Landlord and Tenant Issues

Which deposits and fees can an Ontario landlord legally charge?

Last updated October 7, 2026.

An Ontario landlord can collect only two kinds of deposit: a rent deposit of no more than one month's rent, which must be used for the last month, and a refundable key or fob deposit no higher than the expected cost to replace it. Beyond rent, only a short list of charges is allowed, such as a bounced-cheque charge of up to $20 plus the bank's own fee. Damage deposits, pet deposits and fees just to apply are not allowed.

These limits come from sections 105, 106 and 134 of the Residential Tenancies Act, 2006 and section 17 of its general regulation, and they apply to most private rentals in Hamilton and across Ontario. If you have already paid something that looks wrong, or you are a landlord setting up a new tenancy, our page on help with landlord and tenant issues explains how Carson Frankum, a licensed paralegal, works on Landlord and Tenant Board (LTB) matters.

How do deposits and extra charges work, step by step?

Most money questions come up at three moments: when the lease is signed, while the tenancy runs, and when it ends. Here is what the law says at each stage.

Before or at signing, the landlord may ask for a rent deposit. The landlord can require it only on or before the day the tenancy agreement is made (s. 106(1)). It cannot be more than one rental period's rent or one month's rent, whichever is less (s. 106(2)). For a monthly tenancy, that means one month. This is the "last month's rent" most people know, and our page on the last month's rent deposit covers it in detail.
The landlord may also ask for a key or fob deposit. It must be refundable and no higher than the expected direct cost of replacing the keys, remote entry devices or cards (O. Reg. 516/06, s. 17, para. 3). Both deposits are written into sections 8 and 9 of the government's standard form of lease, which most private landlords must use.
Nothing else can be required to get the unit. Section 134(1) bars any "fee, premium, commission, bonus, penalty, key deposit or other like amount" from a tenant or prospective tenant unless a regulation allows it, refundable or not. The allowed list does not include an application fee, a holding fee, a damage deposit or a pet deposit. A landlord also cannot make you buy goods or services as a condition of renting (s. 134(1)(b)).
Payment method is the tenant's choice. Neither the landlord nor the lease can require post-dated cheques, automatic bank withdrawals or automatic credit card charges for rent (s. 108). You can offer them, but you cannot be forced. The landlord must give a free receipt for any payment on request, and a former tenant can ask for one within 12 months after moving out (s. 109).
During the tenancy, the landlord owes interest on the rent deposit. Interest is paid every year at the rent increase guideline in force when the payment comes due (s. 106(6)). The guideline is 2.1% for 2026 and 1.9% for 2027. If the rent has gone up, the landlord can keep part of that interest to top up the deposit to the new one-month amount (s. 106(7)). If the landlord does not pay the interest, the tenant can deduct it from a later rent payment (s. 106(9)).
At the end, the deposit pays the last month. The landlord must apply the rent deposit to the last rental period (s. 106(10)). It is not a damage fund. If the landlord never hands over the unit, the deposit must be repaid (s. 107).
If money was taken illegally, the tenant can apply to the LTB. A tenant, former tenant or prospective tenant files a T1 application for a rebate, and the Board can order the landlord, superintendent or agent to pay back the money (s. 135). The application must be filed within one year after the money was collected or kept (s. 135(4)).

Common charges and whether an Ontario landlord can collect them
Charge	Allowed?	Limit	Rule
Rent deposit (last month's rent)	Yes, if asked for at or before signing	One month's rent or one rental period, whichever is less; interest owed yearly	RTA s. 105, 106
Key, fob or card deposit	Yes, refundable	Expected direct replacement cost	O. Reg. 516/06, s. 17, para. 3
Extra keys or fobs the tenant asks for	Yes	Direct cost	O. Reg. 516/06, s. 17, para. 1
Replacement keys or fobs	Yes, unless the landlord changed the locks on its own initiative	Direct replacement cost	O. Reg. 516/06, s. 17, para. 2
Bounced (NSF) cheque	Yes	The bank's NSF charge plus an administration charge of up to $20	O. Reg. 516/06, s. 17, paras. 4 and 5
Damage or security deposit	No	Not permitted	RTA s. 105(1)
Pet deposit or pet fee	No	Not permitted	RTA s. 14, 134
Application, holding or "key money" fee	No	Not permitted, refundable or not	RTA s. 134(1)(a)
Interest or penalty on late rent	No	Not permitted	RTA s. 134(1)(a); standard lease guide
Parking, storage locker or other services	Yes, as part of the rent	Counts as lawful rent and follows the rent increase rules	RTA s. 2(1) "rent"
Window or portable air conditioner when rent includes electricity	Yes, a seasonal rent increase, since July 1, 2026	Actual electricity cost, or a reasonable estimate	RTA s. 36.1
Discount for paying on time	Optional	Up to 2% of the rent	RTA s. 111(2)

