The Complete N1 Notice Guide for Property Managers in 2025

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How to Properly Increase Rent in Ontario 2025: The Complete N1 Notice Guide for Landlords

The N1 notice for rent increase affects over 1.7 million rental units across Ontario, yet 31% of landlords and property managers make costly errors that delay or invalidate their increases, losing an average of $3,600 annually per unit. For property managers handling multiple properties, mastering the N1 Notice of Rent Increase isn’t just about compliance—it’s about protecting your investment’s profitability while maintaining positive tenant relationships in an increasingly complex regulatory environment.

2025 Update: Critical Changes

The Ontario government has set the 2025 rent increase guideline at 2.5%, with new digital service provisions and updated calculation methods for utilities. This guide reflects all current requirements and recent LTB clarifications.

Quick N1 Reference Guide

N1 Essential Facts	Details
2025 Guideline	2.5% maximum
Notice Period	90 days minimum
Frequency	Once per 12 months
First Increase	12 months after tenancy starts
Form Version	Must use current 2025 form
Service Methods	Physical delivery required
Can Tenant Refuse?	No, if properly served

Understanding the N1 Notice

What Makes N1 Ontario’s Most Used Notice

The N1 Notice of Rent Increase represents the foundation of sustainable property management in Ontario. Unlike other provinces where market rates prevail, Ontario’s rent control system requires precise adherence to guidelines and procedures through the N1 form.

Every year, over 400,000 N1 notices are served across the province, generating approximately $480 million in additional rental income for property owners. Yet recent data shows that improper N1 service costs landlords millions in lost revenue opportunities.

The Legal Framework Behind N1

The Residential Tenancies Act governs rent increases through a carefully balanced system:

Protection for tenants from excessive increases
Predictability for landlords in revenue planning
Standardization across all controlled units
Exceptions for newer buildings and special circumstances

For modern property management companies, understanding these nuances determines whether rent increases proceed smoothly or face challenges that can delay revenue for months.

Why Precision Matters More Than Ever

The Cost of N1 Errors:

Invalid notice: Must wait another 90 days
Calculation mistakes: Potential LTB orders to repay
Timeline errors: Full year delay possible
Wrong form version: Complete invalidity

Professional property management software eliminates these risks through automated compliance checking and calculation verification.

2025 Rent Increase Guidelines

Understanding the 2.5% Limit

The 2025 guideline of 2.5% represents the maximum allowable increase for most residential units without additional approval. This rate, set annually by the Ontario government, reflects economic factors including inflation and operating cost changes.

Calculating Your Increase

For Monthly Rent of $2,000:

Maximum increase: $50 (2.5%)
New rent: $2,050
Annual impact: $600

For Monthly Rent of $1,500:

Maximum increase: $37.50 (2.5%)
New rent: $1,537.50
Annual impact: $450

Automated rent calculators ensure accurate calculations across entire portfolios.

Historical Context and Trends

Year	Guideline	Economic Context
2025	2.5%	Moderate inflation period
2024	2.5%	Stabilization post-pandemic
2023	2.5%	Recovery phase
2022	1.2%	Pandemic support
2021	0%	Rent freeze

Understanding these trends helps property managers plan long-term revenue strategies.

Above Guideline Increases (AGI)

While N1 limits increases to 2.5%, landlords can apply for above-guideline increases through separate LTB applications for:

Extraordinary operating cost increases
Capital expenditures (major repairs/upgrades)
Security services additions

AGI applications require extensive documentation and face scrutiny, making the standard N1 increase more predictable for most properties.

Eligibility Requirements

The Four Pillars of N1 Eligibility

1. Twelve-Month Rule

You cannot increase rent until:

12 months have passed since tenancy began, OR
12 months since the last rent increase

Common Confusion Points:

Date counts from when tenancy started, not lease signing
Previous landlord’s increases count toward 12-month calculation
Rent reductions don’t reset the clock

Tenant tracking systems automatically monitor eligibility dates across portfolios.

2. Unit Must Be Covered Under Rent Control

Rent-Controlled Units Include:

Buildings first occupied before November 15, 2018
Social housing units
Nursing homes
Mobile home parks

Exempt Units (Use N2 Instead):

First occupied after November 15, 2018
Additions to existing buildings after November 15, 2018
Some converted commercial spaces

3. Proper Tenancy Status

Eligible Tenancies:

Active month-to-month
Fixed-term leases
Renewed tenancies
Continued occupancies

Ineligible Situations:

Vacant units
Between tenancies
Under eviction proceedings
Unauthorized occupants

4. Compliance with Previous Obligations

Before serving N1, ensure:

All maintenance obligations met
No outstanding LTB orders against you
Previous rent receipts provided
Required documents delivered

Compliance tracking features help maintain eligibility across multiple properties.

