diff --git a/tools/spectral/ipa/__tests__/IPA118NoAdditionalPropertiesFalse.test.js b/tools/spectral/ipa/__tests__/IPA118NoAdditionalPropertiesFalse.test.js
new file mode 100644
index 0000000000..e5ce9dce7a
--- /dev/null
+++ b/tools/spectral/ipa/__tests__/IPA118NoAdditionalPropertiesFalse.test.js
@@ -0,0 +1,218 @@
+import testRule from './__helpers__/testRule';
+import { DiagnosticSeverity } from '@stoplight/types';
+
+testRule('xgen-IPA-118-no-additional-properties-false', [
+  {
+    name: 'valid without additionalProperties',
+    document: {
+      components: {
+        schemas: {
+          ExampleSchema: {
+            type: 'object',
+            properties: {
+              name: { type: 'string' },
+              value: { type: 'integer' },
+            },
+          },
+        },
+      },
+    },
+    errors: [],
+  },
+  {
+    name: 'valid with additionalProperties: true',
+    document: {
+      components: {
+        schemas: {
+          ExampleSchema: {
+            type: 'object',
+            properties: {
+              name: { type: 'string' },
+            },
+            additionalProperties: true,
+          },
+        },
+      },
+    },
+    errors: [],
+  },
+  {
+    name: 'valid with additionalProperties as schema',
+    document: {
+      components: {
+        schemas: {
+          ExampleSchema: {
+            type: 'object',
+            properties: {
+              name: { type: 'string' },
+            },
+            additionalProperties: {
+              type: 'string',
+            },
+          },
+        },
+      },
+    },
+    errors: [],
+  },
+  {
+    name: 'invalid with additionalProperties: false',
+    document: {
+      components: {
+        schemas: {
+          ExampleSchema: {
+            type: 'object',
+            properties: {
+              name: { type: 'string' },
+            },
+            additionalProperties: false,
+          },
+          ReferencedSchema: {
+            type: 'object',
+            properties: {
+              property: { $ref: '#/components/schemas/ExampleSchema' },
+            },
+          },
+        },
+      },
+    },
+    errors: [
+      {
+        code: 'xgen-IPA-118-no-additional-properties-false',
+        message:
+          "Schema must not use 'additionalProperties: false'. Consider using 'additionalProperties: true' or omitting the property.",
+        path: ['components', 'schemas', 'ExampleSchema'],
+        severity: DiagnosticSeverity.Warning,
+      },
+    ],
+  },
+  {
+    name: 'invalid with nested additionalProperties: false',
+    document: {
+      components: {
+        schemas: {
+          ParentSchema: {
+            type: 'object',
+            properties: {
+              child: {
+                type: 'object',
+                properties: {
+                  name: { type: 'string' },
+                },
+                additionalProperties: false,
+              },
+            },
+          },
+        },
+      },
+    },
+    errors: [
+      {
+        code: 'xgen-IPA-118-no-additional-properties-false',
+        message:
+          "Schema must not use 'additionalProperties: false'. Consider using 'additionalProperties: true' or omitting the property.",
+        path: ['components', 'schemas', 'ParentSchema', 'properties', 'child'],
+        severity: DiagnosticSeverity.Warning,
+      },
+    ],
+  },
+  {
+    name: 'invalid with multiple nested additionalProperties: false',
+    document: {
+      components: {
+        schemas: {
+          ParentSchema: {
+            type: 'object',
+            properties: {
+              child: {
+                type: 'object',
+                properties: {