What changes the answer?

The basic rule is short, but several details decide whether a particular charge is lawful.

Whether the charge is really rent. The Act defines rent to include money paid for services, facilities or privileges the landlord provides, even if billed separately (s. 2(1)). A parking spot or storage locker charge agreed at the start is part of the rent, not an illegal fee. It then rises only with lawful rent increases, and our guide to above-guideline rent increases explains the limits a landlord cannot pass through on its own.
Who collected the money. The ban covers superintendents, property managers and anyone acting for the landlord, with or without the landlord's approval (s. 134(2)). The Board can order any of them to pay the money back (s. 135(1)).
Whether the tenant is subletting. A tenant who sublets cannot charge the subtenant more than the lawful rent or collect a fee, premium or key deposit for subletting or giving up the unit (s. 134(3)). A subtenant can apply against the tenant as if the tenant were the landlord (s. 135(3)).
The type of housing. Most private rentals follow these rules. Mobile home parks and land lease communities can collect a site payment at the start, and certain social housing can charge up to $250 for a transfer the tenant asks for (O. Reg. 516/06, s. 17, paras. 7 and 8).
Settlements. A payment a tenant makes to settle a court action or a Board application is allowed, so a negotiated settlement is not an illegal charge (O. Reg. 516/06, s. 17, para. 6).
How much time has passed. The one-year limit in section 135(4) runs from when the money was collected or kept. Separately, rent that has been charged for a year without a challenge is deemed lawful (s. 136), so a disguised fee folded into rent should be raised quickly.
Air conditioners. Since July 1, 2026, a tenant may install a window or portable unit if the conditions in section 36.1 are met, and the landlord may charge a seasonal increase only when the rent includes electricity. The increase stops when the unit is removed or not in use for the season (s. 36.1(8) and (9)).

What might this look like? A worked example

For example, imagine a Hamilton tenant named Dana who signs a one-year lease on an apartment at $1,800 a month. The landlord asks for the first month's rent, a last month's rent deposit of $1,800, a $500 "damage deposit", a $300 "pet fee" for her cat, and a $150 fob deposit. Dana pays everything because she wants the unit.

Under the Act, the first month's rent and the $1,800 rent deposit are fine. The fob deposit is fine only if $150 is no more than the expected cost of replacing the fob; if the building's fobs cost $40 to replace, the extra $110 is an illegal charge. The $500 damage deposit breaks section 105, and the pet fee breaks section 134. A no-pet rule would be void anyway, which our page on pets and no-pet clauses explains.

Dana writes to the landlord asking for the $800 (plus any excess on the fob deposit) back and keeps copies of her e-transfers. If the landlord refuses, she can file a T1 application within one year of paying. The filing fee is $53, or $48 through the Tribunals Ontario Portal. If the Board agrees, it can order the money repaid. A year later, her rent deposit should also earn interest at the guideline rate, which she can deduct from her rent if the landlord does not pay it.

Now picture the same landlord the next spring. Dana asks to install a window air conditioner, and electricity is included in her rent. The landlord can add a seasonal charge for the electricity the unit uses, based on actual cost or a reasonable estimate from the information Dana gives, but cannot add a flat "appliance fee" on top.

What mistakes do landlords and tenants make with deposits and fees?

