How Do I Handle Utilities for My Rental Property? 2026 Ontario Guide

How to handle utilities for a rental property in Ontario — 2026 landlord guide

TL;DR — Key Points

  • Decide who pays for each utility before move-in, and write it in Section 6 of the Ontario Standard Form of Lease — electricity, heat and water are each marked landlord or tenant, with the arrangement spelled out. Changing it mid-tenancy is where most disputes start.
  • Heat, electricity, fuel and hot and cold water are vital services. You must never shut them off or interfere with them — not even for rent arrears — and if a service is cut because you did not pay a bill that was yours, the law treats you as having withheld it.
  • Toronto water never really leaves the owner: the City can mail the bill to your tenant as a designate, but you remain responsible for payment, and unpaid amounts can land on your property tax account.
  • A sitting tenant cannot be moved onto a suite meter against their will. Transferring electricity needs their voluntary written consent, prescribed information, a rent reduction and at least 30 days’ notice — no consent, no transfer.
  • If utilities are included in the rent, rising bills are your cost. The 2026 rent guideline is 2.1%, and utility costs are not a ground for an above-guideline increase — price the risk in at the start, or meter properly.
  • Short-term rental guests never hold utility accounts. The host pays, builds the cost into the nightly rate, and watches usage — Toronto stays are capped at 180 entire-unit nights a year in any case.

Table of Contents

The 2023 version of this guide had three tips: decide who pays, set up the accounts, and save energy. That is still the shape of the job — but in Ontario in 2026 each of those steps has legal edges the old advice never mentioned. Who pays is a lease section with prescribed disclosure behind it. Account setup runs into a city water rule that keeps the owner liable no matter whose name is on the envelope. And shutting a service off, even by simply not paying your own bill, can be treated as withholding a vital service. This guide works through utilities the way an Ontario landlord actually has to handle them: hydro, heat, gas, water and waste, for long-term tenants and for short-term guests.

Start in Section 6 of the lease

Every utility argument is won or lost at signing. Section 6 of the Ontario Standard Form of Lease (Form 2229E) is where the arrangement is recorded:

  • Services included in the lawful rent — gas, air conditioning, storage, laundry, parking and anything else you provide are marked yes or no.
  • Utilities — electricity, heat and water are each assigned to the landlord or the tenant.
  • The details line — if the tenant is responsible, Section 6 asks how: the tenant opens their own account with the provider, or the tenant pays a portion of the cost. Write the actual arrangement, not “tenant pays utilities.”

Two consequences follow from what you tick. First, a utility included in the rent is part of the rent — you cannot start charging for it separately mid-tenancy, and removing or reducing a service that was included can support a tenant’s T3 application for a rent reduction. Second, if the tenant will pay for electricity measured by a meter or suite meter, you must give a prospective tenant the available information about the unit’s electricity use over the previous 12 months, on the Landlord and Tenant Board form, before they sign. Surprises after move-in are not a billing strategy; they are a dispute with a paper trail against you.

The lease itself is covered in how to write a lease agreement in Ontario, and the full duty list behind this section is in what your responsibilities are as a landlord.

The three utility models — and how to pick

Almost every Ontario rental uses one of three models. Each is legal; each fails in a different way when it is chosen by habit instead of by property.

1. All-inclusive rent. You hold every account and the rent covers utilities. This is the easiest model to market and the simplest to administer, and it is the default in most Toronto condos where the building is bulk-metered. The cost: the tenant has no direct reason to conserve, a cold winter is your problem, and you cannot pass a rate increase through — rent moves only under the normal rules (2026 guideline 2.1%, at least 90 days’ notice on Form N1, once in 12 months, for units first occupied on or before November 15, 2018). Price a realistic utility load, plus a margin, into the starting rent.

2. Tenant holds their own accounts. Where a unit is separately metered, the tenant opens accounts with the electricity distributor, the gas utility and any other provider in their own name. You get true cost pass-through and a tenant who can see their own usage. The limits: this only works where separate metering actually exists, water in Toronto does not transfer the way hydro does (next sections), and you still need a landlord account ready for the gaps between tenancies so service is never interrupted.

3. Apportioned or suite-metered. One supply serves several units and the cost is split — by a prescribed percentage formula, or by a suite meter that measures each unit. This is common in houses converted to two or three units. It is also the most regulated model: disclosure before signing, a prescribed split method, and, for suite meters, a consent regime for sitting tenants. Get either detail wrong and the charges themselves become contestable.

Rule of thumb: condos and single-meter buildings usually suit all-inclusive; purpose-built houses with separate meters suit tenant accounts; converted houses need the apportioned rules followed exactly, or they should be priced all-inclusive instead.

