Form L5 – Application for a Rent Increase Above the Guideline Order

Jurisdiction: Country: Canada | Province or State: Ontario

What is a Form L5 – Application for a Rent Increase Above the Guideline Order?

Form L5 is the application landlords use to ask the Landlord and Tenant Board to approve rent increases higher than Ontario’s annual guideline. It is a formal request for an above-guideline increase, often called an “AGI.” You file it when you believe your costs meet specific legal grounds, and you want the Board’s order allowing the higher rent.

You use this form only for residential rental units covered by rent control. If your unit is exempt from the guideline, you do not use L5. Newer rental units that are exempt from rent control do not need an AGI. Those units can have rent set by agreement, subject to notice rules. For all rent-controlled units, the guideline caps the regular increase. L5 asks the Board for permission to go beyond that cap.

Typical users are residential landlords and property managers. You may own a small triplex or a large apartment complex. The form applies to both. Tenants do not file L5. Tenants receive notice of the application and can respond or attend the hearing.

You file L5 for three main reasons. First, you completed eligible capital expenditures. These are major repairs or replacements that extend the life of the building or provide a long-term benefit to tenants. Think roofs, boilers, windows, or elevator rebuilds. Routine maintenance does not qualify. Second, your municipal taxes and charges have increased unusually or are newly imposed. That could include assessment changes or special levies. Third, you were required to add or enhance security services by a public authority. For example, a police order to provide 24-hour security.

You typically need this form when your costs spike for reasons beyond normal inflation. You want to recover those costs in a structured, lawful way. The Board reviews your evidence. If granted, the AGI becomes part of the legal rent. This protects you if tenants dispute the increase later. It also gives clarity on timing and amount.

Common scenarios include a full roof replacement after years of leaks. You hire a contractor, obtain permits, and pay significant invoices. The work lasts for decades and improves tenant living conditions. That is classic capital work. Another scenario is a sharp increase in municipal taxes due to reassessment of the property. You provide tax bills before and after the change. You also sometimes apply when you have been ordered to provide security guards due to ongoing safety risks in the building. The Board can approve an increase to offset those required costs.

You cannot use L5 to pass through routine upkeep, like annual furnace cleaning, patch repairs, or standard repainting. You also cannot use it to recover costs while you have outstanding maintenance orders or serious unresolved repair issues. The Board may delay or deny an AGI if the building is not well-maintained. The law ties above-guideline requests to overall compliance with maintenance standards. That ensures tenants do not pay more when basic upkeep is lacking.

In short, Form L5 is your formal route to seek a higher rent where the law allows it. It aligns the rent with real, documented, long-term costs that benefit the property and tenants.

When Would You Use a Form L5 – Application for a Rent Increase Above the Guideline Order?

You use Form L5 when you plan to increase rent above the annual guideline and you have legal grounds. You usually apply after work finishes or after the tax change takes effect. You should have all invoices, permits, and proof of payment ready. The Board expects detailed evidence.

Say you replaced all windows in a 20-unit building. The old windows leaked and caused high heating costs. You hired a licensed installer. The work took three months and passed inspection. You now have invoices, contracts, proof of payment, and photos. This is a textbook eligible capital expenditure. You would file L5 to spread the cost across the units, up to the statutory cap per year.

Another example is steep municipal tax increases after a property reassessment. You provide tax bills from the base year and the current year. You show the dollar difference and how you allocate the increase to the residential units. The Board then uses those figures to calculate the allowable AGI, again subject to caps and rules.

A third scenario involves security services. Suppose police directed you to add on-site guards after repeated safety incidents. You sign a contract with a licensed security firm. You keep the police directive and the contract. You then ask the Board to allow an AGI to cover the added security cost. If the service is later reduced or removed, tenants may be entitled to a rent decrease. The Board will consider the ongoing need and may set conditions.

Typical users include landlords, property owners, and property managers. Tenants do not file L5 but will receive notice, can review the evidence, ask questions, and oppose the application if they disagree. If you operate a mixed-use property, you will need to separate residential and commercial cost allocations. Only the residential share is relevant for the L5 calculation.

Do not use L5 if your unit is exempt from rent control. In that case, you follow the notice rules for rent increases but not the guideline cap. Do not use L5 to fix errors in past rent increases or to recover amounts for services you did not provide. The form is not a catch-all remedy. It serves a specific purpose under the Residential Tenancies Act.

Legal Characteristics of the Form L5 – Application for a Rent Increase Above the Guideline Order

Form L5 is a statutory application under Ontario’s residential tenancy law. It starts a formal adjudicative process. The Board considers your filing, evidence, and testimony. Tenants can participate and present their own evidence. After a hearing or a review of documents, the Board issues a written order.

