Top 5 Essential Facts About Rent and Deposits in Ontario

For Ontario tenants, understanding how rent and deposits work is crucial for a secure rental experience. Whether you’re searching for your first apartment or preparing to move, these essential insights will help you avoid surprises and stand up for your rights. The following top 5 facts highlight what every renter needs to know about rent, deposits, and legal protections under Ontario's Residential Tenancies Act, 2006.^[1]

1. Only One Legal Deposit: The Rent Deposit

In Ontario, landlords can ask for a rent deposit—often called a "last month's rent deposit"—but cannot request a security deposit for damages. The rent deposit cannot exceed one month's rent or, for a rental paid weekly, one week’s rent. This deposit is applied to your final period of tenancy, covering the last month or week you live there.

• Landlords cannot charge extra deposits for pets or keys, with a few limited exceptions.
• Deposits must never be used for unpaid repairs or damage costs.

For a deeper breakdown, see Understanding Rental Deposits: What Tenants Need to Know.

2. Rent Must Be Paid on Time, in Full

Ontario tenants are required to pay rent in full and on time each month or week, according to the rental agreement. Common payment methods include e-transfer, cheque, or cash (if you request a receipt, your landlord must provide one!).

• If you’re struggling financially, talk to your landlord as soon as possible; missed payments can result in legal notices or eviction.
• Keep records of all rent payments.

To learn more, review the Tenant's Guide to Paying Rent: Rights, Responsibilities, and Tips.

3. Deposits Must Accrue Interest

Your landlord must pay you interest on your rent deposit every year. The interest rate matches the province's rent increase guideline (set annually by the Ontario government). This can be deducted from your rent or paid directly. Make sure your landlord provides this, as it's your legal right.

4. Rules About Rent Increases

Landlords can only increase rent once every 12 months, and they must give you at least 90 days’ written notice using Ontario’s required form:

• Form Name: Notice of Rent Increase (N1)
• When to Use: If your landlord wants to raise the rent, they must serve Form N1 at least 90 days before the proposed increase.
• Download Form N1 directly from Tribunals Ontario

Make sure the notice is filled out correctly. If not, you may be able to challenge the increase. For more details, check Understanding Rent Increases: What Tenants Need to Know.

5. How to Get Your Deposit Back

When moving out, your last month's rent deposit is applied to your final rental period. If your landlord asks for more money for damages, you can dispute this through the Landlord and Tenant Board. Prompt communication and proper notice help ensure a smooth departure and the return of funds owed to you.

• If you move out before using all your deposit, your landlord should refund the difference, including accrued interest.
• Document the unit’s condition during move-out to avoid misunderstandings.

If you need more guidance on reclaiming your deposit, see How to Get Your Security Deposit Back with Interest When Moving Out.

Tribunal and Legislation for Rent and Deposits

All disputes and applications related to rent, deposits, and tenancy are handled by the Landlord and Tenant Board (LTB). Ontario's main rental law is the Residential Tenancies Act, 2006.

Find rental homes across Canada on Houseme for more choices and control during your rental search.

For more information specific to tenants in Ontario, visit Tenant Rights in Ontario.

Frequently Asked Questions

1. Can my landlord request a damage deposit in Ontario?
   No, Ontario law only allows landlords to collect a rent deposit, not a damage or security deposit. This deposit is strictly for the final rental period’s rent.
2. How much notice does my landlord have to give for a rent increase?
   Landlords must give you at least 90 days’ written notice using the prescribed form before a rent increase takes effect.
3. Am I entitled to interest on my rent deposit?
   Yes, your landlord must pay you interest on the rent deposit each year, at a rate set by the province’s rent increase guideline.
4. What if my landlord does not return my deposit correctly?
   You can file a complaint or application with the Landlord and Tenant Board to recover any deposit or interest owed to you.

How To: Protect Your Deposit and Respond to Rent Increases in Ontario

1. How can I ensure my rent deposit is properly managed?
   Request a written receipt and keep records of your payment and any interest received each year.
2. How do I challenge an improper rent increase?
   If your landlord gives you an incorrect notice or doesn’t use the official N1 form, inform them in writing and consider filing with the Landlord and Tenant Board.
3. How do I apply for my deposit back if there’s a dispute?
   You can use the LTB’s Application About Tenant Rights (T2) form, available from Tribunals Ontario, to request your deposit and any unpaid interest.

Key Takeaways

• Ontario landlords can only ask for a rent deposit—never a damage or “security” deposit
• Interest must be paid every year on your rent deposit
• Know your rights on rent increases and always require proper documentation
• The Landlord and Tenant Board is the official body for rental disputes

Need Help? Resources for Tenants

• Landlord and Tenant Board (LTB): File complaints, forms, and applications online
• Ontario Tenant Hotline: 1-416-921-9494
• Ontario Government Rental Rights Guide: Comprehensive overview of tenant rights and responsibilities
• See Tenant Rights in Ontario for expanded tenant protections and procedures

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1. [1] Residential Tenancies Act, 2006, Government of Ontario.
2. [2] Landlord and Tenant Board Forms (LTB), Tribunals Ontario.
3. [3] Landlord and Tenant Board (LTB), Tribunals Ontario.

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