Vital services: the line you never cross

Under the Residential Tenancies Act, the vital services are heat (from September 1 to June 15), electricity, fuel such as natural gas or oil, and hot and cold water. The rules around them are not negotiable:

  • Never shut off or interfere. A landlord must not withhold the reasonable supply of a vital service, or deliberately interfere with it — including during a rent dispute. Cutting hydro to pressure a tenant over arrears is an offence risk and a Landlord and Tenant Board application waiting to happen, not leverage.
  • Not paying your own bill counts as withholding. If a service is discontinued because you failed to pay for a supply you were responsible for, the Act deems you to have withheld it. “The utility cut them off, not me” is not a defence.
  • Heat has numbers attached. You must be able to heat the unit through the September-to-June season; Toronto’s bylaw standard is at least 21°C from October 1 to May 15, and where you provide air conditioning, from June 1 to September 30 it must be able to keep the unit at or below 26°C.
  • Not everything is vital — but included is included. Internet and air conditioning are not vital services under the Act. If they were included in the tenancy, however, removing them can still reduce what the rent buys and support a rent-reduction application. The question is never only “is it vital?” — it is also “was it promised?”
  • Brief interruptions for real work are different. A short, noticed shutoff so a repair can actually be done is maintenance; an open-ended one, or one used as pressure, is interference. Give notice, keep it as short as the work allows, and put it in writing.

How repair duties and service duties fit together is covered in how to handle maintenance and repairs.

The Toronto water trap

Toronto water, sewer and solid-waste billing is where owners most often discover that “the tenant pays” was only half true. The City’s utility account stays with the property:

  • You can name a designate. The City will mail the utility bill to a designate — a tenant, relative or agent — if you file the designate request and accept the terms in Chapter 849 of the Municipal Code. A duplicate-bill fee applies for each bill mailed to a designate.
  • You remain responsible anyway. In the City’s own words, even when your designate receives the bill, you remain responsible for the full payment of all utility bills. Tell the City whenever the designate changes.
  • Unpaid amounts follow the property, not the tenant. Toronto can transfer unpaid utility amounts to the property tax account and collect them there. A tenant who leaves an unpaid water bill behind has, in practice, left it with you — your remedy is against the former tenant, not against the City.

Practical response: either keep water in the rent and price it, or use the designate system and check the account yourself every billing cycle — never assume a tenant-paid Toronto water bill is paid because no one called you. Other GTA municipalities handle tenant water accounts differently (some allow a true tenant account), so confirm the local rule city by city instead of assuming Toronto’s approach is universal.

Suite meters and sub-metering, done legally

A suite meter measures one unit’s electricity inside a bulk-metered building, and a licensed suite-meter provider bills the tenant. Installing the meter and billing from it are two different things:

  • Sitting tenants must consent. If electricity was included in a current tenant’s rent, moving them to suite-meter billing requires their voluntary, written consent on the approved form. The Ontario Energy Board’s framework also expects informed consent, an independent energy audit, disclosure of the rent reduction, and a licensed provider.
  • Consent comes with a package. Before asking, you must give the tenant the prescribed information: the provider’s fees, contact details, any security deposit, and how billing and disputes work, including that they can take a dispute with the provider to the Ontario Energy Board.
  • Rent goes down when the cost moves. When a tenant starts paying their own electricity, the rent is reduced by the prescribed calculation based on the unit’s historical consumption. You cannot keep the old all-inclusive rent and add the hydro bill on top.
  • Timing is prescribed too. After consent, give at least 30 days’ notice stating the date the rent drops and the date the tenant starts paying. A tenant who does not consent simply does not return the form — you keep providing and paying for their electricity, meter or no meter, and refusing consent is not a ground for eviction or pressure.
  • New tenancies are disclosure, not consent. For a prospective tenant in a suite-metered unit, provide the previous 12 months’ electricity-use information and any vacancy periods before signing, plus the age and available efficiency information for a landlord-supplied fridge.

One meter, several units: apportioned costs

In a converted house with one hydro or gas meter, landlords often split the bill by percentage — say 70/30 by unit size. Ontario allows apportionment, but only on its terms (section 138 of the Act and its regulation):

  • Disclose before the tenancy starts: the tenant’s percentage share, the building’s total cost for that utility over the most recent 12 months you have, and which parts of the building were vacant in that period.
  • Use the prescribed method for the split (for example, by unit square footage as the regulation directs) — not a ratio invented at the kitchen table.
  • Never collect more than the real bill. The shares together cannot exceed the building’s actual total cost for the utility, and prescribed limits apply to added fees. Keep every bill: an apportioned charge the tenant cannot verify is a charge the tenant can challenge.
  • Appliances count. Where tenants pay a share of electricity, landlord-supplied fridges must meet the regulation’s age and efficiency requirements — check yours before you split a single bill.