+                  name: { type: 'string' },
+                },
+                additionalProperties: false,
+              },
+            },
+            additionalProperties: false,
+          },
+        },
+      },
+    },
+    errors: [
+      {
+        code: 'xgen-IPA-118-no-additional-properties-false',
+        message:
+          "Schema must not use 'additionalProperties: false'. Consider using 'additionalProperties: true' or omitting the property.",
+        path: ['components', 'schemas', 'ParentSchema'],
+        severity: DiagnosticSeverity.Warning,
+      },
+      {
+        code: 'xgen-IPA-118-no-additional-properties-false',
+        message:
+          "Schema must not use 'additionalProperties: false'. Consider using 'additionalProperties: true' or omitting the property.",
+        path: ['components', 'schemas', 'ParentSchema', 'properties', 'child'],
+        severity: DiagnosticSeverity.Warning,
+      },
+    ],
+  },
+  {
+    name: 'with exception',
+    document: {
+      components: {
+        schemas: {
+          ExampleSchema: {
+            type: 'object',
+            'x-xgen-IPA-exception': {
+              'xgen-IPA-118-no-additional-properties-false': 'Exception reason',
+            },
+            properties: {
+              name: { type: 'string' },
+            },
+            additionalProperties: false,
+          },
+          ParentSchema: {
+            type: 'object',
+            'x-xgen-IPA-exception': {
+              'xgen-IPA-118-no-additional-properties-false': 'Exception reason',
+            },
+            properties: {
+              child: {
+                type: 'object',
+                properties: {
+                  name: { type: 'string' },
+                },
+                additionalProperties: false,
+              },
+            },
+          },
+        },
+      },
+    },
+    errors: [],
+  },
+  {
+    name: 'invalid with multiple nested additionalProperties: false - exceptions',
+    document: {
+      components: {
+        schemas: {
+          ParentSchema: {
+            type: 'object',
+            properties: {
+              child: {
+                type: 'object',
+                properties: {
+                  name: { type: 'string' },
+                },
+                additionalProperties: false,
+              },
+            },
+            additionalProperties: false,
+            'x-xgen-IPA-exception': {
+              'xgen-IPA-118-no-additional-properties-false': 'Exception reason',
+            },
+          },
+        },
+      },
+    },
+    errors: [],
+  },
+]);
diff --git a/tools/spectral/ipa/__tests__/utils/compareUtils.test.js b/tools/spectral/ipa/__tests__/utils/compareUtils.test.js
index 1fe52c9d92..3f223e2e13 100644
--- a/tools/spectral/ipa/__tests__/utils/compareUtils.test.js
+++ b/tools/spectral/ipa/__tests__/utils/compareUtils.test.js
@@ -1,5 +1,6 @@
 import { describe, expect, it } from '@jest/globals';
 import {
+  findAdditionalPropertiesFalsePaths,
   isDeepEqual,
   removePropertiesByFlag,
   removePropertyKeys,
@@ -329,3 +330,157 @@ describe('removeRequestProperties', () => {
     expect(removeRequestProperties(input)).toEqual(expected);
   });
 });
+
+describe('findAdditionalPropertiesFalsePaths', () => {
+  it('finds additionalProperties:false at root level', () => {
+    const schema = {
+      type: 'object',
+      properties: {
+        name: { type: 'string' },
+      },
+      additionalProperties: false,
+    };
+
+    const results = findAdditionalPropertiesFalsePaths(schema, ['root']);
+    expect(results).toEqual([['root']]);
+  });
+
+  it('finds additionalProperties:false in nested properties', () => {
