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Most Ontario landlords have heard that some rental units are "exempt from rent control." Far fewer understand what that actually means in practice — or how to tell whether their unit qualifies.
This guide covers the November 15, 2018 exemption rule, what it lets you do, what it does not let you do, and how to confirm your unit's status before your next lease renewal.
What Rent Control Means in Ontario
Ontario's Residential Tenancies Act limits how much a landlord can raise rent for a continuing tenant. Each year, the province sets a rent increase guideline — a percentage cap. In 2025, the guideline was 2.5%. In 2026, it is 2.5% again.
If your unit is subject to rent control, you can raise rent by no more than the annual guideline, once per 12 months, with 90 days' written notice on an N1 form. Increases above the guideline require a separate LTB application (an above-guideline increase, or AGI), which is time-consuming and rarely approved.
For landlords with rent-controlled units, this limits revenue regardless of market conditions. If market rents rise faster than the guideline, you fall further behind year after year.
The November 15, 2018 Exemption
In 2016, the Liberal government removed a longstanding exemption that had applied to rental units built after 1991. For the first time, all private residential rentals in Ontario — new and old — became subject to rent control.
In October 2018, the Ford government reversed course with Bill 47 (the Making Ontario Open for Business Act). It reinstated the exemption for new construction — but only for units first occupied for residential purposes on or after November 15, 2018.
If your unit was first occupied before that date, rent control applies. No exceptions, regardless of when the building was constructed or renovated.
If your unit was first occupied on or after November 15, 2018, the annual guideline does not apply. You can set a rent increase at any amount, with proper notice.
The exemption is written into the Residential Tenancies Act at Section 6.1.
What "First Occupied" Means
This is where many landlords get it wrong.
"First occupied" does not mean the date the building was built. It does not mean the date you purchased the property. It means the first time anyone used the unit as a residential dwelling.
A few examples:
- A condo tower completed in 2017 but with units first rented in January 2019 — those units are exempt.
- A new subdivision home built in 2020 but rented for the first time in October 2018 — that home is not exempt (it was first occupied before November 15, 2018).
- A commercial space converted to a legal residential apartment and first rented in March 2021 — exempt, because the residential occupancy began after the cut-off date.
- A property purchased in 2023 with a tenant who has been there since 2016 — not exempt. The tenancy predates the cut-off regardless of your ownership date.
The key question is always: when did this unit first become someone's home?
How to Confirm Your Unit's First Occupancy Date
You cannot simply assume your unit is exempt because it looks new. You need documentation.
Step 1: Find the building permit and occupancy permit. The City of London Building Division issues a Final Occupancy Permit when a new building or addition is approved for use. This permit is dated, and the date is typically the earliest point at which the unit could have been legally occupied for residential purposes.
Step 2: Check your own purchase records. If you bought the property, your lawyer's title search would have included any property history. A Statement of Adjustments may reference when the property was first tenanted.
Step 3: Ask the first tenant — or check your own lease records. If you were the original landlord, you have a signed lease with a start date. That is your documentation.
Step 4: For properties with existing tenants at purchase, the previous landlord's records should have been disclosed. If they were not, you may need to work backward from the occupancy permit date.
If you cannot confirm the first occupancy date, treat the unit as rent-controlled until you can. Issuing an above-guideline increase without confirmation is a risk that could result in a T1 application from the tenant — and an order to repay the excess.
What the Exemption Actually Lets You Do
If your unit is confirmed exempt, you can raise rent by any amount — there is no percentage limit.
But the exemption does not remove the other rent increase rules under the RTA. You still must:
Give 90 days' written notice. The N1 form — Notice of Rent Increase — is required. You cannot raise rent without it, regardless of whether your unit is exempt.
Wait 12 months between increases. You can only raise rent once per 12-month period. The exemption does not let you raise rent every month, or at lease renewal after a short tenancy.