If you cannot produce 12 months of clean bills and a defensible split, the safer commercial choice is all-inclusive rent priced from those same bills.

Turnover: accounts, reads and the gap between tenancies

Most utility losses happen in the two weeks around a move. Run turnover as a checklist:

  • Read every meter on move-out day and move-in day — hydro, gas and water where they are separately read — photograph the reads, and file the photos with the tenancy records. A dated photo ends most “that was not my usage” arguments.
  • Close or transfer accounts in writing with each provider, with effective dates that match the lease dates. Confirm the final bill was issued; an unclosed account keeps billing whoever’s name is on it.
  • Hold a landlord account for the gap. Between tenancies the service reverts to you. Arrange that in advance so a winter vacancy does not mean a disconnected furnace — frozen pipes cost more than a month of heat, and a disconnected service can take days to restore for the incoming tenant.
  • Remember the winter rule: Ontario Energy Board rules bar electricity and gas distributors from disconnecting a residential customer for non-payment from November 15 to April 30. That protects supply in winter; it does not forgive the balance, which keeps growing until the ban lifts.
  • Start the new tenancy clean: give the incoming tenant the provider contact and account-setup steps before move-in day, and, for suite-metered or apportioned units, the disclosure described above — before they sign, not after.

The wider move-out sequence is in what to do when a tenant moves out, and the full letting sequence is in the steps to renting out your property.

When a utility bill does not get paid

Handle the two directions differently:

The tenant was responsible and did not pay. If the account is the tenant’s own (for example, their hydro account), disconnection for their non-payment is between them and the provider — it is not you withholding a vital service, provided you do not interfere. Keep the lease and the Section 6 page that made it their responsibility. If the tenant pays you a share of a shared bill and stops, document the bills and the amounts as you would any other amount owing, and take advice before treating it as rent — apportioned utility charges and rent are not automatically the same thing at the Board.

You were responsible and did not pay. This is the dangerous direction. As above, a cut-off caused by your non-payment is deemed withholding of a vital service, on top of the debt itself — and in Toronto, an unpaid water amount can migrate to your tax bill. If cash flow is the problem, call the provider about a payment arrangement before a due date passes; providers and the City both work with accounts that communicate, and the arrears tools they have in summer are exactly the ones the winter ban suspends.

In both directions: never use a utility as leverage in another dispute. The moment a shutoff threat appears in a message thread about rent, noise or access, the utility issue stops being about money.

Cut consumption, not service

If you hold the accounts, consumption is your cost line — so reduce the consumption, not the service level. In rough payback order for GTA rentals:

  • Free and cheap first: LED lighting in units and common areas, faucet aerators and low-flow showerheads, weatherstripping, a programmable or smart thermostat where the tenancy allows it, and a hot-water tank set at a safe, sensible temperature with the rental company’s service kept current.
  • Appliances at turnover: replace failed appliances with ENERGY STAR models — this matters doubly where tenants pay a share of electricity, because the regulation expects landlord fridges to meet its efficiency rules.
  • Envelope and heating, with rebates: Ontario’s Home Renovation Savings Program currently offers, by stream and heating type, up to $7,500 for a cold-climate air-source heat pump in a non-gas-heated home (a lower cap for gas-heated homes), up to $12,000 for a ground-source heat pump, up to $7,700 for insulation, $100 per opening for windows and doors, and smaller amounts for a heat-pump water heater and a smart thermostat. Two conditions decide whether you see any of it: eligibility varies by home type, and the required pre-approval or pre-retrofit assessment must happen before the work starts. Confirm your stream on the program site before you budget a dollar of rebate.
  • Watch the data: a landlord who reads the bills quarterly spots the running toilet, the stuck baseboard heater and the unit whose usage doubled — usually months before the annual total makes it obvious. A sudden spike is a maintenance signal first and a billing question second.

Where a value upgrade and a utility upgrade are the same project, see how to increase the value of your rental property. And remember the boundary: savings come from the building, never from lowering heat below the bylaw standard or letting a vital service lapse.

Condos: bulk meters and building rules

Most Toronto condos were not built for tenant-held utility accounts. Electricity is often bulk-metered to the corporation or suite-metered by a provider the building chose; heat and water are commonly inside the condo fees you already pay. That shapes the tenancy:

  • Price from your real costs: your unit’s share of utilities is a mix of your condo fees and any suite-metered hydro. Build the rent from those actual numbers, not from a house landlord’s rule of thumb.
  • Suite-metered hydro is the usual tenant account in newer buildings — set it up at turnover through the building’s provider, with the disclosure duties above.
  • The building’s rules sit on top of the lease: condo declarations and rules can govern things like in-unit laundry, AC units and move logistics for appliance swaps. A utility plan that breaks building rules is not a plan.
  • Vacancy still costs: an empty condo still draws standby and base charges, and a unit left unheated in winter risks the building’s pipes as well as yours — relevant if you are deciding whether a vacant month is really cheaper than a priced-to-fill one. Toronto’s Vacant Home Tax (3% of current value assessment, with an annual declaration due April 30) is the other cost of leaving it empty; see the Vacant Home Tax guide.