+    const schema = {
+      type: 'object',
+      properties: {
+        user: {
+          type: 'object',
+          properties: {
+            address: {
+              type: 'object',
+              additionalProperties: false,
+            },
+          },
+        },
+      },
+    };
+
+    const results = findAdditionalPropertiesFalsePaths(schema, ['root']);
+    expect(results).toEqual([['root', 'properties', 'user', 'properties', 'address']]);
+  });
+
+  it('finds additionalProperties:false in array items', () => {
+    const schema = {
+      type: 'array',
+      items: {
+        type: 'object',
+        additionalProperties: false,
+      },
+    };
+
+    const results = findAdditionalPropertiesFalsePaths(schema, ['root']);
+    expect(results).toEqual([['root', 'items']]);
+  });
+
+  it('finds additionalProperties:false in composition keywords', () => {
+    const schema = {
+      oneOf: [
+        {
+          type: 'object',
+          additionalProperties: false,
+        },
+        {
+          type: 'object',
+          properties: {
+            name: { type: 'string' },
+          },
+        },
+      ],
+    };
+
+    const results = findAdditionalPropertiesFalsePaths(schema, ['root']);
+    expect(results).toEqual([['root', 'oneOf', '0']]);
+  });
+
+  it('finds multiple additionalProperties:false occurrences', () => {
+    const schema = {
+      type: 'object',
+      additionalProperties: false,
+      properties: {
+        user: {
+          type: 'object',
+          additionalProperties: false,
+          properties: {
+            addresses: {
+              type: 'array',
+              items: {
+                type: 'object',
+                additionalProperties: false,
+              },
+            },
+          },
+        },
+        metadata: {
+          allOf: [
+            {
+              type: 'object',
+              additionalProperties: false,
+            },
+          ],
+        },
+      },
+    };
+
+    const results = findAdditionalPropertiesFalsePaths(schema, ['root']);
+    expect(results).toEqual([
+      ['root'],
+      ['root', 'properties', 'user'],
+      ['root', 'properties', 'user', 'properties', 'addresses', 'items'],
+      ['root', 'properties', 'metadata', 'allOf', '0'],
+    ]);
+  });
+
+  it('handles deeply nested structures', () => {
+    const schema = {
+      type: 'object',
+      properties: {
+        level1: {
+          type: 'object',
+          properties: {
+            level2: {
+              type: 'object',
+              properties: {
+                level3: {
+                  type: 'object',
+                  properties: {
+                    level4: {
+                      type: 'object',
+                      additionalProperties: false,
+                    },
+                  },
+                },
+              },
+            },
+          },
+        },
+      },
+    };
+
+    const results = findAdditionalPropertiesFalsePaths(schema, ['root']);
+    expect(results).toEqual([
+      ['root', 'properties', 'level1', 'properties', 'level2', 'properties', 'level3', 'properties', 'level4'],
+    ]);
+  });
+
+  it('does not find additionalProperties:true or schema objects', () => {
+    const schema = {
+      type: 'object',
+      additionalProperties: true,
+      properties: {
+        user: {
+          type: 'object',
+          additionalProperties: { type: 'string' },
+        },
+      },
+    };
+
+    const results = findAdditionalPropertiesFalsePaths(schema, ['root']);
+    expect(results).toEqual([]);
+  });
+});
diff --git a/tools/spectral/ipa/ipa-spectral.yaml b/tools/spectral/ipa/ipa-spectral.yaml
