PropertyMonitorTOFree
Renting

Move-in week: the only deposit that's legal in Ontario

September 1 is the biggest lease-turnover day in Toronto, and it's also peak season for illegal deposits. Here's what a landlord can actually collect, the interest they owe you, and what to do if you already paid something you shouldn't have.

2 min read

September 1 is the biggest move-in day on the Toronto rental calendar — and the week when the most money changes hands between tenants and landlords. Some of that money shouldn't. Ontario's deposit rules are stricter than most renters (and a surprising number of landlords) realize, and the difference can be worth a month's rent.

Here's what the Residential Tenancies Act actually allows.

A landlord can collect one deposit: a rent deposit of at most one month's rent (or one rental period, if you pay weekly). And it can only ever be used for one thing — your last month of rent. It's not a damage fund, a cleaning fund, or a hostage.

The one other charge that's allowed is a key deposit, and only if it's refundable and no more than the actual replacement cost of the keys or fob.

  • Damage deposits — illegal in Ontario, full stop. This surprises people who've rented in other provinces, where they're standard.
  • Pet deposits or pet fees — a landlord can't charge extra because you have a cat, a dog, or a goldfish. (A condo's rules are a separate question — but the deposit is not.)
  • Non-refundable "administration," "move-in," or "cleaning" fees — not on the list of permitted charges.
  • Deducting damage from your last month's rent deposit — without your written agreement, the landlord's route for damage claims runs through the Landlord and Tenant Board, not your deposit.

If a listing or lease asks for "first and last plus a $500 damage deposit," the first and last part is fine. The $500 is not — whatever the lease says. You can't sign away RTA protections.

Your deposit earns interest — really

Landlords owe you interest on your rent deposit every year, at the province's rent-increase guideline rate. For 2026 that's 2.1%; the 2027 guideline drops it to 1.9%. On a $2,500 deposit, 2026's rate is about $52.

Most landlords never pay it. If yours doesn't, you're allowed to deduct the interest from a future rent payment. The flip side: when your rent goes up, your landlord can ask you to top the deposit up to match — and can put the interest owed toward that top-up.

Already paid an illegal charge?

You can get it back. The route is a T1 application to the Landlord and Tenant Board — "Tenant Application for a Rebate" — and you have one year from the date you paid the illegal charge to file. Keep the e-transfer record or receipt; that's your evidence.

Before the deposit leaves your account

The best time to think about any of this is before you pay. A deposit is hard to claw back from a landlord who's already ignoring the rules — and a landlord who charges illegal deposits often shows up in the City's enforcement record too. Spend ten minutes checking the landlord's record first: pull the building's property snapshot to see open orders, violations, and its RentSafeTO score in one view, and turn on monitoring so you hear about new orders while you live there.

More on this