How An Above the Guideline Increase AGI Works | Allistair A. Trent (Paralegal)

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Disclaimer: This presentation is for information and discussion purposes only and is not intended to constitute a substitute for legal advice. For legal advice relating to your individual situation please contact a qualified professional with experience in this area.

About This Class

This class offers an in-depth look at Above the Guideline Increases (AGIs) in Ontario, clarifying what types of property expenditures and tax increases qualify for these adjustments.

Learn the intricate details of the application process, the financial implications for both landlords and tenants, and why professional guidance is essential for navigating this complex aspect of property management.

About Allistair Trent

Allistair Trent has represented landlords and other real estate professionals since 1990 initially as the manager of Legal Services at rent check credit bureau and in private practice since 1995. Over this time he has represented landlords in a number of high-profile places including several apartment building class actions and numerous president setting cases. His work has featured in media on numerous occasions including every major Toronto newspaper as well as radio and television appearances. His cases have also appeared in law reports including the Ontario Reports, All Canadian Weekly Summaries and Real Property Reports. He has also written several published articles.

Allistair is also a licensed real estate agent in Ontario specializing in investment properties and international real estate. In 2011 he opened RealEquity Corporation in Tampa, Florida  which redeveloped over 100 foreclosure to rental properties for Canadian investors in addition to building approximately 20 luxury homes and a rental complex for Canadian clients. He is now active investing in Mexico and developing properties in Belize.

How to Contact Allistair

Phone: 416-628-4835
Email: [email protected]
Law Society Number: P00857 | Law Society of Ontario Profile

What you’ll learn

• Identify the specific types of eligible capital expenditures and extraordinary municipal tax increases that qualify for Above the Guideline Increases (AGIs) in Ontario.

• Explain the application process for AGIs, including timelines, administrative steps, potential challenges, and the calculation methodology for rent adjustments.

• Analyze the financial benefits and drawbacks of pursuing AGIs for different types of rental properties, understanding their impact on cash flow, property value, and tenant relations.

Key Takeaways

• Above the Guideline Increases (AGIs) allow landlords in Ontario to increase rent beyond the annual guideline for specific qualifying costs.

• AGIs are primarily sought for eligible capital expenditures and extraordinary municipal tax increases.

• Eligible capital expenditures must have a life expectancy of more than five years, be fully paid for, and completed within 18 months prior to the AGI application.

• Examples of eligible capital expenditures include new roofs, elevators, asphalt/driveway repairs, furnaces, and improvements related to physical integrity, landlord obligations, essential systems, disability access, energy/water conservation, or security. Purely cosmetic improvements are generally not eligible.

• The maximum annual increase for capital expenditures is capped at 3% above the guideline rent increase, which can be carried forward for two additional years, potentially totalling up to 9% over three years, plus the guideline increase each year.

• Extraordinary municipal tax increases can also be passed on if they exceed the guideline plus 50% of the guideline (e.g., more than 3.75% for 2024's 2.5% guideline). Unlike capital expenditures, there is no 3% cap on the amount passed on for taxes.

• AGIs are generally not practical or cost-effective for single homes or small multi-unit buildings due to administrative and legal costs (e.g., a $233 filing fee for the first 10 units), making them more suitable for large apartment buildings where the capitalized value benefits are significant.

• The AGI application process is often lengthy, taking two to three years or more to be decided by the Landlord and Tenant Board (LTB), leading to administrative complexities regarding rent collection and potential retroactive adjustments.

• Landlords are not permitted to charge the above-guideline portion of the rent increase until the AGI order is officially issued by the tribunal; any amounts collected prior to the order may need to be retroactively adjusted.

• Tenants often misunderstand that capital upgrades are a separate cost not inherently included in regular rent increases; landlords may need to educate tenants on the necessity and legality of AGIs.

View Allistair’s Slide Deck

Resources Referenced

• Quinte Landlords Association https://qrla.ca/

• Landlords Association of Durham

• Canadian Human Rights Commission https://www.chrc-ccdp.gc.ca/en

• Canada Mortgage and Housing Corporation (CMHC) https://www.cmhc-schl.gc.ca/ 

• Bank of Canada https://www.bank-banque-canada.ca/

• Canada Revenue Agency (CRA) https://www.canada.ca/en/revenue-agency.html 

• Landlord and Tenant Board (LTB) https://tribunalsontario.ca/ltb/

• Residential Tenancies Act (RTA), 2006 (Ontario) https://www.ontario.ca/laws/statute/06r17

• Section 126(2) of the RTA (capital expenditures for AGIs)
  (See RTA text above; Section 126(2) is within that Act.)

• O. Reg. 516/06: General Regulation (includes table of capital‑expenditure lifespans) https://www.ontario.ca/laws/regulation/r06516

• RTA Subsection 21 (landlord's obligation to repair)
  (Found within the RTA text, under “Responsibilities of Landlords”.)

• RTA Subsection 161 (mobile‑home‑park provision)
  (Also part of the RTA, under the mobile-home parks section.)

• Landlord Tenant Board Forms https://tribunalsontario.ca/ltb/forms-filing-and-fees/#panel1

  1. Form N4 (Notice to Terminate for Non‑Payment of Rent)
     (Official form available via LTB site.)

  2. Form N12 (Notice to Terminate – Personal Use)
     *(Official form available via LTB site; see explanation

  3. Form N13 (Notice – Demolition/Conversion/Major Repairs)
     (Official form via LTB site.)

  4. Form N15 (Notice – End Tenancy in Care Home for Landlord’s Own Use)
     (Official form via LTB site.)

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