Not raise rent during a fixed-term tenancy. If you have a signed lease for a fixed term (say, a 12-month lease running from September 2026 to September 2027), you cannot raise rent in the middle of that term. The earliest you can raise rent is when the tenancy becomes month-to-month or when the new fixed-term lease begins — with 90 days' notice before that date.
For a step-by-step guide on the N1 process, see our post on how to increase rent in Ontario.
What the Exemption Does NOT Change
Owning an exempt rental unit does not make the rest of the RTA disappear. Everything else still applies:
Maintenance obligations are unchanged. Under RTA Section 20, you must keep the unit in good repair. Exemption status is irrelevant to your repair obligations. If a tenant files a T6 for maintenance issues on an exempt unit, the LTB will hear it.
Eviction rules are unchanged. You still need proper notice (N4, N5, N12, etc.) and an LTB order to evict. An exempt unit is not easier to clear — same process, same timelines.
No-pets clauses are still void. RTA Section 14 voids any lease clause restricting animals, whether the unit is exempt or not. See no-pets clauses in Ontario rentals for details.
Before you keep reading
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Last-month-rent deposit rules still apply. You can only collect the equivalent of one month's rent as a deposit. The deposit must earn interest at the guideline rate each year. See last month's rent interest in Ontario.
Tenant rights at lease renewal are unchanged. The tenancy continues month-to-month when a lease expires. You cannot simply refuse renewal to reset the rent for a new tenant without proper grounds for eviction. See lease renewal rules for Ontario landlords.
The Ontario Standard Lease is still required. Every new tenancy must use the government's standardized lease form, even for exempt units.
Vacancy Decontrol and What It Means for Exempt Units
For rent-controlled (pre-November 15, 2018) units, Ontario uses what is called "vacancy decontrol." This means that when a tenant moves out, the rent resets to market — the next tenant can be charged any amount, regardless of what the previous tenant paid.
For exempt units, this does not apply in the same way — there is no guideline to reset from. Every new tenancy simply begins at whatever rent you negotiate, because there was never a cap in the first place.
The practical implication: if your unit is exempt, your lease renewal is your strongest leverage point. When a lease comes up for renewal, you can propose a market-rate increase with 90 days' notice. If the tenant does not accept, the tenancy continues at the old rent (they are not required to accept a higher rent). But you are legally permitted to ask.
London and SW Ontario Context
London's new construction market has grown significantly since 2018. The downtown core, South London, and North London have seen new purpose-built rental buildings, condo-to-rental conversions, and backyard ADU additions. Many of these units are first occupied post-2018.
If you bought a duplex or triplex in London with units completed after 2018, it is worth confirming each unit's first occupancy date. Units in the same building can have different exemption statuses if they were completed or first occupied at different times.
St. Thomas and Strathroy also have newer housing stock where this exemption is relevant — particularly infill housing and new basement apartments registered under provincial ADU policy.
For landlords who purchased a property with existing tenants, the exemption status was fixed before your ownership. Buying a property with a tenant who has been there since 2015 does not grant you exempt status — the tenancy predates the cut-off regardless of your purchase date. Our post on buying property with existing tenants in Ontario covers the full picture.
Common Mistakes
1. Assuming "new" means exempt. A unit that looks new but was first occupied in 2017 or early 2018 is not exempt. Age of the building is irrelevant. First occupancy date is everything.
2. Skipping the N1 form. Even for exempt units, you cannot raise rent without an N1 and 90 days' notice. Verbal notice or a note in an email does not count.
3. Raising rent after less than 12 months. The 12-month rule between increases still applies to exempt units. A landlord who raises rent after 8 months and then again at 12 months has violated the RTA.
4. Assuming exemption lets you charge any amount at move-in on a controlled unit. Vacancy decontrol applies to rent-controlled (pre-2018) units too — you can charge market rent to a new tenant. Exemption is relevant when the same tenant is renewing. Do not confuse the two rules.
