Waterloo’s rental housing rules are evolving — and landlords and tenants alike should know what’s new. Over the past year, the City of Waterloo has updated and expanded its residential rental licensing framework to improve housing safety, strengthen tenant protections, and respond to changing market conditions.

📜 What’s the Current Rental Licensing System?

Under the City’s Rental Housing Licensing Bylaw, most low-rise rental properties — including houses, duplexes, triplexes, townhomes, and basement units — must have a rental licence to operate legally. Larger multi-unit apartment buildings (4+ units) are generally exempt from this specific licence, but smaller rental properties are required to comply.

Licences are divided into classes based on building type and use. For example:

• Long-term rentals (more than 30 days) need one licence type, depending on occupancy and whether the owner lives in the property.

• Short-term rentals (e.g., Airbnb/VRBO stays under 30 days) now must only operate in the owner’s principal residence — meaning you live there full-time to qualify. This change is intended to return more long-term units to the rental market.

🛠️ New: Rental Renovation Licensing

In early 2026, Waterloo City Council approved the creation of a Rental Renovation Licensing By-law. This new requirement means landlords must now obtain a specific licence when issuing an N13 notice for renovations that require a tenant to vacate the unit.

This change is aimed at:

• Reducing the number of renovictions (evictions for renovations),

• Increasing transparency around major renovation plans, and

• Protecting tenants from being displaced without fair notice or support.

Alongside this, the City is also establishing a Tenant Support Fund to help renters who face housing instability or need legal support during disputes related to eviction or renovations.

📅 Licensing Renewals and Enforcement

Rental licences must be renewed annually, and landlords must provide updated inspections and documentation — including HVAC, electrical, and safety forms — as part of the renewal process. Missing renewal deadlines can result in penalties or fines.

The City has also stepped up enforcement efforts. For example, hundreds of charges were filed in recent years against property owners who failed to licence their rentals — which underscores how seriously the bylaw is being applied.

📍 Why This Matters

These licensing changes are designed to:

• Make sure rental homes in Waterloo meet minimum health and safety standards,

• Protect tenants from unexpected displacement or unsafe living conditions, and

• Promote a more stable and accountable rental market for everyone.

Whether you’re a landlord, a tenant, or someone thinking of entering the rental market, it’s important to understand your rights and obligations under these evolving rules.

👉 Tip for landlords: Always check whether your property needs a licence before you list it, and set renewal reminders well in advance.

👉 Tip for tenants: If your home doesn’t appear to be licensed or you have maintenance concerns, you can report it or request an inspection through the City’s rental housing support services.