Renoviction rules
Renoviction Protections: The "Golden Age" is Over
Thinking of renovating to reset the rent? Stop. The Bill 97 changes that took effect in 2026 have closed the loopholes. Here is the new reality of the N13 process.
The "Renoviction" Strategy is Dead
For years, some investors used the N13 (Demolition/Conversion/Repair) notice as a catch-all tool to vacate units, do cosmetic upgrades, and double the rent. It was a loophole, and it was profitable.
That era ended in 2026.
Bill 97, passed in 2023, took effect in two stages in 2026: higher fines on July 1, and new right-of-return duties on September 21. The government didn't just tweak the rules; they built a wall. If you are planning an N13 today, you need to understand that the burden of proof, and the cost, has shifted entirely onto you.
The New Reality: N13 Changes
The process looks deceptively similar on paper, but the enforcement is night-and-day different. Here are the three pillars of the new system:
1. No Permit, No Eviction
For repairs or renovations, the N13 only works if the job needs a building permit and the unit has to be empty to do it. Cosmetic work does not qualify.
The Rule: The form asks whether you have the permits or will get them. You can serve it before the permit is issued, but the LTB will not end the tenancy until you have the permits, or show you took all reasonable steps to get them.
The Trap: Toronto, Hamilton and Mississauga add a city renovation licence. You apply within 7 days of serving the N13, and in all three cities the application needs the building permit. In those cities, serve the N13 once the permit is in hand or close to it.
Don't Get Cute with "Paint and Patch"
You only get a building permit for structural work. Cosmetic renos (flooring, cabinets, painting) don't require permits. This means you cannot evict for cosmetic renovations. If the city doesn't require a permit, the LTB won't grant the eviction.
2. The "Right of Return" is Ironclad
This is where most landlords get burned. On a repair or renovation N13, a tenant who tells you in writing before they move out has the right to move back in once the work is done.
The Kicker: They move back in at their old rent.
Let's say you spend $50,000 gutting a unit. The tenant moves back in paying their original $1,200/month (plus the standard guideline increase). You cannot reset the rent to market rate just because the unit is nicer now.
New since September 21, 2026: the right of return now comes with a paper trail
Once a tenant gives you written notice on or after September 21, 2026 that they want to move back in, you now owe them three things in writing, without delay: the estimated completion date, notice of any change to that date, and notice once the unit is ready for occupancy. You must also give them 60 days' notice to reoccupy once the work is done, for renovations finishing on or after September 21, 2026. Skip any of that and it is presumed you denied the right of first refusal, though you can try to rebut it at the T5 hearing. The T5 filing deadline has also changed: tenants now have until two years after they moved out, or six months after the renovation finished, whichever is later. Both the N13 and T5 forms were also replaced September 21, 2026; the previous versions are rejected as of November 30, 2026. Source: LTB operational update, September 21, 2026.
3. Compensation is Mandatory
In a building with 5 or more residential units, you owe three months of rent. With fewer than 5, it is one month. Either way, you can offer another unit the tenant accepts instead.
It is due by the termination date on the notice. In a 6-unit building at $2,000 a month, that is a $6,000 cheque. This isn't a deposit; it's a payment you never see again.
Financial Reality Check
Up to 3 months comp + 4 months vacancy (renovation time) + $50k construction costs. If the tenant moves back in at the old rent, your ROI is likely negative for a decade. Do the math before you serve the notice.
When Does an N13 Actually Make Sense?
Given the costs, the N13 is no longer an "investment strategy." It is a tool for necessity. You use it when:
- Safety: Structural issues (foundation, black mold, knob-and-tube wiring) make the unit unsafe.
- Conversion: You are turning a duplex into a single-family home (or vice versa).
- Demolition: The building is coming down.
If your goal is just "modernizing to increase value," do it when the tenant leaves voluntarily. Forcing it via N13 is financial suicide under the current rules.
The "Good Faith" Trap
"Good faith" isn't just a feeling; it's a legal standard. If a tenant moves out, and 6 months later sees the unit listed on Kijiji for double the rent, without you offering it back to them first, you are in trouble.
At a T5 hearing, the LTB can order you to pay the tenant the difference in rent for a year, their moving costs, up to a year of rent as general compensation, and an administrative fine. Separately, a court can fine you up to $100,000, or $500,000 for a corporation, on conviction (maximums doubled July 1, 2026 under Bill 97).
How to Handle Necessary Renovations (without bankruptcy)
1. Negotiate (N11)
Honesty often works best. "I need to do major work. It will be noisy and messy. I will pay you X to end the tenancy." If they agree to sign an N11, the Right of Return and Permit rules don't apply. But it must be voluntary.
2. Do Work with Tenant in Place
Can you do the roof without evicting? Can you do the plumbing one day at a time? It is annoying, but cheaper than an N13 payout.
3. The "Golden Handshake"
Cash for keys is legal if done correctly (N11). Often, paying 4-6 months rent for a clean break is cheaper than the N13 process legal fees and permit delays.
Renting in Mississauga? There's a City licence too, from September 1, 2026
The permits, compensation, and right of return above are provincial rules that apply everywhere in Ontario. If your unit is in Mississauga, add a municipal layer on top: starting September 1, 2026, the city's new Rental Repairs and Renovations Licensing By-law (No. 0039-2026) requires you to apply for a City licence within 7 days of serving an N13, for a fee of $150 to $600 depending on the licence term, on top of the building permit you already need. You also owe the tenant a one-time Moving Contribution ($1,000 to $1,500 depending on unit size), separate from your RTA compensation. See the Mississauga licensing rules for the full breakdown.
Documentation: Your Only Defense
If you must proceed with an N13, document everything like you are already in court. Because you probably will be.
- The Permits: Stamped, dated, and active.
- The Engineer's Report: A letter stating "This unit MUST be vacant for safety."
- Communication: Emails proving you offered the Right of Return.
- Timelines: Proof that the work started immediately after they left.
The "Empty Unit" Myth
The tenancy ends on the termination date, but a tenant who gave you written notice keeps the right to move back in. Until the work is done and they have had the chance to return, the unit is not yours to re-rent.
Frequently Asked Questions
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