Common Rent & Deposit Mistakes to Avoid in Ontario

Renting a home in Ontario means understanding your rights and responsibilities—especially when it comes to rent payments and deposits. Unfortunately, misunderstandings and simple mistakes can cost tenants money, stress, and even their rental home. This article will help you avoid the most common pitfalls involving rent and deposits, offering clear guidance based on Ontario law.

Understanding Approved Deposits and Legal Limits

In Ontario, the law is clear about what deposits a landlord can request and how much can be charged. According to the Residential Tenancies Act, 2006^[1], the only allowed deposit is a ‘rent deposit’ (sometimes called a “security deposit”), which cannot exceed one month’s rent (or one rental period for week-to-week tenants).

• Landlords cannot ask for extra damage deposits.
• Rent deposits can only be used toward the last month’s rent—not damages.
• If interest is owed on your deposit, your landlord must pay it annually.

For an extensive breakdown on deposits, see Understanding Rental Deposits: What Tenants Need to Know.

Common Deposit Mistake: Paying Unapproved Fees

Don’t pay for ‘key deposits,’ 'pet deposits,' or 'damage deposits.' These are not permitted in most situations. If your landlord requests more than a legal rent deposit, ask for clarification in writing and refer to the Landlord and Tenant Board of Ontario^[2] for the official position.

Rent Payments: Timelines and Best Practices

Timely and documented rent payments are essential for a positive tenancy. Here’s how to avoid the most frequent rent errors:

• Always pay rent in full and on the agreed date (usually the 1st of the month unless otherwise stated).
• Use traceable payment methods (e-transfer, cheque, or bank transfer).
• Request receipts if not provided automatically. Landlords are required to give receipts upon request.

For a detailed look at your payment rights and tips, see Tenant's Guide to Paying Rent: Rights, Responsibilities, and Tips.

Common Rent Mistake: Cash Payments and No Receipts

Paying cash without a receipt is risky. If you ever have to prove payment to the Landlord and Tenant Board, documentation is your best defense.

What to Do When You're Asked for More Than the Law Allows

If your landlord asks for deposits or rent in advance beyond legal limits:

• Politely refuse and inform them of the rules under the Residential Tenancies Act.
• Document requests and communications in writing.
• Seek advice or file a complaint via the Landlord and Tenant Board.

Relevant Forms for Ontario Tenants

• N4 – Notice to End your Tenancy Early for Non-payment of Rent: Landlords use this form if rent is late. If you receive it due to late payment, you have 14 days to pay all owed rent in full. View Official N4 Form (PDF)
• T1 – Tenant Application About a Landlord Failing to Pay Interest/Returning Deposit: Tenants use this if the landlord fails to pay proper interest on the rent deposit or refuses to return it. Download Form T1

Example: If your landlord does not pay you annual interest on your last month's rent deposit, file Form T1 to recover what you’re owed.

Moving In and Moving Out: Your Deposit Rights

When you move in, pay no more than legal rent or key deposit. Upon moving out, you have a right to get your last month’s rent deposit applied to your final month. If you fulfill your agreement and don’t damage the unit, there should be no deductions.

For more tips, see How to Get Your Security Deposit Back with Interest When Moving Out.

Learn More About Provincial Tenant Rights

To discover more about your rights, see Tenant Rights in Ontario.

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1. What kinds of deposits can my landlord ask for in Ontario?
   Only a rent deposit (up to one month’s rent) and sometimes a refundable key deposit. Damage or pet deposits are generally not permitted.
2. What happens if I pay rent late?
   Your landlord can serve you a Notice to End Tenancy (Form N4). Paying all owed rent within 14 days usually cancels the notice.
3. Does my landlord have to pay interest on my deposit?
   Yes. By law, you must receive interest annually on your last month’s rent deposit at the guideline rate set by the province.
4. Can my landlord use my deposit for repairs or damages?
   No. The rent deposit can only be used for the last month’s rent, except for key replacement if a refundable deposit was made.
5. Where can I learn about other tenant rights in Ontario?
   The official Tenant Rights in Ontario page has a complete guide.

1. How do I request my rent deposit back if my landlord refuses?
   Use Form T1 (Tenant Application About a Landlord Failing to Pay Interest/Returning Deposit). Fill it out and submit it to the Landlord and Tenant Board with supporting documentation.
2. How can I avoid paying illegal deposits?
   Ask the landlord to list all requested deposits in writing. If anything beyond a rent or refundable key deposit is included, explain Ontario’s rules and refuse extra payments.
3. How do I prove I paid my rent?
   Always ask for and keep official receipts or use digital payment records/bank statements.

Key Takeaways

• Only pay deposits or advance rent allowed by Ontario law
• Keep documentation for every payment and agreement
• Act quickly if disputes arise—use official forms and resources

Need Help? Resources for Tenants

• Landlord and Tenant Board of Ontario – Guides, forms, and dispute resolution
• Tenant Rights and Responsibilities (Ontario government PDF)
• Local community legal clinics – Find legal help and tenant advocacy services in your area

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1. [1] Residential Tenancies Act, 2006 (Ontario)
2. [2] Landlord and Tenant Board of Ontario

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