Skip to main content

Kippel & Associates Legal Services

Menu

N2 Form Ontario: Notice of Rent Increase for Exempt Units Explained

Home / All Blogs /N2 Form Ontario: Notice of Rent Increase for Exempt Units Explained

N2 Form Ontario: Notice of Rent Increase for Exempt Units Explained

Not every rent increase notice in Ontario looks the same. While most tenants are familiar with Form N1, landlords of certain rental units are legally required to use a different document altogether: Form N2 — Notice of Rent Increase (Unit Partially Exempt). Knowing when this form applies — and what it actually means for your rights — is essential for both landlords and tenants navigating Ontario’s rental rules.

What Is Form N2?

Form N2 is the official Landlord and Tenant Board (LTB) notice used when a rental unit is exempt from Ontario’s standard rent increase guideline. According to the Government of Ontario, certain units — most commonly new buildings, additions, and basement apartments first occupied for residential purposes after November 15, 2018 — fall outside the annual guideline (2.1% in 2026, 1.9% in 2027) entirely. For these units, the landlord isn’t bound by the percentage cap and can set the new rent at any amount, provided the correct process is followed.

The official version of the form is available directly through the Landlord and Tenant Board, and it should always be downloaded fresh rather than reused from an old copy, since outdated versions can be rejected.

Which Units Typically Qualify for the N2 Exemption

A unit is generally considered exempt from the rent increase guideline — and therefore requires Form N2 instead of Form N1 — if it falls into one of these categories:

  • New buildings first occupied for residential purposes after November 15, 2018
  • Additions to existing buildings completed after that date
  • New basement apartments or secondary suites created after November 15, 2018
  • Units where the landlord has occupied the property since 1975
  • Buildings not used for residential purposes before November 1, 1991

Care homes and certain social housing units follow their own separate rules and are also generally exempt from the standard guideline, though different notice requirements can apply.

Exempt from the Cap" Doesn't Mean "No Rules

This is the point many landlords — and tenants — misunderstand. Being exempt from the percentage guideline does not mean a landlord can raise rent however and whenever they like. Two core requirements still apply, even for a fully exempt unit:

  1. The 12-month rule — rent can only be increased once every 12 months, counted from the tenant’s move-in date or the date of the last increase.
  2. The 90-day notice rule — the landlord must give at least 90 days’ written notice using the correct form before the increase takes effect.

An increase that skips either of these rules is legally invalid, regardless of how exempt the unit is.

Permitted Reasons for Entry With Notice
  • To carry out a repair, replacement, or other work in the rental unit
  • To conduct an inspection to determine whether repairs are needed
  • To allow a potential mortgagee or insurer to view the unit
  • To allow a potential purchaser or their authorized real estate broker to view the unit
  • To show the unit to prospective tenants when the tenancy has been terminated or notice given
  • For any other reasonable purpose specifically set out in the tenancy agreement

Importantly, “I just wanted to check on things” is NOT a valid reason under the law. The reason given must fall within the RTA’s permitted grounds.

What Information Belongs on Form N2

To complete Form N2 correctly, landlords need to include:

  • The full legal name(s) of the tenant(s), matching the lease exactly
  • The complete address of the rental unit, including unit number
  • The landlord’s or representative’s name and contact details
  • The current rent amount
  • The new rent amount and the effective date
  • The landlord’s signature and the date the notice is prepared

Because there’s no percentage cap to check against, tenants receiving an N2 often assume there’s nothing to verify — but that’s not accurate. The dates, the unit’s exemption status, and proper service are all still open to challenge.

How the Notice Must Be Served

Just like Form N1, Form N2 must be delivered using an accepted method:

  • Handing it directly to the tenant or an adult occupant
  • Leaving it in the tenant’s mailbox or mail slot (if no key is needed)
  • Sending it by regular or registered mail
  • Email, only where the tenant has previously agreed in writing to receive notices this way

Sliding the form under the door, taping it to the door, or sending it by text message are not valid methods of service, and using them can render the entire notice invalid.

