An AGI is an above guideline rent increase which is applied for by a landlord that has completed eligible capital expenditures. The expenditures must be for the residential complex or one or more of the rental units within it, and include significant renovation, repair, replacement or new addition and the expected benefit of which, extend for at least five years. the Residential Tenancies Act has strict provisions and applications on when an AGI can be applied for.
There are stringent requirements that include proof of expenditure and valid reasoning for a rent increase. The landlord must advocate to the Landlord and Tenant Board to get permission to have an above guideline rent increase in compliance with the evidence submitted.
Ontario is the only province with AGI legislation in place to protect tenants from unfair rent increases or for work that is substantially cosmetic in nature. A landlord can only apply for a small portion of the total cost of the work that was completed.