Ontario TMI & Additional Rent: how to check your reconciliation for overcharges

If you lease commercial space in Ontario — a restaurant, shop, clinic, salon or office — your landlord bills TMI (Taxes, Maintenance, Insurance), also called Additional Rent or Operating Costs, on top of base rent. Once a year they send a reconciliation. Here’s how it works, the overcharges we see most often, and how to check your own statement for free.

What is TMI / Additional Rent?

TMI is your proportionate share of the building’s operating costs — realty taxes, insurance, snow removal, landscaping, common-area utilities, cleaning, security and repairs. Your lease defines your share (usually your rentable area ÷ the building’s total) and what costs are, and aren’t, allowed in the pool. In Ontario, TMI and the full Additional Rent amount also carry 13% HST.

How the year-end TMI reconciliation works

The landlord estimates the year’s operating costs, bills you monthly, and then — usually within 90 days of their fiscal year end — sends a reconciliation comparing your estimated instalments to your share of the actual costs. If you underpaid, you get a shortfall bill; if you overpaid, a credit. This true-up is where most errors surface, because it’s the first time the actual numbers are shown.

The most common Ontario TMI overcharges

From auditing reconciliations against the lease, these are the recurring ones — each turns on what your lease actually says:

1. Capital costs billed as operating costs. A parking-lot repaving, roof replacement or structural repair is usually a capital expense your lease excludes — it shouldn’t be in the pool at all, yet it inflates every tenant’s share.
2. Management / admin fee on the wrong base. The fee should be taken only on the costs your lease allows — often excluding taxes and insurance. Charged on the full pool, it’s bigger than the lease permits.
3. Gross-up applied to fixed costs. Occupancy gross-up should touch only variable costs (janitorial, utilities). Applied to taxes or insurance — which don’t change with occupancy — it over-bills.
4. Your proportionate share is wrong. The statement uses a different percentage than your lease defines, or a denominator that leaves out vacant or landlord-used space.
5. HST charged incorrectly. HST should be 13% of your net Additional Rent. Charged on the wrong base — or double-charged after estimates already carried it — it doesn’t reconcile, and it throws off the input-tax-credit you claim with the CRA.
6. Estimates never trued-up. You paid monthly estimates all year, but they were never credited against your actual share on the reconciliation.

Your rights as an Ontario commercial tenant

Ontario commercial leases aren’t covered by the Landlord and Tenant Board — they’re governed by the lease and the Commercial Tenancies Act. A few things worth knowing:

• Audit / verification rights. Most leases let you examine the invoices and records behind the operating costs, usually within a set window (often 30–90 days of the statement). Even where the lease is silent, Ontario courts have recognized a tenant’s right to a reasonable opportunity to examine the backup.
• Objection deadline. Many leases deem the reconciliation “binding” if you don’t object within a set period — so check the date and act before it closes.
• Limitation period. Claims to recover an overpayment are generally subject to Ontario’s 2-year limitation, running from when you could have discovered the issue.

This is a starting point for review, not legal or tax advice — confirm against your lease and with your accountant or a commercial-lease lawyer.

How to check your own TMI

You don’t need to be an accountant. Upload your lease and your TMI / Additional Rent statement, and the free check reads both, compares every charge to your lease terms (HST included), and flags what doesn’t reconcile — each finding tied to the exact clause, with a calm, CRA-framed reconciliation letter you can send your landlord. See a worked sample on the home page, or run yours now.

TMI reconciliation FAQ

There’s no single “right” number — it depends on your building and lease. What matters is whether the charges are allowed and calculated correctly. Run the free check to compare your statement line-by-line to your lease.

They overlap. In Ontario, Additional Rent is the lease term; TMI (Taxes, Maintenance, Insurance) is the common retail shorthand; CAM (Common Area Maintenance) is the US term for the maintenance portion. The audit logic is the same. Leasing outside Ontario? See the Canada-wide Additional Rent audit guide.

Yes — within your lease’s objection window. The strongest approach is a calm, documented request that cites the specific lease clause for each item, rather than a confrontation. The free check drafts exactly that.

Yes. Upload your lease and statement and see what it finds, tied to your clauses, at no cost.

CAM Proof is software that checks your lease and statement; it is not a law firm and nothing here is legal or tax advice. Figures and rules are general — your lease and Ontario law govern.