Understanding the rules around key deposits is important for any tenant signing a new lease. In Ontario, tenants often wonder whether landlords can require a deposit for keys, how much is allowed, and when that deposit should be returned. This article gives you clear, up-to-date information on Ontario law, what your rights are, and how you can protect yourself when moving in or out of a rental unit.

What Is a Key Deposit?

A key deposit is an amount of money a landlord collects from a tenant to cover the cost of replacing lost keys or key fobs. This is separate from a rent deposit or any other type of security deposit.

Are Key Deposits Legal in Ontario?

Yes, key deposits are permitted in Ontario, but there are strict rules set out by the Landlord and Tenant Board (LTB) and under the Residential Tenancies Act, 2006^[1]. A landlord can only require a key deposit if:

• The amount charged is no more than the actual cost of replacing the keys or key devices (for example, a building fob).
• The deposit is refundable, and the landlord must return it to you when you return the keys at the end of your tenancy.

This means landlords cannot profit by charging more than it costs to replace the key or fob. Key deposits must never be used as a general security deposit for damages or cleaning; those types of deposits are not allowed in Ontario.

Related Deposit Types: Know the Difference

A key deposit is just one type of payment a landlord might ask for. It’s important to understand how it differs from other legal and illegal deposits. For a full overview, see Understanding Rental Deposits: What Tenants Need to Know. Here’s a quick summary:

• Rent deposit (last month's rent): Allowed, but can only be used for the last rental period’s rent, not for repair or damages.
• Key deposit: Allowed, but only for cost of replacement and must be returned when keys are given back.
• Damage, cleaning, or security deposits: Not permitted in Ontario.

How Much Can a Landlord Charge for a Key Deposit?

The law states that the key deposit cannot exceed the “direct out-of-pocket” cost to replace the key, fob, or security device. For example, if a building access fob costs $50 from the building’s office, the landlord cannot charge more than $50 per fob. Always ask for a receipt or proof of the actual replacement cost.

When Should a Key Deposit Be Returned?

Your landlord is required to return your key deposit as soon as you provide all keys, fobs, or devices at the end of your tenancy. If your landlord does not return the deposit promptly, you should write a request and, if needed, make a claim to the Landlord and Tenant Board.

Filing a Claim at the Landlord and Tenant Board

If your landlord refuses to return your key deposit, you can file an application for return of money owed. Here’s what you need to know:

• Form T1: Tenant Application for a Rebate of Money the Landlord Owes
• Download Form T1 from the LTB website
• Use this form if you believe your landlord has withheld a legal deposit, like a key deposit, or overcharged you.
• With this form, include any evidence you have — for example, rental agreements, proof of payment, or written communication with your landlord.

Practical example: If you return your building fob to your landlord when you move out, and your landlord refuses to give your $50 deposit back, you can submit a Form T1 to the Landlord and Tenant Board to get your money.

Best Practices for Tenants Dealing with Key Deposits

• Request written documentation of any deposit, including amount, what it covers, and when it will be refunded.
• Insist on getting a receipt for your payment.
• Return all keys and fobs on the last day of your lease; document this if possible (email, photos, witness).
• Keep copies of all correspondence about your key deposit.
• Stay informed about your rights by visiting Tenant Rights in Ontario.

Knowing your rights ensures you will not be unfairly charged for typical Common Issues Tenants Face and How to Resolve Them.

For a friendly rental search with listings across Canada, Find rental homes across Canada on Houseme.

FAQ: Key Deposits for Tenants in Ontario

1. Can my landlord keep my key deposit if I lose a key?
   If you lose a key, the landlord can use your deposit to cover the actual replacement cost. If the cost exceeds the deposit, you may have to pay the difference.
2. Are landlords allowed to charge for both damage and key deposits?
   No. In Ontario, damage deposits are not legal. Only key deposits for the actual replacement cost are permitted.
3. What do I do if my landlord refuses to return my key deposit?
   You can ask for your money in writing and, if still not refunded, file Form T1 with the Landlord and Tenant Board for money owed.
4. Does a key deposit cover potential cleaning or damages?
   No, a key deposit is strictly for the replacement of keys or fobs. It cannot be used for cleaning or repairs.
5. Is my landlord required to provide receipts for the key deposit?
   Yes, you should always be given a receipt, and you have the right to request proof of the key or fob’s replacement cost.

Conclusion: Key Takeaways

• Key deposits are only legal if they match the cost to replace keys or fobs.
• Deposits must be refunded when keys are returned.
• If your deposit is wrongfully withheld, the Landlord and Tenant Board can help you get it back.

Staying informed and keeping records of payments or communications about your deposit can help resolve any disagreements quickly.

Need Help? Resources for Tenants

• Landlord and Tenant Board of Ontario – Information, applications, and forms.
• Ontario Rental Housing Guide
• Tenant Rights in Ontario
• Tenant advocacy or legal clinics in your area (search online by location or ask your local municipality for recommendations).

---

1. Residential Tenancies Act, 2006 (read the current Residential Tenancies Act).
2. Landlord and Tenant Board of Ontario (official site for forms and tenant protections).

Categories

Tenant Rights & Responsibilities Rent & Deposits Leases & Agreements Moving In / Out Maintenance & Repairs Evictions Roommates & Shared Housing Discrimination & Accessibility Utilities & Services Affordable Housing & Subsidies Dispute Resolution & LTB Safety & Security Privacy & Entry by Landlord Special Tenancy Situations Tenant Insurance & Liability Post-Eviction Resources Landlord Compliance & Penalties Legal Precedents & Case Summaries Mental Health & Tenancy