A rent deposit is the only deposit an Ontario landlord may lawfully collect at the start of a tenancy — capped at one month’s rent or one rental period, whichever is less — and it must be applied to the tenant’s last rent period, never held as security against damage.
The rule is a hard cap, not a negotiating range: “a landlord may collect a rent deposit of no more than one month’s rent (or one rental period’s rent, whichever is less) before the tenancy begins”, and that deposit “is applied to the last period of the tenancy” — it is prepaid rent, not a damage fund.
Everything else landlords commonly ask for at move-in falls outside the Act: “no other deposit — for keys, pets, damage, or anything else — is permitted”, and a lease clause requiring one “is void and any money collected under such a clause must be returned.” A landlord who wants compensation for damage beyond normal wear and tear has to pursue it separately — through Small Claims Court or a Board application — the rent deposit itself is never available for that purpose.
Monthly rent is $1,800. At move-in, the landlord lawfully collects an $1,800 rent deposit — exactly one month’s rent, the maximum allowed. The same landlord also asks for a $500 pet deposit and a $200 key deposit; both are void, so that $700 must be returned to the tenant even though it was paid without objection at signing. At move-out, the $1,800 rent deposit is applied dollar-for-dollar to the tenant’s final month’s rent — the landlord cannot redirect it to a repair bill instead, no matter how large the damage.
See also: The N4 arrears notice · Above-guideline increases · Vital services you cannot shut off.
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