord Tenant Ontario