The 90-Day Timeline

Precision in Timing Calculations

The 90-day notice requirement is absolute and unforgiving. Even being one day short invalidates the entire notice.

Breaking Down the Timeline

Day 0: Service Date

The day you serve the N1
Must be documented precisely
Not included in 90-day count

Days 1-30: Early Period

Tenant processes increase
Questions typically arise
Payment method updates needed

Days 31-60: Preparation Phase

Tenant budget adjustments
Pre-authorized payment updates
Communication about changes

Days 61-89: Final Preparation

Reminder communications
System updates
Final clarifications

Day 90: Earliest Effective Date

Must align with rental period
Cannot be mid-month for monthly tenancies
First increased payment due

Calculating Effective Dates

For Monthly Tenancies: If serving N1 on March 1, 2025:

90 days = May 30, 2025
Effective date: June 1, 2025 (next rental period)

If serving N1 on March 15, 2025:

90 days = June 13, 2025
Effective date: July 1, 2025 (must be full rental period)

Automated timeline calculators prevent costly date calculation errors.

Service Method Impact on Timelines

Service Method	Additional Days	Total Notice Period
Hand delivery	0	90 days
Under door/mailbox	0	90 days
Mail	+5 days	95 days
Posted on door	0	90 days

Step-by-Step N1 Process

Phase 1: Pre-Service Preparation

Step 1: Verify Eligibility

✅ Checklist:

[ ] 12 months since last increase/tenancy start
[ ] Unit is rent-controlled
[ ] Current tenant in good standing
[ ] No outstanding maintenance issues
[ ] Correct guideline percentage confirmed

Step 2: Calculate New Rent

Calculation Formula:

Current Rent × 1.025 = New Rent (2025 guideline)

$1,850 × 1.025 = $1,896.25 (rounds to $1,896)

Rounding Rules:

Round down to nearest dollar
Never round up
Document calculation method

Financial integration tools ensure accurate calculations across all units.

Step 3: Prepare the N1 Form

Section 1: Tenant Information

Full legal names (all tenants)
Complete unit address
Current contact information

Section 2: Rent Details

Current rent amount
New rent amount
Percentage increase (must not exceed 2.5%)
Effective date

Section 3: Utility Inclusions

List all included utilities
Note any changes
Separate utility adjustments if applicable

Phase 2: Service and Documentation

Step 4: Choose Service Method

Best Practice Hierarchy:

Personal handover – Most defensible
Under door – Acceptable if tenant absent
Mailbox – If secure and accessible
Posted on door – Last resort
Mail – Only if other methods impossible

Step 5: Complete Service

Service Day Checklist:

[ ] Correct N1 form version
[ ] All pages included
[ ] Information sheet attached
[ ] Keep copy for records
[ ] Complete Certificate of Service
[ ] Photo of service (if applicable)

Digital documentation systems create tamper-proof service records.

Step 6: File Certificate of Service

Required Information:

Date and time of service
Method used
Person who served
Any tenant response
Signature of server

Phase 3: Post-Service Management

Step 7: Update Systems

Administrative Updates:

Property management software
Accounting systems
Payment processors
Tenant portal
Lease records

Step 8: Tenant Communication

30 Days Before Increase:

Send friendly reminder
Confirm payment method changes
Answer any questions
Update pre-authorized debits

Week Before Increase:

Final reminder
Confirm new amount
Payment date reminder

Step 9: Implementation

First Increased Rent Date:

Monitor payment receipt
Verify correct amount
Document successful increase
Update financial projections

Common N1 Mistakes That Cost Thousands

The Top 10 N1 Errors

1. Using Outdated Forms

The Problem: LTB updates forms regularly The Cost: Complete invalidity, 90+ day delay The Solution: Automated form updates

2. Incorrect Timeline Calculation

The Problem: Counting days wrong The Cost: Invalid notice, restart required The Solution: Digital timeline calculators

3. Exceeding Guideline Rate

The Problem: Calculating more than 2.5% The Cost: Tenant challenge, rollback ordered The Solution: Automated calculation verification

4. Wrong Effective Date

The Problem: Mid-period increases The Cost: Confusion, payment issues The Solution: Rental period alignment tools

5. Missing Tenant Names

The Problem: Not listing all tenants The Cost: Invalid service claims The Solution: Comprehensive tenant tracking

6. Calculation Errors

The Problem: Math mistakes The Cost: Overcharge liability The Solution: Automated calculations

7. Improper Service

The Problem: Email or text delivery The Cost: Unenforceable increase The Solution: Approved method guidance

8. Too-Early Service

The Problem: Serving before 12 months The Cost: Complete invalidity The Solution: Eligibility tracking systems

9. No Documentation

The Problem: Missing service proof The Cost: Cannot defend if challenged The Solution: Digital documentation

10. Ignoring Exemptions

The Problem: Using N1 for exempt units The Cost: Wrong form, wrong process The Solution: Unit classification tracking

Special Situations and Exemptions

Newer Buildings (Post-November 2018)

Buildings first occupied after November 15, 2018, are exempt from rent control:

Use N2 form instead of N1
No percentage limit applies
Still requires 90-day notice
Market rates permissible

Portfolio management systems track which units require N1 versus N2.