The order is legally binding. It sets the approved rent increase percentage and the timing. It can spread the increase over multiple years. Many AGI orders apply for up to three consecutive years. Each year’s increase above the guideline is capped. The Board enforces this cap to prevent sudden rent shocks. The order also states which units it applies to and any conditions. Those conditions may include completing lingering repairs or maintaining services at a set level.

Enforceability comes from the Board’s jurisdiction and the clarity of the order. Once the order takes effect, the new rent becomes the legal rent. If a tenant refuses to pay the approved increase, standard non-payment remedies may apply. If you fail to follow the conditions in order, the Board can deny, reduce, or suspend the increase. The order also interacts with other rules. For example, tenants can seek rent reductions if municipal taxes later decrease or if you reduce or remove a service that formed the basis of the AGI.

There are strict evidentiary standards. You must prove the costs are eligible. You must show that the work is complete and provides a lasting benefit. You must separate capital from routine maintenance. You must exclude costs covered by insurance, grants, or warranties. The Board also tests whether you meet maintenance obligations building-wide. If you have outstanding vital repair issues, the Board can defer or refuse your application. Good record-keeping and building compliance support your case.

You also must respect notice rules. Rent increases require at least 90 days’ written notice and can occur no more than once every 12 months for a unit. If you seek an AGI, the notice must state that you have applied or will apply to the Board. You should not charge above the guideline until you receive the order. The Board’s order will set the effective dates and any staging. In some cases, the Board may adjust timing to reflect when the work is finished or when taxes change.

Appeal routes exist. You may request a review or seek a court appeal on a legal question within strict timelines. Those processes do not suspend your duty to follow the order unless a stay is granted. It is best to get the L5 right the first time with complete evidence and accurate calculations.

In sum, the form is part of a formal legal process. The Board’s order binds both you and the tenants. Clear grounds, complete evidence, and compliance with rules ensure enforceability.

How to Fill Out a Form L5 – Application for a Rent Increase Above the Guideline Order

1) Confirm eligibility before you start.

Make sure the unit is subject to rent control. If the unit is exempt, you cannot use L5. Check that at least 12 months have passed since the last rent increase for each unit. Ensure you can give the required 90 days’ notice. Confirm you have no outstanding vital repair orders. Resolve serious maintenance issues first.

2) Gather your evidence.

For capital expenditures, collect contracts, invoices, receipts, proof of payment, permits, inspection reports, and photos. Group documents by project. Note start and completion dates for each project. Separate eligible capital work from routine maintenance. For municipal taxes, collect tax bills for the base and current years, assessment notices, and proof of payment. For security services, collect any directives from police or authorities, the security contract, invoices, and proof of payment.

3) Identify the units covered by the application.

Prepare a unit list that includes unit numbers, current legal rent, last increase date, and tenancy type. Include only residential units subject to rent control. If the property has commercial space, exclude it from the unit list and the cost allocation.

4) Choose the legal grounds you rely on.

Check the appropriate grounds: eligible capital expenditures, extraordinary increase in municipal taxes and charges, and required security services. You can claim more than one ground in a single application. Each ground needs its own evidence and calculation.

5) Calculate the proposed increase for each ground.

For capital expenditures, categorize each project and total eligible costs. Remove ineligible items like routine cleaning, cosmetic-only work, or insurance-covered repairs. Allocate costs to the residential units only. Use an objective allocation method, such as by unit count, floor area, or rent share, and be consistent. Apply the Board’s amortization concepts. The increase is subject to an annual cap and may be spread over up to three years. For taxes, calculate the percentage increase in municipal taxes and charges for the residential portion. For security, total the cost attributable to the residential units for the relevant period.

6) Prepare your calculation schedules.

Create a summary showing the base rent roll, the guideline increase, and the above-guideline components. Show the math clearly. Break out each ground with its own subtotal. Then show the combined AGI per year, capped as required. If the calculation exceeds the annual cap, plan to stage it over multiple years. Keep the staging simple and consistent.

7) Complete the applicant section.

Provide your legal name and contact information. If a corporation owns the property, use the corporation’s legal name. Provide the property manager’s details if they will attend the hearing. If a representative will act for you, include the representative’s information and authorization.

8) Complete the rental property details.

Enter the property address, the number of residential units, and the type of building. Attach the unit list as a schedule if the property has many units. Ensure unit identifiers match lease records. Accuracy here prevents service and notice issues.

9) Describe each ground in detail.

