The N2 Notice of Rent Increase (Unit Partially Exempt) is the Landlord and Tenant Board form an Ontario landlord uses to raise the rent for a unit that is exempt from the RTA's limits on the amount of a rent increase. These are mostly social, non-profit and other publicly assisted housing. The guideline does not cap the increase. In most cases, though, the landlord must still give 90 days' written notice and wait 12 months between increases.
At a glance
| Who uses it | Landlords of partially exempt units, such as social and non-profit housing and exempt care home units |
| When | Before raising the rent on a partially exempt unit |
| Notice period / deadline | At least 90 days' written notice "where applicable", meaning in most cases |
| How it is served or filed | Served on every tenant; not filed with the LTB |
| Filing fee (if an application) | None |
| Follow-on form | None |
What the N2 is for
The RTA switches off its rent-control provisions for certain units but leaves the rest of the Act in place. That is why they are "partially" exempt. The main groups are:
- RTA s. 7(1):
- units owned or run by the Government of Canada;
- designated housing projects of a service manager or local housing corporation;
- non-profit housing developed under a prescribed program and operating under the Housing Services Act, 2011 or a qualifying agreement;
- non-member units of a non-profit housing co-operative;
- units an educational institution provides to students or staff; and
- units a religious institution runs for a charitable use on a non-profit basis.
For these units, s. 120 (the guideline) and the rules on above-guideline increases do not apply. - O. Reg. 516/06, s. 6: units developed or acquired under listed affordable-housing programs (for example the Canada-Ontario Affordable Housing Program or municipal capital facility by-laws) that meet the conditions in s. 6(2), and units under the Rural and Native Rental Housing Program.
The N2 states the new rent and tells the tenant that the guideline does not apply, so "the landlord can raise the rent by any amount".
When to use it (and when not to)
Use the N2 when the unit falls into one of the groups above. The N2 instructions give examples: "non-profit and other social housing rental units, including care home units that are exempt from the rules limiting rent increases."
Use a different form when:
- the unit is covered by rent control: use the N1;
- it is a rent-controlled care home unit: use the N3; or
- there is an agreed above-guideline increase: use the N10. Note that s. 121 agreements do not apply to s. 7 units, so an N10 is not available for them.
Watch the exceptions that put rent control back:
- A unit in a federal or service-manager project is covered if the tenant pays rent to a different landlord (s. 7(4), (5)).
- Student or staff housing is covered if there is a residents' council or association and it was not consulted about the increase (s. 7(6)).
Post-2018 units. The N1 instructions direct landlords to use the N2 for units "exempt from the rules … limiting the amount of the rent increase". Units first occupied after November 15, 2018 (RTA s. 6.1) fit that description, but the N2 instructions (May 2017) predate s. 6.1 and describe only social and non-profit housing. The LTB has not published guidance on which of the two it expects for a unit exempt under s. 6.1. Whichever you use, it must be an approved form giving at least 90 days' written notice (s. 116); check with the LTB before serving.
Deadlines and limitation periods
- 90 days' notice: RTA s. 116 applies to partially exempt units, so give at least 90 days' written notice and add five days if mailed (s. 191(3)). The LTB cannot shorten this period (O. Reg. 516/06, s. 56).
- Exception: no notice is needed for an increase caused by a rise in the tenant's income where the tenant pays rent geared to income in a s. 7(1) para. 1–4 unit or a reg. s. 6 unit (RTA s. 7(3); O. Reg. 516/06, s. 6(5)). This is why the form says "where applicable".
- 12-month rule: RTA s. 119 normally applies. It does not apply to:
- rent-geared-to-income tenants in s. 7(1) para. 1–4 units or reg. s. 6 units; or
- student, staff and religious-charitable units (s. 7(2); O. Reg. 516/06, s. 6(4)).
How to fill out the N2, section by section
The current N2 is version 01/04/2022, on one page.
- To: (Tenant's name and address). All tenants, with a mailing address if different.
- From: (Landlord's name and address). All landlords, with a mailing address.
- Address of the Rental Unit. The full address, including the unit number and postal code.
- Your New Rent. - "On dd/mm/yyyy": the effective date. - "your rent will increase to $": the total new rent. - "per month / week / other": the rent period.
The form notes the rent includes separately paid service charges but, for a care home, not charges for care services or meals. 5. Important Information About the Law. Leave as printed. 6. Signature. Shade Landlord or Representative, print the name and phone number, sign and date. A representative also completes the representative block.
Unlike the N1, there is no "explanation of the increase" section and no guideline tick-box.
Serving it
The N2 instructions allow you to:
- hand it to the tenant or an adult in the unit;
- leave it in the mailbox or where mail is delivered;
- slide it under the door or through the mail slot;
- send it by courier or mail; or
- fax it to the tenant's home or business.
Rule 3.1 also permits email if the tenant has consented in writing. Do not post it on the door. Serve every tenant and keep proof of service.
Mistakes that get it refused, voided or dismissed
- Using the N2 for a unit that is actually rent-controlled. The tenant has not been told about the guideline, and any increase above it is unlawful. Check the exemption, and the s. 7(4)–(6) exceptions, before relying on the N2.
- Skipping the 90 days because the unit is "exempt". Section 116 still applies, except for income-driven rent-geared-to-income changes. An increase without proper notice is void (s. 116(4)).
- Ignoring the 12-month rule for a market-rent tenant in a partially exempt building. The s. 119 exemption covers only the categories listed above.
- Including care or meal charges in the rent figure for a care home unit. The form excludes them. Use the N3 for a rent-controlled care home, or show only the rent on the N2.
- Posting it on the door, or emailing without written consent. The service is defective unless you can prove the notice reached the tenant in time (s. 191(2)).
What happens next
Nothing is filed. The new rent applies from the effective date. Keep the notice and proof of service. An increase not challenged within one year of first being charged is deemed lawful (RTA s. 136).
Frequently asked questions
Which units are "partially exempt"?
Mainly units listed in RTA s. 7(1) and O. Reg. 516/06, s. 6. These include government-owned and service-manager housing, qualifying non-profit housing, non-member co-op units, educational institution housing and religious charitable housing. The guideline does not cap their rent increases, but most other RTA rules apply.
Do I still have to give 90 days' notice on an N2?
Usually yes. The exception is an increase in rent-geared-to-income rent caused by a rise in the tenant's income in the listed social housing categories.
Can I raise the rent by more than the guideline with an N2?
Yes, for a unit that is truly partially exempt. The form itself says the landlord "can raise the rent by any amount". Get the exemption wrong and the excess is unlawful.
Does the 12-month rule apply?
It applies unless the tenant pays rent geared to income in a listed social housing unit, or the unit is student, staff or religious-charitable housing (RTA s. 7(2)).