Care Homes and Retirement Facilities

Special rules apply for:

Care services included
Meal programs
Medical services
Support services

Use N3 form for these components while N1 covers base rent only.

Subsidized Housing

RGI (Rent-Geared-to-Income) Units:

Different calculation methods
Income verification required
Special notice requirements
Coordination with housing providers

Utility Inclusion Changes

When utilities shift from landlord to tenant:

Requires separate notice
May affect rent amount
Cannot exceed guideline when combined
Documentation essential

Utility tracking features help manage complex inclusion changes.

Digital Automation for N1 Notices

Transform Your Rent Increase Process

Modern property management demands digital solutions for N1 compliance. Manual processes risk errors that cost thousands in lost revenue.

Automated Eligibility Tracking

System Monitors:

Last increase dates
12-month milestones
Tenant status
Unit classifications
Guideline updates

Smart Alerts:

“Unit 205 eligible for rent increase in 30 days”

“Prepare N1 notices for Building A – 15 units eligible”

“2025 guideline released – update calculations”

Cloud-based platforms ensure you never miss an increase opportunity.

Calculation Automation

Automatic Computations:

Current rent pulled from system
Guideline percentage applied
Rounding rules enforced
New rent calculated
Effective date determined

Batch Processing

For portfolios with multiple units:

Generate dozens of N1s simultaneously
Maintain individual customization
Ensure consistency
Track service dates
Monitor outcomes

Integration Benefits

Connected Systems:

Accounting software for financial updates
Payment processors for new amounts
Tenant portals for communication
Banking for pre-authorized debits
Reporting for revenue projections

N1 FAQs

Timing and Calculation Questions

Q: Can I increase rent by less than 2.5%? A: Yes, you can increase by any amount up to 2.5%. Some landlords choose smaller increases to maintain tenant satisfaction.

Q: What if my tenant’s lease renews mid-year? A: Lease renewal doesn’t affect rent increase eligibility. The 12-month rule applies regardless of lease terms.

Q: Can I serve N1 during a fixed-term lease? A: Yes, as long as the increase takes effect after 12 months of tenancy, even within a fixed term.

Service and Compliance Questions

Q: Is email service valid if my tenant agrees? A: No, even with agreement, email isn’t recognized for N1 service. Physical delivery is required.

Q: What if I made an error on the N1? A: You must serve a new, correct N1 with a fresh 90-day notice period. The original is void.

Q: Can tenants refuse the increase? A: No, properly served N1 increases are mandatory. Tenants can only move out if they object.

Special Situation Questions

Q: How do I handle partial month tenancies? A: Prorate the increase for partial periods using daily calculations based on the number of days in that month.

Q: What about tenants who pay quarterly? A: The same rules apply, but ensure 90 days notice before the next quarterly payment date.

Q: Can I increase parking separately? A: If parking is a separate agreement, it may not be subject to rent control. If included in rent, it’s part of the controlled amount.

Legal compliance tools help navigate complex situations correctly.

Take Action Today

Don’t Leave Money on the Table

Every month you delay proper rent increases costs your portfolio:

Lost revenue: $37.50-$125/unit monthly
Compound effect: Can’t make up missed increases
Portfolio impact: Thousands in annual losses
Market positioning: Fall behind comparable properties

Automate Your Rent Increases with Haletale

See how successful property managers never miss an increase opportunity:

Platform Features:

Automatic eligibility tracking
Bulk N1 generation
Timeline monitoring
Service documentation
Revenue impact reporting

Book Your Demo Today →

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Conclusion: Master N1 for Sustainable Growth

The N1 notice represents more than just a rent increase—it’s your tool for maintaining profitable, sustainable property management in Ontario’s regulated environment. While the 2.5% guideline may seem modest, consistent, proper increases compound into significant portfolio value over time.

Success with N1 notices requires precision in timing, accuracy in calculations, and meticulous documentation. One mistake can cost months of delays and thousands in lost revenue. That’s why leading property management companies have embraced digital automation for N1 compliance.

By mastering the N1 process—from eligibility verification through successful implementation—you ensure your properties remain competitive while maintaining positive tenant relationships. The key is consistency, compliance, and leveraging technology to eliminate human error.

Don’t let another year pass without maximizing your legal rent increases. Every delayed or missed N1 is money left on the table that you’ll never recover.

Last Updated: September 17, 2025 | All information current as of publication date. Always verify current requirements with the LTB.

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