index 78887b9858..c496d1dd0c 100644
--- a/tools/spectral/ipa/ipa-spectral.yaml
+++ b/tools/spectral/ipa/ipa-spectral.yaml
@@ -12,6 +12,7 @@ extends:
   - ./rulesets/IPA-113.yaml
   - ./rulesets/IPA-114.yaml
   - ./rulesets/IPA-117.yaml
+  - ./rulesets/IPA-118.yaml
   - ./rulesets/IPA-123.yaml
   - ./rulesets/IPA-125.yaml
 
@@ -41,3 +42,15 @@ overrides:
       - '**#/components/schemas/UserSecurity/properties/customerX509' # unable to document exceptions, to be covered by CLOUDP-308286
     rules:
       xgen-IPA-112-field-names-are-camel-case: 'off'
+  - files:
+      - '**#/components/schemas/DataLakeS3StoreSettings/allOf/1/properties/additionalStorageClasses' # unable to document exceptions, to be covered by CLOUDP-293178
+      - '**#/components/schemas/DataLakeDatabaseDataSourceSettings/properties/databaseRegex' # unable to document exceptions, to be covered by CLOUDP-293178
+      - '**#/components/schemas/DataLakeDatabaseDataSourceSettings/properties/collectionRegex' # unable to document exceptions, to be covered by CLOUDP-293178
+    rules:
+      xgen-IPA-117-description-should-not-use-inline-links: 'off'
+  - files:
+      - '**#/paths/~1api~1atlas~1v2~1unauth~1openapi~1versions' # external reference, to be covered by CLOUDP-309694
+      - '**#/paths/~1api~1atlas~1v2~1openapi~1info' # external reference, to be covered by CLOUDP-309694
+      - '**#/paths/~1rest~1unauth~1version' # external reference, to be covered by CLOUDP-309694
+    rules:
+      xgen-IPA-114-error-responses-refer-to-api-error: 'off'
diff --git a/tools/spectral/ipa/rulesets/IPA-118.yaml b/tools/spectral/ipa/rulesets/IPA-118.yaml
new file mode 100644
index 0000000000..3634c71737
--- /dev/null
+++ b/tools/spectral/ipa/rulesets/IPA-118.yaml
@@ -0,0 +1,20 @@
+# IPA-118: Extensible by Default
+# http://go/ipa/118
+
+functions:
+  - IPA118NoAdditionalPropertiesFalse
+
+rules:
+  xgen-IPA-118-no-additional-properties-false:
+    description: |
+      Schemas must not use `additionalProperties: false`
+
+      ##### Implementation details
+      This rule checks that schemas don't restrict additional properties by setting `additionalProperties: false`.
+      Schemas without explicit `additionalProperties` settings (which default to true) or with `additionalProperties` set to `true` are compliant.
+      This rule checks all nested schemas, but only parent schemas can be marked for exception.
+    message: '{{error}} https://mdb.link/mongodb-atlas-openapi-validation#xgen-IPA-118-no-additional-properties-false'
+    severity: warn
+    given: '$.components.schemas[*]'
+    then:
+      function: 'IPA118NoAdditionalPropertiesFalse'
diff --git a/tools/spectral/ipa/rulesets/README.md b/tools/spectral/ipa/rulesets/README.md
index 75a3bf4435..8c8a49fb7b 100644
--- a/tools/spectral/ipa/rulesets/README.md
+++ b/tools/spectral/ipa/rulesets/README.md
@@ -772,6 +772,22 @@ The rule checks for the presence of the `schema`, `examples` or `example` proper
 
 
 
+### IPA-118
+
+Rules are based on [http://go/ipa/IPA-118](http://go/ipa/IPA-118).
+
+#### xgen-IPA-118-no-additional-properties-false
+
+ ![warn](https://img.shields.io/badge/warning-yellow) 
+Schemas must not use `additionalProperties: false`
+
+##### Implementation details
+This rule checks that schemas don't restrict additional properties by setting `additionalProperties: false`.
+Schemas without explicit `additionalProperties` settings (which default to true) or with `additionalProperties` set to `true` are compliant.
+This rule checks all nested schemas, but only parent schemas can be marked for exception.
+
+
+
 ### IPA-123
 
 Rules are based on [http://go/ipa/IPA-123](http://go/ipa/IPA-123).
