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Ontario tenant rights

A "damage deposit" in Ontario? Usually not allowed.

Your landlord cannot charge a damage deposit, a security deposit, a pet deposit, or a cleaning deposit. The only deposit allowed is last month's rent — capped at one month, and it earns you interest every year. Here's what's true, and how to get back anything you shouldn't have paid.

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In 30 seconds, here's what's true

  • The only legal deposit in Ontario is last month's rent. It can be no more than one month's rent (or one rent period).
  • Damage deposits, security deposits, pet deposits, and cleaning deposits are all illegal — even if you agreed to pay one.
  • Your last month's rent deposit can only be used for your last month of rent. It can never be kept for damage or cleaning.
  • Your landlord must pay you interest on the deposit every year. The 2026 rate is 2.1% (it was 2.5% in 2025).
  • If you were charged an illegal deposit, you can get it back — file LTB Form T1 within one year of paying it.

The steps your landlord must follow

  1. Figure out what you actually paid

    Look at your lease and receipts. Was the money called "last month's rent," or was it a "damage," "security," "pet," or "cleaning" deposit? Write down the date and amount of each one. The name and purpose matter.

  2. Check it against the rule

    In Ontario the only legal deposit is last month's rent, capped at one month. A key deposit is allowed only if it equals the real cost of replacing the key. Anything else — damage, security, pet, cleaning — is not allowed, even if you signed something agreeing to it.

  3. Ask for it back in writing

    Send your landlord a short, polite message asking for the illegal deposit back, or for any unpaid interest you're owed. Keep a copy. Many landlords fix it once they realize the rule.

  4. Save your proof

    Gather receipts, e-transfer records, bank statements, the lease, and any texts or emails about the money. This is what you'll need if you have to apply to the Board.

  5. File a T1 if they say no

    If your landlord won't return an illegal charge, you can file LTB Form T1 to get it back — but you must apply within one year of when you first paid it. The Board can order your money returned.

What to do next

  • Find your lease and every deposit receipt.
  • Write down the date, amount, and name of each deposit you paid.
  • Check whether any of them were a damage, security, pet, or cleaning deposit (illegal).
  • Calculate any unpaid interest (2.1% for 2026; 2.5% for 2025).
  • Send a short, polite written request for the refund or interest. Keep a copy.
  • Set a yearly reminder for your deposit interest.
  • Mark the one-year T1 deadline from when you paid an illegal charge.
  • Use PLAIN to organize your records and track your deadlines.

Common myths

MythReality
My landlord can keep my deposit for damage.No. Last month's rent can only be applied to your last month of rent — never to damage or cleaning. Damage deposits are illegal in Ontario.
Security deposits are normal and legal.Not in Ontario. The only legal deposit is last month's rent. A security or damage deposit is not allowed, even if it's in your lease.
I don't get interest on my deposit.You do — every year, at the rent-increase guideline rate. For 2026 that's 2.1%. If your landlord doesn't pay it, you can deduct it from your rent.
My landlord can charge first, last, AND a damage deposit.No. The most they can collect is one month, as last month's rent. Asking for more on top of that is not allowed.
My landlord kept my deposit, so it's gone.You can file LTB Form T1 to get an illegal charge back, as long as you apply within one year of paying it. The Board can order it returned.
I have to give post-dated cheques.No. You cannot be required to give post-dated cheques or automatic payments. You choose how to pay your rent.
A pet deposit is fine since I have a pet.There are no pet deposits in Ontario. A landlord also cannot collect a deposit for possible pet damage.
A $200 key deposit is allowed.Only if a key actually costs about $200 to replace. A key deposit must equal the real replacement cost and be refundable — otherwise it's an illegal deposit.

Last reviewed June 2026

Written and reviewed by the founder of PLAIN, checked against primary government and legal sources. How we research these guides

Sources

PLAIN gives legal information, not legal advice. It is not a substitute for a lawyer or paralegal — and we'll point you to free ones. Laws change; we review these pages regularly, but always confirm current rules with the Landlord and Tenant Board.

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