Above-Guideline Increases (AGI) in Ontario

Ontario's 2.5% guideline rent increase isn't always the ceiling. In specific situations, landlords can apply to the Landlord and Tenant Board for an Above-Guideline Increase (AGI) of more than 2.5%. The categories are narrow, the documentation is heavy, and the timing matters.

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What qualifies for AGI

An AGI application can succeed when the landlord has incurred:

• Extraordinary increases in operating costs for utilities (gas, electricity)
• Capital expenditures for major repairs, renovations, or replacements that benefit the rental unit
• Security services, where the cost has risen substantially
• Specific other categories listed in the RTA

Capital expenditures: the most common path

Most successful AGI applications involve capital expenditures. The work must be more than ordinary repairs — think roof replacement, full mechanical overhaul, façade restoration, building-wide window replacement.

Importantly, the AGI must reflect the rental unit's share of the capital expense, not the whole bill. The LTB allocates costs by unit and amortizes them over the useful life of the improvement.

What the LTB requires for documentation

AGI applications stand or fall on documentation. Required for a credible application:

• Detailed invoices for the work performed
• Proof of payment
• Engineer or contractor reports describing the work and its necessity
• Reserve fund study identifying the work as needed
• Photographic before/after evidence
• Cost allocation methodology showing how the unit’s share was calculated

Process and timing

AGI applications are filed with the LTB on Form A1. Filing fees apply. The LTB schedules a hearing; tenant objections are common. Approved AGIs typically take 4–9 months from filing to order.

Once approved, the AGI percentage can be applied in addition to the guideline increase, subject to caps (typically the AGI is amortized over 12 months in 3% chunks).

Tenant objections and what defeats them

The most common tenant objections: the work was ordinary maintenance not capital, the unit didn't actually benefit, the cost was unreasonable, the documentation is incomplete. Strong applications anticipate each and address them with documentation.

Tenants can also raise unrelated arguments — maintenance complaints, harassment claims — that the LTB may consider in awarding the AGI. Landlords with clean tenant relationships fare better.

When AGI is worth filing

AGI is generally not worth filing for capital projects under ~$100,000 of building-wide cost. The legal and administrative effort outweighs the recovery for individual landlords. For larger projects, especially in buildings managed by an active condo board pursuing them, the math often works.

CentreKey owners considering AGI get an honest read on whether the application is worth filing, including expected recovery, timeline, and tenant-relationship cost.

Key Takeaways

- AGI requires LTB application on Form A1, not unilateral landlord action
- Capital expenditures are the most common qualifying category
- Documentation — invoices, engineer reports, reserve fund studies — wins applications
- AGI applications take 4–9 months and require careful preparation
- Often not worth filing for projects under ~$100,000 of building-wide cost