Who Carries the Burden of Proof

One detail that surprises many landlords: claiming an exemption isn’t automatic just because a building “feels new.” If a tenant disputes the exemption at the LTB, the landlord must prove the unit genuinely qualifies — typically through an occupancy certificate, building permit, or similar documentation showing the unit was first occupied after November 15, 2018. Verbal assurances or assumptions are not sufficient evidence.

Because of this, landlords relying on the N2 exemption should:

  • Keep the occupancy certificate, building permit, or renovation records on file
  • Add a term under section 15 of the lease stating that the unit is exempt from the guideline
  • Retain proof of proper service for every notice sent
What Tenants Should Check Before Accepting an N2 Notice

If you’ve received a Form N2, it’s worth confirming a few things before assuming the increase is valid:

  • Is your unit actually exempt? Ask the landlord for documentation, or contact the LTB directly to confirm
  • Was the notice served using an approved method?
  • Did you receive at least 90 days’ written notice before the effective date?
  • Has it been at least 12 months since your last rent increase or move-in date?

If any of these elements are missing, or if you believe your unit doesn’t genuinely qualify for the exemption, you have the right to dispute the notice at the LTB rather than simply paying the new amount.

Using the Wrong Form Can Void the Increase

A common — and costly — mistake is landlords using Form N1 for a unit that’s actually exempt, or using Form N2 for a unit that’s still fully rent-controlled. Either error can void the entire rent increase, forcing the landlord to start the notice process over and delaying the effective date by months.

Getting It Right

Whether you’re a landlord confirming your unit truly qualifies for the N2 exemption, or a tenant trying to understand whether a notice you’ve received is legitimate, the details matter just as much as they do with a standard N1 notice. Exemption status, proper documentation, and correct service are exactly the kind of issues that end up in front of the Landlord and Tenant Board when they’re handled incorrectly.

If you’re unsure whether your situation calls for Form N1 or Form N2 — or you want to challenge a notice you believe is invalid — Kippel & Associates Legal Services can review your documents and represent your interests at the LTB.

Frequently Asked Questions (FAQ)
  1. What is Form N2 used for?
     Form N2 is the official LTB notice landlords use to raise rent on a unit that is exempt from Ontario’s standard rent increase guideline, such as newer buildings first occupied after November 15, 2018.
  2. Does an exempt unit mean there’s no limit on the rent increase?
     There’s no percentage cap, but the landlord must still give at least 90 days’ written notice and follow the 12-month rule between increases.
  3. How do I know if my unit qualifies for the N2 exemption?
     Ask your landlord for proof, such as an occupancy certificate or building permit showing the unit was first occupied after November 15, 2018. You can also contact the LTB to confirm.
  4. Can a tenant dispute a Form N2 notice?
     Yes. Tenants can challenge the notice at the LTB if they believe the exemption doesn’t genuinely apply, or if the notice wasn’t served properly or on time.
  5. What happens if a landlord uses the wrong form?
     Using Form N1 for an exempt unit, or Form N2 for a rent-controlled unit, can invalidate the entire rent increase.
  6. Who has to prove the unit is exempt in a dispute?
     The landlord. If challenged, they must provide documentation showing the unit qualifies for the exemption — verbal claims are not enough.
Conclusion

Document every incident, communicate in writing, and don’t hesitate to contact the Landlord and Tenant Board if your rights are being violated. You can also review the official Residential Tenancies Act, 2006 on the Ontario Government’s website, or read the Renting in Ontario: Your Rights page for a plain-language overview.

If you are unsure about your specific situation or need help navigating a landlord dispute, speaking with a qualified legal professional is always a wise step. The team at Kippel & Associates is available to guide you through Ontario’s tenancy law with clarity and professionalism.

Conclusion

Form N2 gives landlords of certain exempt units more flexibility than the standard guideline allows, but it comes with the same non-negotiable requirements around notice and timing — and the added burden of proving the exemption is legitimate if it’s ever challenged. For tenants, receiving an N2 doesn’t mean giving up your right to question it. Whether you’re preparing a notice or reviewing one you’ve received, getting the details confirmed early can prevent a routine rent increase from turning into a dispute at the Landlord and Tenant Board.

All Blogs

Request A Free Consultation

    (437) 388-9786

    Available weekdays from 9 AM - 5 PM