For tenants in Ontario, understanding how last month’s rent works is essential when renting a new place. This guide explains what last month’s rent means, your rights and obligations, and how this deposit protects both tenants and landlords under Ontario’s laws.

What Is Last Month’s Rent in Ontario?

When starting a new tenancy, landlords in Ontario can request a payment equal to one month’s rent, known as the last month’s rent deposit. This deposit is separate from regular rental payments and is used only for your final month in the rental unit—not for damages or other costs.

Legal Framework and Protections

• Ontario’s Residential Tenancies Act, 2006 governs rules for collecting, using, and returning last month’s rent.
• The official body handling disputes and questions is the Landlord and Tenant Board of Ontario.
• Landlords cannot require more than one month’s rent as a deposit, and it must be used exclusively for your last month’s rent during your tenancy.

For broader information on rental deposits, see Understanding Rental Deposits: What Tenants Need to Know.

How Last Month’s Rent Deposit Is Used

• Your deposit holds your rental until move-in and is later applied to your final month in the unit.
• If rent increases while you live there, your landlord can ask you to top up the deposit to match the new rent.
• The deposit cannot be used for damages or unpaid utilities. Only rent.

This ensures that your deposit is not withheld for reasons unrelated to your actual last month’s rent.

Top-Up Requirements When Rent Increases

When your rent goes up, the landlord is legally allowed to request additional funds to ensure the last month’s rent deposit matches the current monthly rent. However, they must give you proper written notice of a rent increase as per Ontario laws. To learn more, see Understanding Rent Increases: What Tenants Need to Know.

Official Forms for Last Month’s Rent in Ontario

There is no dedicated government-issued form for paying last month’s rent deposit, as this is typically handled within your lease or rental agreement. However, forms related to rent increases and deposits include:

• Form N1: Notice of Rent Increase (Official Link)
  When and how to use: If your landlord decides to increase rent and therefore your deposit must be topped up, they must provide you with Form N1 at least 90 days in advance. If your rent rises from $1,000 to $1,030, your landlord can ask for the $30 difference to update your last month’s rent deposit.

Protecting Your Deposit

• The last month’s rent deposit accrues interest, set annually by the province. Your landlord must pay you this interest yearly, either as a payment or a reduction in owed rent.
• If you plan to move out, provide written notice (usually 60 days) to your landlord. Your deposit is automatically applied to your last month’s rent payment.

For details on ending your tenancy, see How to Properly End Your Rental Agreement as a Tenant.

Remember: Your last month’s rent deposit protects you from needing to pay rent after notice is given, provided all legal requirements (such as proper notice) are met.

Important Rights and Responsibilities for Tenants

• Pay last month’s rent only as required by Ontario law—not additional deposits.
• Keep copies of all receipts and communications about your deposit and rent increases.
• The landlord must use the deposit only for your final month’s rent and nothing else.

For an overview of obligations for both tenants and landlords, visit Obligations of Landlords and Tenants: Rights and Responsibilities Explained.

Moving Out: How the Last Month’s Rent Is Applied

Once you give legal notice, the deposit will be applied to your final month’s rent. If your tenancy ends unexpectedly, consult with the Landlord and Tenant Board to ensure your rights are protected.

For a wider choice of rental homes across Ontario and to help plan your next move, you can Find rental homes across Canada on Houseme.

For a comprehensive summary, see Tenant Rights in Ontario.

Frequently Asked Questions About Last Month’s Rent

1. Can my landlord use the last month’s rent deposit for damages or cleaning?
   No, Ontario law requires this deposit only be used for your final month’s rent—not for repairs, damages or cleaning costs.
2. What if my rent increases during my tenancy?
   Your landlord can ask you to pay the difference to match the new rent. They must first provide a proper written rent increase notice using Form N1.
3. Do I get interest on my last month’s rent deposit?
   Yes, landlords must pay tenants annual interest, set by Ontario, on this deposit.
4. What happens to my deposit if I move out early without giving proper notice?
   If you don’t give required notice, your deposit may not fully cover your last month’s rent. Consult the Landlord and Tenant Board for advice if this situation arises.

Key Takeaways for Tenants

• Last month’s rent deposit in Ontario is protected by law and used only for your final month’s rent.
• Interest must be paid annually on this deposit.
• Make sure to give proper written notice when ending your tenancy.

Keep clear records and know your rights to ensure a smooth experience when entering or leaving a rental.

Need Help? Resources for Tenants

• Landlord and Tenant Board of Ontario – contact and application instructions
• Ontario Government: Renting in Ontario – Your Rights
• Tenant advocacy support is available at your local community legal clinic or through the Your Legal Rights Ontario portal.

---

1. Residential Tenancies Act, 2006 (Ontario): Full text here
2. Landlord and Tenant Board (Ontario): Official site and forms
3. Ontario rent deposit interest rates and information: Guide to Ontario’s Standard Lease – Section 7

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