As a tenant in Ontario, knowing your rights around rental deposits is essential—especially when it comes to what your landlord can legally keep. Many renters worry about losing their deposit after moving out, but Ontario laws are designed to protect you while ensuring landlords are treated fairly. This guide explains deposit rules, your rights, and the steps to take if there's a dispute under the Residential Tenancies Act, 2006.

Main Types of Deposits in Ontario Rentals

In Ontario, landlords are allowed to collect certain deposits—but with strict limitations set by law. Understanding what is (and isn't) legal helps you avoid confusion or unfair requests.

• Last Month’s Rent Deposit (LMR): This is the only deposit landlords can legally request before you move in.
• Key Deposit: Allowed if it matches the cost of the key or access device, but it must be refunded when keys are returned.
• Security Deposits: Landlords cannot charge or keep security deposits for damages or cleaning.

For a detailed overview, read Understanding Rental Deposits: What Tenants Need to Know.

When Can a Landlord Keep Your Deposit?

Landlords in Ontario can only keep your deposit to cover last month's rent. They cannot use the deposit for:

• Repairing damage (beyond normal wear and tear)
• Cleaning the unit
• Outstanding utility bills

If your landlord tries to keep any portion of your deposit for reasons other than rent, they are not following provincial law.

It’s important to protect yourself by documenting the move-in and move-out condition of your rental. Consider following the Guide to the Initial Rental Property Inspection for Tenants when you start your tenancy.

How to Get Your Deposit Back in Ontario

After you move out and pay all required rent, your landlord must return any key deposit. If you gave a last month's rent deposit, it should be applied to the last month you live in the unit. If you believe your landlord is withholding your deposit unfairly, you have options for recourse.

Step-by-Step: Disputing Deposit Withholding

If your landlord refuses to return a deposit or applies it incorrectly, you can apply to the Landlord and Tenant Board (LTB) of Ontario.

• Form T1: Tenant Application for a Rebate of Money the Landlord Owes
  Use when your landlord keeps a deposit that they are not supposed to—such as a key or "security" deposit.
  Find Form T1 on the official Landlord and Tenant Board website.
  
  Tip: Fill out Form T1 as soon as you realize your deposit is being unfairly withheld. Gather evidence like your lease, receipts, and move-out photos.

The Landlord and Tenant Board handles all rental disputes. Learn more or file documents online at the Landlord and Tenant Board.

Common Deposit Disputes: Examples

• Your landlord tries to keep your last month’s rent deposit for cleaning fees after you move out.
• A key deposit refund is refused, even though you returned all keys.
• You’re charged for damage, but you only paid a last month's rent deposit (not a security deposit).

In all these scenarios, Ontario law sides with the tenant if proper procedures are followed.

Understanding Tenant Rights and Responsibilities

Throughout your tenancy, both you and your landlord have legal responsibilities. For a broader picture of rights and obligations, see Obligations of Landlords and Tenants: Rights and Responsibilities Explained. Staying aware of these can help prevent misunderstandings about deposits and other key issues.

To see more about your rights as a renter, view Tenant Rights in Ontario.

Stay Informed as a Tenant

Whether protecting your deposit or preparing to move, using trusted resources can keep your renting experience smooth. Search Canadian rentals with interactive map view and stay connected with up-to-date information for Ontario tenants.

FAQ: Ontario Deposit Rules and Your Rights

1. Can my landlord ask for a security deposit in Ontario?
   No, landlords can only collect a last month’s rent deposit and, if needed, a key deposit (for the cost of the key only). Security deposits for damages are not allowed.
2. What happens to my last month's rent deposit when I move out?
   It is used as payment for your final month’s rent. The landlord cannot keep it for damages or cleaning.
3. How do I get my key deposit back?
   Return all keys and request your key deposit refund. If it’s not returned, you can apply to the Landlord and Tenant Board.
4. Which form do I use if my landlord refuses to return my deposit?
   Use Form T1: Tenant Application for a Rebate of Money the Landlord Owes.
5. Where can I file a deposit dispute in Ontario?
   At the Landlord and Tenant Board. It handles all official tenancy matters in Ontario.

Key Takeaways

• Ontario law only allows landlords to collect a last month's rent deposit and a refundable key deposit—not security deposits.
• If your deposit is unfairly withheld, file Form T1 with the Landlord and Tenant Board promptly.
• Keep clear records and understand your responsibilities to ensure a smooth move-out and refund process.

Remember, being informed and proactive is your best tool when renting in Ontario.

Need Help? Resources for Tenants

• Landlord and Tenant Board (LTB): File a deposit dispute or check your case status.
• Your Rights under the Residential Tenancies Act: Official government resource on Ontario tenant laws.
• For more, see local tenant advocacy centres or contact the Community Legal Education Ontario (CLEO).

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1. Residential Tenancies Act, 2006 (Ontario)
2. Landlord and Tenant Board – Ontario
3. LTB Official Forms for Tenants
4. Your Rights under the Residential Tenancies Act

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