Signing your first lease in the Greater Toronto Area can feel like the landlord holds all the cards — and the money question comes up fast. How much do you actually have to pay before you get the keys? The good news is that Ontario law is unusually clear and unusually protective. Most of the extra fees renters get asked for are simply not legal here.
Here is exactly what a landlord can collect, what they can't, and what to do if someone asks you for a “damage deposit” that doesn't exist in this province.
The only deposit a landlord can ask for
In Ontario, a landlord may collect a single rent deposit — what most people call “last month's rent.” It can be collected at or before the start of the tenancy, and it is capped at one rent period. For the standard monthly lease, that means a maximum of one month's rent.[2]
Crucially, this deposit can only be applied to the rent for your very last rent period before you move out. A landlord cannot dip into it to cover cleaning, repairs, or unpaid bills.[3]
Deposits that are illegal in Ontario
This is where the GTA differs from what many newcomers and students expect from other provinces or countries. Under the Residential Tenancies Act, a landlord cannot require any of these:[2]
- Security deposits — the catch-all “just in case” deposit is not permitted.
- Damage deposits — a landlord cannot make you pre-pay for damage that hasn't happened.
- Pet deposits — there is no legal “pet deposit” in Ontario, and no-pet clauses in a lease are void.
- Automatic payment as a condition — a landlord can't force you to provide post-dated cheques or automatic withdrawals as a requirement of the tenancy.[1]
If a listing asks for “first, last, and a damage deposit,” that third item isn't enforceable — no matter what the lease says.
Key deposits: allowed, but refundable
A landlord can ask for a deposit on keys, fobs, or remote openers, but only to cover the actual cost of replacing them — and it must be refunded when you return them. It is not a fee or a source of profit; if the real replacement cost is lower than what you paid, the difference comes back to you.[3]
The interest you're owed on your deposit
Your last month's rent deposit doesn't just sit there. Every year, your landlord owes you interest on it, and the rate is tied to the annual rent increase guideline.[3]
If your landlord never pays the interest, you're allowed to deduct it from a future rent payment.[3]
Can a landlord ask for several months up front?
No. Requiring six months or a year of rent in advance to “secure” a competitive unit is not a legal condition of tenancy in Ontario. A tenant can offer to pre-pay voluntarily, but a landlord cannot make it a requirement, and cannot reject you solely for declining. Watch for this — it's a common pressure tactic in a tight market, and sometimes a sign of a scam.
What to do if you're asked for an illegal deposit
- Know that you can say no. An illegal deposit isn't enforceable, and refusing it is your right.
- Get everything in writing. Keep the listing, texts, and any receipts. A proper receipt for money paid is something the landlord must provide on request.
- Contact the Landlord and Tenant Board (LTB). The LTB resolves disputes under the Act and can order illegal charges returned.[3]
Renting in the GTA is competitive enough without paying fees the law never allowed. Knowing the one deposit that's legal — and the handful that aren't — puts you back on equal footing before you ever sign.