An above-guideline increase (AGI) is a rent increase Ontario's Landlord and Tenant Board approves beyond the annual guideline cap — granted only on specific statutory grounds, through a formal L5 application, never by a landlord simply deciding costs went up.
The rule is set out in LTB Interpretation Guideline 14, which limits an AGI application to three grounds: “an extraordinary increase in the cost for municipal taxes and charges”; “eligible capital expenses (extraordinary or significant renovation, repair, replacement or new addition the expected benefit of which extends for at least five years)”; and increased costs for security services “provided…by persons not employed by the landlord for the first time or the costs have increased.” A landlord cannot use an AGI to recover an ordinary operating-cost increase already reflected in the guideline itself.
Capital-expenditure and security-service grounds are capped: the guideline itself states “The maximum annual increase allowed in an application based on capital expenditures or security services or both is 3% above the guideline.” If the justified increase is larger than that, the rent is increased by 3% in the first year, with any remaining increase taken in up to two additional years at 3% each — a phase-in capped at three years, not a one-time jump. The municipal-tax ground is different: “The 3% limitation does not apply where the application is based on an increase in the cost of municipal taxes and charges.”
An AGI still stacks on top of the ordinary guideline, which is itself capped by regulation rather than a pure pass-through of inflation — Ontario’s posted guideline for 2026 is 2.1%, down from 2.5% in 2025 and 2024. Filing an L5 application costs $233 for the first ten units plus $10 per additional unit, to a maximum of $1,000. A tenant is not powerless at the hearing: the Board can dismiss or delay an AGI application where the landlord has serious, unresolved maintenance breaches on the same building.
A landlord replaces a building's roof and elevator — both capital expenditures whose benefit clearly extends past five years — and applies for an AGI. Say the LTB finds the work justifies a 5% increase above the 2026 guideline of 2.1%. Because capital-expenditure AGIs cap at 3% above guideline per year, the landlord cannot take the full 5% at once: year one delivers guideline (2.1%) plus the 3% AGI cap, and the remaining 2% of the justified increase carries into year two on top of that year's own guideline.
See also: Rent-controlled unit · Special assessment
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