diff --git a/tools/spectral/ipa/rulesets/functions/IPA118NoAdditionalPropertiesFalse.js b/tools/spectral/ipa/rulesets/functions/IPA118NoAdditionalPropertiesFalse.js
new file mode 100644
index 0000000000..e72a647350
--- /dev/null
+++ b/tools/spectral/ipa/rulesets/functions/IPA118NoAdditionalPropertiesFalse.js
@@ -0,0 +1,53 @@
+import { hasException } from './utils/exceptions.js';
+import {
+  collectAdoption,
+  collectAndReturnViolation,
+  collectException,
+  handleInternalError,
+} from './utils/collectionUtils.js';
+import { resolveObject } from './utils/componentUtils.js';
+import { findAdditionalPropertiesFalsePaths } from './utils/compareUtils.js';
+
+const RULE_NAME = 'xgen-IPA-118-no-additional-properties-false';
+const ERROR_MESSAGE = `Schema must not use 'additionalProperties: false'. Consider using 'additionalProperties: true' or omitting the property.`;
+/**
+ * Validates that schemas don't use additionalProperties: false
+ *
+ * @param {object} input - The schema object to check
+ * @param {object} _ - Rule options (unused)
+ * @param {object} context - The context object containing path and document information
+ */
+export default (input, _, { path, documentInventory }) => {
+  const oas = documentInventory.unresolved;
+  const schemaObject = resolveObject(oas, path);
+
+  if (hasException(input, RULE_NAME)) {
+    collectException(input, RULE_NAME, path);
+    return;
+  }
+
+  const errors = checkViolationsAndReturnErrors(schemaObject, path);
+  if (errors.length > 0) {
+    return collectAndReturnViolation(path, RULE_NAME, errors);
+  }
+
+  collectAdoption(path, RULE_NAME);
+};
+
+function checkViolationsAndReturnErrors(schemaObject, path) {
+  try {
+    const errors = [];
+
+    const results = findAdditionalPropertiesFalsePaths(schemaObject, path);
+    for (const resultPath of results) {
+      errors.push({
+        message: ERROR_MESSAGE,
+        path: resultPath,
+      });
+    }
+
+    return errors;
+  } catch (e) {
+    handleInternalError(RULE_NAME, path, e);
+  }
+}
diff --git a/tools/spectral/ipa/rulesets/functions/utils/compareUtils.js b/tools/spectral/ipa/rulesets/functions/utils/compareUtils.js
index 3b0021d6f9..d8e1a74683 100644
--- a/tools/spectral/ipa/rulesets/functions/utils/compareUtils.js
+++ b/tools/spectral/ipa/rulesets/functions/utils/compareUtils.js
@@ -147,3 +147,49 @@ export function removeRequestProperties(schema) {
   let result = removePropertiesByFlag(schema, 'writeOnly');
   return removePropertyKeys(result, 'title', 'description', 'required');
 }
+
+/**
+ * Recursively finds all paths where additionalProperties is set to false in a schema
+ * @param {object} schema - The schema to analyze
+ * @param {Array<string>} currentPath - The current path (for recursion)
+ * @param {Array<Array<string>>} results - Accumulator for paths with additionalProperties: false
+ * @returns {Array<Array<string>>} Array of paths where additionalProperties: false was found
+ */
+export function findAdditionalPropertiesFalsePaths(schema, currentPath = [], results = []) {
+  if (!schema || typeof schema !== 'object') {
+    return results;
+  }
+
+  // Check if this schema has additionalProperties: false
+  if (schema.additionalProperties === false) {
+    results.push([...currentPath]);
+  }
+
+  // Check properties
+  if (schema.properties && typeof schema.properties === 'object') {
+    for (const [propName, propValue] of Object.entries(schema.properties)) {
+      if (typeof propValue === 'object') {
+        findAdditionalPropertiesFalsePaths(propValue, [...currentPath, 'properties', propName], results);
+      }
+    }
+  }
+
+  // Check items for arrays
+  if (schema.items && typeof schema.items === 'object') {
+    findAdditionalPropertiesFalsePaths(schema.items, [...currentPath, 'items'], results);
+  }
+
+  // Check other schema composition keywords
+  const compositionKeywords = ['allOf', 'anyOf', 'oneOf'];
+  for (const keyword of compositionKeywords) {
+    if (Array.isArray(schema[keyword])) {
+      schema[keyword].forEach((subSchema, index) => {
+        if (typeof subSchema === 'object') {
+          findAdditionalPropertiesFalsePaths(subSchema, [...currentPath, keyword, index.toString()], results);
+        }
+      });
+    }
+  }
+
+  return results;
+}