For capital expenditures, describe the work, why it was needed, when it started and finished, and the benefit to tenants. For example, “Replaced original boiler with high-efficiency unit, completed March 15. Improves heat reliability and reduces breakdowns.” For taxes, describe the change and the relevant years. For security, describe the directive and the scope of services provided.

10) Attach supporting documents as schedules.

Label each schedule clearly. Use headers like “Schedule A – Capital Expenditures Invoices” and “Schedule B – Tax Bills and Proof of Payment.” Add a table of contents if you have many documents. Include a cross-reference page that ties each cost line to an invoice.

11) Confirm notice and timing.

State that you will serve, or have served, the 90-day rent increase notice for each unit. If you served notices, attach copies and proof of service. The notice should tell tenants that you have applied for an above-guideline increase. Do not collect the above-guideline portion until the Board authorizes it. Keep your rent increase effective dates aligned with the Board’s process.

12) Sign and date the application.

The signatory must be the landlord or an authorized agent. Ensure all declarations are true and complete. False statements risk dismissal or penalties. Keep a full copy of everything you file.

13) Pay the filing fee and submit the package.

File using the Board’s accepted submission methods. Include the fee and all schedules. Late or incomplete filings cause delays or dismissal. Secure confirmation of filing and keep a record.

14) Prepare for service and the hearing.

The Board will issue a Notice of Hearing. You must serve tenants as directed if the Board does not do so. Tenants can review your evidence and file a response. Prepare a concise hearing brief. Include a summary of your calculations, a unit list, and key documents. Be ready to explain why each cost is eligible and how you allocated it.

15) Attend the hearing and present your case.

Arrive with originals or certified copies of key documents. Explain the work’s necessity and longevity. Show how tenants benefit from the improvements. For taxes and security, focus on necessity and accuracy. Answer Board and tenant questions directly and briefly. Offer to walk through your math.

16) Address maintenance and service issues.

If tenants raise maintenance concerns, show evidence of timely repairs and compliance. Bring photos and work orders. The Board may condition approval on completing specific repairs. Agree to clear timelines if needed. This can preserve your AGI.

17) After the order, implement the increase.

Read the order carefully. It will state the allowed percentage, the effective dates, and any staging. It may set conditions. Serve tenants with the order if required. Update your rent records and notices. Adjust interest on last month’s rent if applicable. Do not exceed the amounts or dates stated in the order.

18) Monitor ongoing obligations.

If municipal taxes later decrease, tenants may be entitled to a rent reduction. If you remove a service that supported the AGI, rents may need to go down. Keep records current. If you plan more capital projects, consider timing to avoid stacking increases that exceed caps.

19) Keep a compliance file.

Retain the full application, the order, all notices, and proof of service. Store the calculation schedules and supporting invoices. Keep maintenance logs and inspection reports. Good files support future applications and defend against challenges.

20) Communicate with tenants.

Give clear notice and timelines. Explain the reason for the increase in plain language. Invite questions. Cooperation reduces disputes and helps the hearing run smoothly.

Two practical examples help tie this together. First, you replaced balconies across a 60-unit building. Work finished on August 1. You file L5 with complete invoices and engineering reports. You propose a three-year staged AGI within the cap. You serve 90-day notices aligning with the order’s timing. The Board approves the staged increase, linked to the documented costs and benefits.

Second, your municipal taxes rose by a large percentage after reassessment. You submit the old and new tax bills and your allocation method. The Board verifies your math and grants an AGI reflecting the tax increase for the residential share. The order notes that if taxes decrease, tenants may seek a reduction.

Your goal is a clean, well-supported application that meets every legal requirement. Focus on eligibility, evidence, notice, and clear math. That is what gets an L5 approved and enforceable.

