Navigating Ontario’s Landlord-Tenant Laws as an Investor

Ontario is known for having some of the most tenant-friendly laws in Canada, making it essential for real estate investors to understand their rights and responsibilities as landlords. Whether you’re renting out a single-family home, a duplex, or a multi-unit building, knowing how to navigate Ontario’s Landlord and Tenant Board (LTB) regulations is key to protecting your investment and maintaining a profitable rental business.

Here’s what investors need to know about Ontario’s landlord-tenant laws in 2025.

1. Rent Control Rules

Ontario has strict rent control regulations, but not all properties are treated equally.

Key Rent Control Policies:

• Properties Built Before November 15, 2018: Subject to annual rent increase limits set by the Ontario government (typically around 2-3%).

• Properties Built After November 15, 2018: Exempt from rent control, meaning landlords can set rent increases at market rates.

• Above-Guideline Rent Increases (AGI): Landlords can apply for an increase above the guideline for major capital repairs (e.g., new roof, HVAC upgrades).

Investor Impact:

If cash flow is a priority, newer properties are more attractive since they are not subject to strict rent control. However, older properties in prime locations can still be profitable if managed correctly.

2. Tenant Eviction Rules

Evictions in Ontario can be time-consuming and highly regulated, requiring landlords to follow proper procedures.

Valid Reasons for Eviction:

• Non-Payment of Rent: Landlords can file for eviction if rent is overdue, but the process takes time.

• Owner or Family Use: You can evict a tenant if you or an immediate family member need to move into the unit.

• Substantial Renovations: If major renovations require the unit to be vacant, eviction may be allowed (but the tenant has the right to return at the same rent after renovations).

• Illegal Activity or Property Damage: Tenants engaging in illegal activities or causing significant damage can be evicted through the LTB.

Investor Tip:

It’s crucial to document all tenant interactions and issue proper legal notices (e.g., N4, N12, N13 forms) to avoid disputes.

3. Lease Agreements and Tenant Rights

Ontario has a standard lease agreement that landlords must use for most rental properties.

Key Lease Agreement Rules:

• Fixed-Term Leases: After a lease term ends, it automatically converts to a month-to-month agreement unless a new lease is signed.

• No Evictions Without Cause: You cannot ask a tenant to leave just because their lease is up.

• Security Deposits: Landlords cannot ask for a damage deposit—only first and last month’s rent is allowed.

Investor Tip:

Always screen tenants carefully before signing a lease. Check credit reports, employment status, and rental history to avoid issues down the road.

4. Short-Term Rental Restrictions

Ontario has tightened short-term rental rules, especially in major cities like Toronto and Hamilton.

Key Short-Term Rental Regulations:

• Primary Residence Rule: Many municipalities only allow short-term rentals in an owner’s primary residence (not investment properties).

• Licensing Requirements: Some cities require Airbnb hosts to obtain a license and collect taxes.

• Fines for Illegal Short-Term Rentals: Cities like Toronto have increased enforcement, with fines for non-compliant properties.

Investor Tip:

If you’re considering short-term rentals, research local bylaws first. Long-term rentals remain a safer and more stable investment in Ontario.

5. Hiring a Property Manager vs. Self-Managing

Managing rental properties in Ontario can be complex, especially with tenant protections and legal requirements.

Should You Hire a Property Manager?

Yes, if:

• You own multiple properties or live far from your rental.

• You don’t want to deal with tenant issues, maintenance, or evictions.

• You need help navigating legal compliance and rent collection.

No, if:

• You prefer a hands-on approach and have time to manage tenants.

• You want to maximize cash flow by avoiding property management fees.

Property management companies typically charge 6-12% of monthly rent, but they can save landlords time and legal headaches.

Conclusion

Ontario’s landlord-tenant laws heavily protect renters, so investors must stay informed to avoid costly mistakes. From rent control and eviction rules to short-term rental regulations, knowing the legal landscape is key to maintaining profitability and minimizing risks.

Smart investors will screen tenants carefully, follow legal procedures, and consider property management to ensure a smooth and profitable rental business in Ontario.