Deposit Dilemma in Ontario

Understanding Ontario’s deposit rules for landlords.

This in-depth article explores one of the most critical and commonly misunderstood issues facing Ontario landlords: the legal limitations around rental deposits. It clearly explains the distinction between a security deposit—which is not permitted under Ontario’s Residential Tenancies Act—and a last month’s rent deposit, which is the only type of deposit landlords are legally allowed to collect. The article walks readers through scenarios where landlords often unintentionally break the law, such as requesting damage deposits or pet deposits, and the risks of doing so. It also sheds light on key deposits, when they are allowed, and how they must be handled. The piece emphasizes the importance of documenting all financial transactions with tenants, outlines the annual interest landlords must pay on last month’s rent, and provides step-by-step compliance strategies to avoid fines, tenant complaints, or disputes at the Landlord and Tenant Board (LTB). Whether you’re a first-time property owner or a seasoned investor managing multiple units, this article provides practical guidance to keep your rental operation both profitable and fully aligned with Ontario’s strict housing legislation.
https://rentzen.ca/blog/deposit-dilemma-ontario-rules-security-deposits-key-deposits-last-month-rent