Utilities in a short-term rental

Short-term guests are not tenants and never hold accounts: stays under 28 consecutive nights in Toronto sit outside the Residential Tenancies Act and under the City’s short-term rental bylaw instead. The host carries every utility cost and manages it through price and settings:

  • Build utilities into the math, not the guest’s bill: Toronto registration is $390 a year, the home must be your principal residence, entire-unit rentals are capped at 180 nights a year, and guests pay the 6% Municipal Accommodation Tax (since August 1, 2026) plus 13% HST on top of your rate. Your hydro, gas, water and internet come out of what is left — see what a short-term rental is for the full frame.
  • Control the big loads remotely: a smart thermostat with sane limits, water-heater timing for gaps between stays, and alerts for abnormal water flow catch the classic STR utility losses — heat or AC run hard against open windows, and a running toilet or slow leak in an empty unit.
  • Budget by the booked night: divide last year’s utility total by booked nights to get a per-night utility cost, and re-check it each season. If that number is creeping, the fix is rate and settings — never a surprise utility fee added after booking.

When a manager should run the utilities

Utility handling is unglamorous, monthly and unforgiving of gaps — which is exactly why it is one of the first things owners hand over. A property manager typically: sets the Section 6 arrangement up correctly at signing, holds or monitors the accounts, checks Toronto water and other owner-liable bills each cycle instead of assuming a designate paid, coordinates meter reads and account transfers at turnover, watches consumption for leaks and faults, and keeps the bills filed so any apportioned charge can be proven.

Market context for the fee discussion: full long-term management in Ontario commonly runs 8–12% of collected rent, with a separate tenant-placement fee often at 50–100% of one month’s rent; full-service short-term management commonly runs higher, in the 18–25% range, because turnovers and guest messaging are daily work. What matters is not the band but what is inside it — ask any manager, in writing, who holds which utility account, who checks the water bill, and who pays when a gap between tenancies leaves a service disconnected. For Toronto and GTA owners, that is the service Home Again provides — see Airbnb management in Toronto.

Handle utilities as a system — decided in the lease, checked every cycle, photographed at every turnover — and they stay what they should be: a predictable cost line. Handle them by assumption, and they become the dispute, the tax-bill surprise, or the vital-service application you did not see coming.

Frequently Asked Questions

Can a landlord shut off utilities if a tenant does not pay rent in Ontario?

No. Heat (September 1 to June 15), electricity, fuel and hot and cold water are vital services under the Residential Tenancies Act. A landlord must not shut them off or interfere with their reasonable supply, even during a rent dispute — rent arrears are handled with the Board’s rent process, never with a shutoff.

Who is responsible for the Toronto water bill, the landlord or the tenant?

In Toronto the owner remains responsible. The City can mail the utility bill to a tenant as a designate, but the owner is still responsible for full payment, and unpaid amounts can be transferred to the property tax account. Either include water in the rent or check the account yourself every cycle.

Can I move my current tenant onto a suite meter for hydro?

Only with their voluntary written consent on the approved form, after giving the prescribed information, with a prescribed rent reduction and at least 30 days’ notice before the change takes effect. If the tenant does not consent, electricity stays included in their rent and you keep paying it — refusal is not a ground for eviction.

My rent includes utilities and the bills went up. Can I charge the tenant more?

Not separately, and not mid-tenancy. Included utilities are part of the lawful rent: increases follow the normal rules (2026 guideline 2.1%, at least 90 days’ notice, once in 12 months, for guideline-covered units), and utility costs are not a ground for an above-guideline increase. The time to price utility risk is in the starting rent or at a lawful turnover.

Can I split one hydro bill between two units in my house?

Yes, by apportionment — but only after disclosing, before the tenancy, the tenant’s percentage share, the building’s total cost for that utility over the most recent 12 months, and any vacancy periods, using the prescribed split method and never collecting more than the actual total bill. Keep every bill so the charge can be verified.

Who pays utilities in a Toronto Airbnb?

The host, always. Guests never hold utility accounts. The host builds hydro, gas, water and internet into the nightly rate, on top of the other Toronto numbers: $390 annual registration, a 180-night cap for entire-unit rentals of a principal residence, and the 6% Municipal Accommodation Tax plus 13% HST that guests pay on the stay.