Treating the last month's rent as a damage deposit. The rent deposit must go to the last rental period (s. 106(10)), and the government's guide to the standard lease says it cannot be used as a damage deposit. A landlord who wants to recover damage has to apply to the Board or claim the money in another proper way, which is where our page on money owed after a tenant moves out picks up.
Waiting too long to ask for the money back. A T1 for an illegal charge must be filed within one year. Tenants often wait until the end of a long tenancy, by which time the start-of-lease charges are out of time.
Forgetting the yearly interest. Landlords often hold a deposit for years without paying interest. It is owed every year at the guideline rate, and failing to pay it is an offence under section 234(e).
Charging for new keys after changing the locks. If the landlord changes the locks on its own initiative, it cannot charge for replacement keys (O. Reg. 516/06, s. 17, para. 2), and changing locks without giving the tenant new keys is a separate breach under section 24.
Insisting on post-dated cheques or automatic payments. A lease clause that requires them is void (s. 4 and s. 108). A landlord can ask; it cannot refuse to rent because a tenant prefers another method.
Thinking a lease clause makes the charge legal. Any term inconsistent with the Act is void (s. 4), even if the tenant signed it. Signing a lease with a damage deposit clause does not make the deposit lawful.

What should you do this week?

Gather your lease, receipts, e-transfer records and any written messages about money paid at the start of the tenancy.
List every amount you paid besides monthly rent, with the date, the amount and who received it.
Compare each amount with the table above. Mark anything that is not rent, a rent deposit, a lawful key deposit or a permitted NSF charge.
Check the date of each questionable payment and count one year forward. Anything near that date needs attention first.
Write to the landlord asking for the specific amounts back and keep a copy. A calm written request is useful evidence later.
If the landlord says no or does not answer, prepare a T1 application and file it within the one-year limit, ideally through the Tribunals Ontario Portal.
Landlords: review your rental package and remove any damage, pet, application or cleaning deposit before your next tenancy starts.

If the dispute is part of a wider problem with the landlord, such as threats after you asked for your money back, our page on harassment and interference (T2) explains the separate tenant rights application. Good records matter in every LTB case, and our article on documentation in landlord-tenant disputes covers what to keep. If your rental is in Hamilton, our page on the Landlord and Tenant Board for Hamilton rentals covers the local side of the process.

Frequently asked questions

Can a landlord ask for first and last month's rent?

Yes. The first month is simply rent paid in advance, and the last month's rent is the one rent deposit the Act allows. It must be no more than one month's rent and it must be requested on or before signing the tenancy agreement.

Can a landlord charge a pet deposit in Ontario?

No. A pet deposit or pet fee is not on the list of permitted charges, and a lease term banning animals is void under section 14. The government's guide to the standard lease names pet and damage deposits as examples of terms that cannot be enforced.

Is a key or fob deposit refundable?

It must be. The regulation allows only a refundable deposit no higher than the expected direct cost of replacing the key, fob or card. When you return the keys at the end of the tenancy, the deposit should come back to you.

How much can a landlord charge for a bounced cheque?

The landlord can pass on the NSF charge its own bank applied, plus an administration charge of no more than $20. Anything beyond that is an illegal charge you can ask the Board to order repaid.

Can a landlord charge for parking or a storage locker?

Yes, if it is agreed as part of the tenancy. The Act treats that charge as part of the rent, so it appears in the rent section of the standard lease and can only go up under the normal rent increase rules.

Can I get an illegal charge back after I move out?

Yes. A former tenant can file a T1 application, but the one-year limit still runs from the date the money was collected or kept. The most the Board can order on a money claim is $50,000, the current Small Claims Court limit.

Can the landlord keep my rent deposit for cleaning or repairs?

No. The rent deposit must be applied to the last month's rent. If the landlord believes you caused damage beyond normal wear, it has to pursue that claim separately rather than keep the deposit.

Sources

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This page gives general information about Ontario law, not legal advice for your situation. Cheddar Paralegal PC is a paralegal firm licensed by the Law Society of Ontario; licensed paralegals can help only with matters the Law Society allows paralegals to handle.