Legal Terms You Might Encounter

• Above Guideline Increase means a rent increase that is higher than the annual guideline. On this form, you ask the Board to approve that higher amount. You must show why your building qualifies under the allowed grounds.
• The guideline is the standard maximum increase set each year. It applies unless you receive an order. When you file this form, you are asking to go beyond that guideline for specific units.
• Eligible capital expenditures are major repairs or replacements that extend the life of the building or its systems. They are not routine maintenance. On this form, you list each project, describe the benefit to tenants, and include costs and dates.
• Extraordinary increase in municipal taxes and charges refers to a sharp jump in property taxes or charges for the rental complex. If this applies, you attach tax notices and proof of payment. You also explain the timing and how the increase affects the units.
• Operating costs for security relate to paid security services at the property. These are contract costs for guards or similar services. On this form, you include the contract, invoices, and the reason these services are needed.
• Amortization is the process of spreading a capital cost over its useful life. The Board uses amortization to calculate the annual amount that can be recovered through rent. Your form should show purchase or contract costs and the date the work was completed. The Board will apply amortization rules to those costs.
• Useful life is how long a capital item is expected to last. Examples include roofs, boilers, and windows. The useful life guides amortization. You should describe the item and include warranties or manufacturer details where possible.
• Work completion date is when the capital project finished and became operational. The timing matters for eligibility. On the form, you will state the start and completion dates. You also attach invoices, proof of payment, and any permits that confirm completion.
• Affected unit means a rental unit that will be subject to the above-guideline increase in the order. You must list each affected unit. You also need to show the current rent, the last increase date, and the requested increase.
• Order is the Board’s decision on your request. The order can approve, deny, or adjust the increase. The order sets the effective date and the percentage for each unit. You cannot charge the higher rent until the order takes effect and you have given the required notice.
• Notice of hearing is the document that tells you and your tenants when and how the hearing will happen. You must follow the instructions in that notice. You must also exchange evidence by the deadlines in that notice.

FAQs

Do you need to notify tenants before filing?

You do not need tenant consent to file. But you should communicate early. Tell tenants that you plan to file and why. After you file, follow the service and evidence rules in the notice of hearing. This helps avoid adjournments and delays.

Do you have to wait until all work is finished before filing?

For capital work, completion matters. You should file with final, paid invoices and a clear completion date. Filing with estimates or partial work invites delays or a denial. If the work is not complete, wait until you can prove completion.

Can you include routine maintenance in an above-guideline request?

No. Routine maintenance cannot support an above-guideline increase. You must show major repairs or replacements that extend the asset’s life or improve safety or efficiency. Separate maintenance invoices from capital invoices so your package stays clean.

Do you need to include all units in the building?

Include only the units affected by the grounds you rely on. For capital projects that benefit the whole complex, many or all units may be affected. For tax increases, all units in the complex are usually affected. If only one section benefits from work, include that section’s units. Your form should match the scope of the work or cost.

Can you charge the higher rent before the order is issued?

No. You cannot charge an above-guideline increase until the Board issues an order and the effective date arrives. You must also serve the required rent increase notice within the required notice period. If you charge early, you may need to refund amounts and face penalties.

What if tenants dispute your application?

Tenants can attend the hearing, ask questions, and file evidence. Expect questions about whether the work is capital or maintenance, whether costs are reasonable, and how you allocated costs. Prepare to explain your invoices, payments, procurement process, and benefits to tenants. Clear records and timelines help you respond calmly and convincingly.

Can you amend or withdraw your application?

You can usually amend or withdraw before the hearing. If you need to add units, update costs, or remove a ground, act early. Follow the instructions for amendments, serve the changes on tenants, and update your evidence list. If you must withdraw, submit a written request and keep proof.

What happens if the order approves only part of your request?

You must follow the order as written. The order may approve a lower amount or phase the increase over more than one year. You apply only what is ordered. If you see a clerical error in the order, request a correction. If you disagree with the outcome, explore your review options within the timelines.

Checklist: Before, During, and After the Form L5 – Application for a Rent Increase Above the Guideline Order

Before signing: Information and documents you need

Rental complex details:

• Legal address, number of units, and type of complex.
• List of affected units with unit numbers.
• Current monthly rent for each affected unit.
• Date of the last rent increase for each affected unit.

Grounds and evidence:

• Capital expenditures:
• Contracts, paid invoices, and proof of payment.
• Work descriptions, scope, and location in the building.
• Start and completion dates for each project.
• Photos, permits, and warranties.
• Rationale for replacing or upgrading equipment or systems.
• If cost overruns occurred, document reasons.

Taxes and charges:

• Prior and current tax bills.
• Notices showing the increase and its effective date.
• Proof of payment.
• Assessment notices if relevant to the increase.

Security services:

• Signed security contracts.
• Invoices and proof of payment.
• Start and end dates of the contract period.
• Incident logs or business reasons for adding security.

Allocation and calculations:

• Method used to allocate costs across affected units.
• Notes on common areas and building systems that serve all units.
• A clean summary sheet of totals by ground.

Tenant and communication records:

• Contact list for each affected unit.
• Prior notices are served about upcoming work or disruptions.
• Any tenant feedback that supports the need for the work.

Administrative items:

• Your contact details and agent authorization, if using an agent.
• Filing fee method and payer details.
• A draft evidence list with exhibit numbers.

