Ontario N2: Raising Rent in Social, Non-Profit and Other Partially Exempt Units

Some Ontario rentals sit outside rent control but inside the rest of the Residential Tenancies Act (RTA). To raise rent in one of them, the landlord serves the N2 Notice of Rent Increase (Unit Partially Exempt), a Landlord and Tenant Board (LTB) form. Most of these units are social, non-profit or other publicly assisted housing. No guideline limits how much the rent goes up, yet in the usual case the 90-day written notice and the one-year gap between increases still apply.

Quick summary

Why "partially" exempt

For these units the RTA turns off the rent-control sections and leaves everything else running. The two lists to check:

RTA s. 7(1), which covers:

1. federally owned or operated units;
2. housing projects of a local housing corporation or service manager that have been designated;
3. non-profit housing built under a prescribed program that operates under the Housing Services Act, 2011 or a qualifying agreement;
4. co-op units (non-profit) whose occupants are not members;
5. student or staff housing supplied by an educational institution;
6. units a religious institution operates, on a non-profit basis, for a charitable purpose.

None of these units is subject to s. 120 (the guideline) or to the above-guideline increase rules.

O. Reg. 516/06, s. 6, which covers units built or bought under named affordable-housing programs that satisfy s. 6(2). Examples include the Canada-Ontario Affordable Housing Program and municipal capital facility by-laws. The Rural and Native Rental Housing Program is on the list too.

The N2 announces the new rent and explains to the tenant that, with no guideline in play, the landlord may increase the rent by whatever amount it chooses.

Picking the right notice

The N2 belongs with the units listed above. Its instructions mention, as examples, non-profit and other social housing, including care home units exempt from the limits on rent increases.

Other forms cover other cases:

Exceptions that switch the cap back on

Section 7 contains two:

• Different landlord. Federal and service-manager projects lose the exemption where the tenant pays rent to a landlord other than the project's (s. 7(4), (5)).
• No consultation. For student or staff housing with a residents' council or association, failing to consult that body about the increase brings back rent control (s. 7(6)).

Newer buildings (post-November 15, 2018)

The N1 instructions route any unit without a cap on increase size to the N2, and RTA s. 6.1 units have no cap. But the N2's own instructions were written in May 2017, ahead of s. 6.1, and only describe social and non-profit housing. No published LTB guidance resolves which notice a s. 6.1 unit should get. Either way, use an approved form that gives 90 days or more of written notice (s. 116), and check with the LTB first.

For tenants

If you got an N2, first ask whether your unit really is partially exempt. If it is rent-controlled, or one of the two exceptions above applies, any amount over the guideline is unlawful. Then check the timing: in most cases you are owed 90 days' written notice and a year between increases. If you pay rent geared to income in one of the social housing categories, though, an increase caused by your own income going up needs no notice and is not limited to once a year.

Timing rules

The 90 days. Section 116 covers partially exempt units too. Give 90 days or more in writing, with five extra days for mail (s. 191(3)). It cannot be reduced by the Board (O. Reg. 516/06, s. 56).

The one exception, and the reason the form says "where applicable": a tenant on rent geared to income whose earnings increased, living in a reg. s. 6 unit or a unit within paras. 1 to 4 of s. 7(1), can see the rent go up with no notice at all (O. Reg. 516/06, s. 6(5); RTA s. 7(3)).

The 12 months. Section 119 usually applies. It does not apply in two groups:

• tenants paying rent geared to income in s. 7(1) paras. 1 to 4 units or reg. s. 6 units;
• student housing, staff housing and religious-charitable housing (O. Reg. 516/06, s. 6(4); s. 7(2)).

Example: a market-rent tenant in a non-profit building had a rent increase take effect on April 1, 2026. The next increase can start no earlier than April 1, 2027, and the N2 has to be handed over by January 1, 2027 (or mailed by December 27, 2026) to give 90 days.

Completing the N2

It is a single page; the current version is 01/04/2022.

• To: (Tenant's name and address). Each tenant, with a mailing address if it differs.
• From: (Landlord's name and address). Each landlord, with a mailing address.
• Address of the Rental Unit. The street address plus unit and postal code.
• Your New Rent. Three blanks: "On dd/mm/yyyy" (the start date), "your rent will increase to $" (the whole new rent), and "per month / week / other" (the rental period). Per the form, separately billed services form part of the rent; in a care home, meals and care services do not.
• Important Information About the Law. Pre-printed; keep it as is.
• Signature. Shade Landlord or Representative, print name and phone number, sign, date. Representatives complete their block as well.

There is no box to explain the increase and no guideline checkbox. Those exist only on the N1.

Delivering it

The N2 instructions allow:

• personal delivery to the tenant or another adult in the unit;
• the mailbox, or wherever the mail is left;
• slipped beneath the door or into a mail slot;
• mail or courier;
• fax to the tenant's home or business.

Email is permitted only where the tenant agreed in writing (Rule 3.1). The door is off limits for posting. Serve every tenant and keep proof.

Errors to avoid

1. Treating a rent-controlled unit as exempt. No one tells the tenant a guideline exists, and every dollar over it is unlawful. Confirm the exemption, and the s. 7(4) to (6) exceptions, first.
2. Thinking the 90 days do not apply. They do under s. 116, apart from income-driven rent-geared-to-income changes. Without proper notice the increase is void (s. 116(4)).
3. Forgetting the 12-month rule for market-rent tenants. Only the groups listed earlier escape s. 119.
4. Putting care or meal charges into a care home's rent figure. The form excludes them. Show just the rent on the N2, or use the N3 if the care home is rent-controlled.
5. Door posting, or email without the tenant's signed consent. Service is defective unless you can prove it reached the tenant on time (s. 191(2)).

Afterwards

Nothing goes to the LTB. The new rent runs from the effective date. Keep the N2 and proof of service: if no one challenges the increase within a year of when it was first charged, it is deemed lawful (RTA s. 136).

Common questions

Which rentals count as "partially exempt"?

Those named in O. Reg. 516/06, s. 6, or in s. 7(1) of the RTA: housing run by government or a service manager, non-profit housing that qualifies, co-op units with non-member occupants, student and staff housing, and religious charitable housing. Rent can rise without a guideline cap, but most of the RTA still applies.

Is 90 days' notice required on an N2?

In most cases, yes. The exception is a rent-geared-to-income increase triggered by the tenant earning more, in one of the listed social housing groups.

Can an N2 raise rent above the guideline?

Yes, if the unit genuinely qualifies; the form itself tells the tenant there is no limit on the amount. Misjudge the exemption, though, and anything above guideline is unlawful.

Must a year pass between N2 increases?

Usually. The exceptions are student, staff and religious-charitable housing (RTA s. 7(2)), and tenants paying rent geared to income in the listed social housing.

Official sources

• N2 form (PDF)
• N2 Instructions (PDF)
• N1 Instructions (PDF)
• Residential Tenancies Act, 2006, ss. 6.1, 7, 116, 119, 136 and 191
• O. Reg. 516/06 (General), ss. 6 and 56
• LTB Rules of Procedure
• Residential rent increases (ontario.ca)