5. Ignoring documentation. If a tenant challenges an above-guideline increase and you cannot produce evidence of the first occupancy date, you will struggle at an LTB hearing. Keep the occupancy permit, your original lease, and any correspondence showing when the unit was first rented.
6. Applying exempt-unit math to mixed buildings. If you own a triplex where Unit A was first occupied in 2017 and Units B and C were first occupied in 2019, the exemption applies to B and C only. Unit A is rent-controlled. You need to track each unit separately.
7. Skipping the annual rent increase because you "can charge more later." Some landlords with exempt units skip rent increases for years, then try to jump to market rent all at once. While legally permitted (with proper notice), a large jump can trigger friction with a long-term tenant and increase vacancy risk. Small annual adjustments are smoother.
A Quick Reference Table
| Situation | Exempt? |
|---|---|
| Unit first occupied October 2018 | No — pre-cut-off |
| Unit first occupied December 2018 | Yes |
| Building built 2017, first tenant signed lease March 2019 | Yes |
| Pre-2018 unit, purchased by new owner in 2024 | No — first occupancy is what matters |
| Commercial conversion, first residential tenant June 2022 | Yes |
| New basement apartment, first rented January 2020 | Yes |
| Existing tenant in place since 2016, still there today | No |
FAQ
Does rent control exemption mean I can raise rent to any amount? Yes, there is no percentage cap for exempt units. But you must still serve an N1 with 90 days' notice and wait at least 12 months between increases. The exemption removes the guideline ceiling, not the procedural requirements.
What if I can't find the occupancy permit? Contact the City of London Building Division (or the relevant municipality) and request a copy. Occupancy permits are public records. If the unit is in a condo, the condo corporation typically has records of when units were first registered for occupancy.
Can a tenant challenge an above-guideline increase on an exempt unit? A tenant can file a T1 application disputing any rent increase they believe was illegal. If you cannot document that the unit was first occupied after November 15, 2018, the LTB may find the increase violated the guideline. Documentation matters.
My tenant has been there since 2019, but the unit was originally built in 2017 — is it exempt? It depends on when the unit was first occupied, not when it was built. If the first tenant ever moved in was in 2019, it is likely exempt. If someone lived there in 2017 or early 2018, it is not. Check the original occupancy permit and the first lease.
Does the exemption apply to rooming houses or student rentals? The exemption applies to any residential unit first occupied on or after November 15, 2018, regardless of rental type. However, the other RTA provisions still apply, so rooming houses, student rentals, and shared accommodations are still subject to all non-guideline RTA obligations.
What happens if I issue a rent increase on a rent-controlled unit thinking it was exempt? The tenant can file a T1 application. If the LTB finds the unit was subject to rent control and the increase exceeded the guideline, you may be ordered to repay the difference plus interest. This is a recoverable error, but it requires an LTB proceeding to resolve.
Does the exemption expire at some point? No. A unit that was first occupied after November 15, 2018 remains exempt from the rent increase guideline for as long as the RTA keeps this provision. The exemption is tied to the unit, not to time.
Can I change my exempt unit to a rent-controlled one? No. The exemption status is determined by first occupancy date and is not something a landlord can waive or change. Nor can a landlord use this to their advantage in reverse — an exempt unit stays exempt.
The Bottom Line
The November 15, 2018 exemption is one of the most significant rules in Ontario landlord law — and one of the most misunderstood. Landlords with newer rental stock in London, St. Thomas, or Strathroy may have more pricing flexibility than they realize. Landlords with older stock should understand exactly what limits apply so they do not inadvertently overstep.
In both cases, the procedural rules are the same: N1 form, 90 days' notice, once per year.
If you are managing multiple units with mixed exemption statuses, keeping track of which rules apply to which unit becomes part of the compliance burden. Prospera Properties handles this for landlords in London, St. Thomas, and Strathroy — tracking rent increase eligibility, serving N1 notices on time, and keeping records in order. If you want to take the compliance off your plate, see how we work.
External reference: Ontario RTA Section 6.1 — Exemption from rent increase guideline