During signing: Sections to verify

• Your name, business contact, and any agent’s contact are complete and consistent.
• The rental complex address and unit list match your rent roll.
• The grounds you rely on are correctly selected and described.
• Capital projects each have a clear description and completion date.
• Costs on the form match invoices and proof of payment totals.
• Tax or charge increases match the official notices attached.
• Security costs match the contract term and the attached invoices.
• The allocation method is stated and logical for the work performed.
• The requested increase for each unit is populated and consistent.
• The effective date requested complies with notice rules.
• The signature, date, and authority section are complete.
• All attachments are labeled and legible.
• The evidence list aligns with the attachments in order.

After signing: Filing, notifying, and storing

• File the application using the Board’s accepted method.
• Pay the filing fee and save the proof of payment.
• Wait for the notice of hearing and diarize all deadlines.
• If service by you is required, serve all materials as instructed.

Create a hearing binder:

• Application, evidence list, and all exhibits.
• Tabbed sections for capital, taxes, and security.
• A unit-by-unit summary sheet.
• Send tenants a plain-language summary of what you filed.
• Track returned mail and update any incorrect addresses.
• Calendar evidence exchange, reply, and hearing dates.

Prepare witnesses:

• Property manager or superintendent.
• Contractor or engineer for capital projects.
• Accounting staff for payment and allocation questions.

After receiving the order:

• Read every page and confirm the approved amount and timing.
• Update the rent roll for only the approved units and dates.
• Serve required rent increase notices within the required timeframe.
• Communicate changes to tenants and your accounting team.

Store the full record:

• Keep digital and paper copies of the application, evidence, and order.
• Keep a log of rent changes and notices served.

Common Mistakes to Avoid

• Don’t forget to separate capital work from maintenance. Mixing them weakens your case. The Board may disallow large parts of your claim, causing a lower increase or a denial.
• Don’t file with estimates or unpaid invoices. The Board cares about completed work and actual costs. Filing early can trigger adjournments, extra hearings, and more fees.
• Don’t ignore allocation logic. If your method for sharing costs across units seems unfair or unclear, the Board may reduce the request. Always connect each cost to the units that benefit.
• Don’t miss deadlines for evidence or service. Late materials risk exclusion. You could lose key exhibits or face adjournments and delays.
• Don’t claim work that lacks tenant benefit or longevity. If the project does not extend useful life or improve safety or efficiency, it likely fails. The Board may reject those costs outright.

What to Do After Filling Out the Form

1) File the application and pay the fee

• Submit the form through an accepted channel.
• Pay the fee and keep a receipt.
• Save a timestamped copy of the filed package.

2) Track the notice of hearing

• Watch for the notice of hearing and read it carefully.
• Calendar all dates for service and evidence exchange.
• Confirm whether you or the Board must serve materials.

3) Serve and organize your evidence

• Serve the application and evidence as instructed.
• Use a clear index and exhibit labels.
• Include invoices, contracts, proof of payment, photos, and permits.
• Provide a unit-by-unit schedule that matches the form.

4) Prepare your presentation

• Draft a brief opening statement that states the grounds.
• For each ground:
• Explain why it applies.
• Walk through the timeline and costs.
• Link benefits to tenants and the complex.
• Prepare witnesses and confirm their availability.
• Anticipate tenant questions about necessity and cost.

5) Attend the hearing

• Arrive early, or log in early if remote.
• Bring two copies of your package, if in person.
• Answer questions directly and refer to exhibits.
• Take notes on issues the decision-maker highlights.

6) Review the order

• When the order arrives, check:
• Which units are approved
• The approved percentage or dollar amount.
• Any phasing or timing conditions.
• Confirm the effective date and any directions about notices.

7) Implement only what the order allows

• Update the rent roll for approved units only.
• Serve required rent increase notices within the required notice period.
• Do not apply increases before the effective date.
• Communicate changes to tenants and your accounting team.

8) Correct errors or request changes if needed

• If the order has a clerical error, request a correction.
• If facts were missed, consider available review options.
• If you need to withdraw remaining claims, submit a withdrawal.

9) Keep records and monitor compliance

• Store the full file: application, evidence, hearing notes, and order.
• Keep proof of service for all notices and communications.
• Monitor rent ledgers to ensure correct implementation.
• Set reminders for any staged increases allowed by the order.

10) Plan future capital work with documentation in mind

• Track projects with start and completion dates.
• Keep procurement records and competitive quotes.
• Keep warranties and maintenance plans to show useful life.
• Tag invoices to units and building systems for clean allocation.

By following these steps, you make the process smoother. You also reduce the risk of delays or partial approvals. Strong records, clear links to tenant benefits, and consistent communication matter most.