Ontario Deposit Rules (2026)
Ontario does NOT allow damage/security deposits. The only permitted deposit is a rent deposit of at most one month's (or one rent-period's) rent, applied to the LAST month — and it must earn interest at the guideline rate.
Governing law: Residential Tenancies Act, 2006, s. 105–106
Stop tracking deposit rules by hand
Proprietio handles deposit rules automatically — deadlines, notices, and state-aware lease terms built into rent collection, leases, and maintenance. One flat plan, all features included.
Not ready to talk? Get a free rental audit. This guide is general information, not legal advice.
No damage deposit — at all
It is illegal to collect a "security" or "damage" deposit in Ontario. A landlord cannot require money to cover damage, cleaning, or key cards as a refundable deposit.
Last-month rent deposit only
You may collect a rent deposit of no more than one month's rent (or one rental period for weekly/daily). It can only be applied to the LAST month of the tenancy — never to damage.
Interest is mandatory
The deposit must earn interest annually at the rent-increase guideline rate. Each year the landlord either pays it to the tenant or applies it to top up the deposit to current rent.
Key deposits
A refundable key/fob deposit is allowed but only up to the actual replacement cost. It is not a damage deposit.
Damage is recovered after the fact
Because there is no damage deposit, a landlord recovers damage by applying to the LTB (or Small Claims Court) after the tenancy — not by withholding money up front.
Stop tracking Ontario compliance in spreadsheets
Proprietio keeps your leases, deposits, rent increases, and notices province-aware — so you stay onside with the Ontario tribunal without memorizing the Act.