In a tight GTA rental market, students and newcomers are often asked for far more money up front than they expected: a "damage deposit," a "pet deposit," a cleaning fee, several months of rent in advance. Many pay without question because they are afraid of losing the unit. But Ontario law sets clear limits on the deposits a residential landlord can collect — and money taken in breach of those limits can be recovered.
Under the Residential Tenancies Act, 2006, a landlord can only collect:
That's the full list. The province's guide to the standard lease states that a tenant does not have to provide any other form of deposit, such as pet or damage deposits, and that if the tenant pays anything more, they can apply to the Landlord and Tenant Board (LTB) to get the money back.
A landlord can require a rent deposit on or before the tenancy begins, but:
That last point surprises many people on both sides. A landlord who believes a tenant damaged the unit cannot simply keep the last month's rent deposit to cover the repairs; the deposit must go toward the last month's rent.
Your landlord must pay you interest on the rent deposit every year. The interest rate is not chosen by the landlord: under the Act, it is equal to the rent increase guideline in effect when the interest payment becomes due.
If your rent goes up lawfully, the landlord can ask you to top up the deposit so it matches the new rent — and the landlord can use the interest owed on the deposit to do that top-up. Either way, the interest belongs to you, and it should not simply disappear.
If the landlord collects a deposit for keys, fobs, or entry cards, it must be refundable and must be returned when you give back the keys at the end of the tenancy. Separately, the landlord can charge you for extra or replacement keys you ask for, but that charge cannot be more than the actual cost of the keys.
The LTB treats "key money," premiums, fees, bonuses, commissions, and penalties as illegal charges — whether or not they are described as refundable. If you are asked to pay something outside the rent, the last month's rent deposit, or a refundable key deposit, ask what it is for and get advice before you pay.
A current or former tenant can file a Form T1 (Tenant Application for a Rebate of Money the Landlord Owes) with the LTB if the landlord, among other things:
Timing matters. The LTB's instructions say you can only apply for illegal charges paid in the last 12 months, and that applications about an unreturned rent deposit must be made within 12 months of the date the landlord kept the money. Don't wait until a year has slipped by.
This article is general information only and is not legal advice. Every case turns on its own facts.
Whether you are a tenant trying to recover an illegal deposit or a landlord who wants to collect deposits the right way, WP Legal Professional represents clients before the Landlord and Tenant Board across the Greater Toronto Area, in English, Cantonese, Mandarin, and Korean. Learn more about our landlord and tenant dispute services.
Act now. The 12-month clock may already be running — contact us for a confidential consultation.
