Your landlord is holding your money — but Ontario law is firmly on your side. The Residential Tenancies Act gives you clear rights. Here's exactly how to use them.
Unlike the UK, US, or most other countries, Ontario does not allow damage deposits. If your landlord charged you a "damage deposit," "cleaning deposit," or "pet deposit," that money is yours and they had no legal right to take it. A demand letter is often all it takes to get it back.
The Residential Tenancies Act, 2006 (RTA) is the law governing landlord-tenant relationships in Ontario. It's clear, specific, and heavily in your favour when it comes to deposits.
A landlord may require a tenant to pay a rent deposit before or upon entering a tenancy. The amount cannot exceed one month's rent. The deposit must be applied to the tenant's last month of rent — it cannot be used for damages, cleaning, or any other purpose.
Your landlord is legally required to pay you annual interest on your last month's rent deposit. The interest rate matches the Ontario rent increase guideline each year (2.5% for 2024). If they haven't paid you interest in over a year, you can deduct it from your next rent payment — or claim it through the LTB.
Many Ontario landlords — especially smaller landlords — don't know the rules. Some deliberately ignore them. Here's what they can and cannot legally ask for:
Most landlords back down the moment they receive a formal demand letter — especially one that cites the specific section of the RTA. Here's the process, step by step.
Enter your details — landlord's name, address, deposit amount, and the reason it's being withheld. The letter cites Section 106 of the RTA and demands return within 10 days.
Email it and send a printed copy by registered mail. Having both creates a paper trail. Keep your email receipts and Canada Post tracking number.
Most landlords respond within the deadline. The formal letter signals you know your rights and are prepared to escalate — which most landlords want to avoid.
File Form T1: Tenant Application for a Rebate of Money the Landlord Owes with the Landlord and Tenant Board. No lawyer required. You can file online at the LTB portal. The filing fee is $53. You have up to one year from the date of the issue.
No — not in Ontario. Cleaning deposits and deductions are not permitted under the RTA. If your landlord says the apartment was dirty, they must take that claim to the Landlord and Tenant Board and prove it. They cannot simply deduct it from your deposit. Your last month's rent deposit must be applied to rent only.
Demand it back immediately. Damage deposits are illegal in Ontario regardless of what your lease says. A clause in a lease cannot override the RTA — the Act takes precedence. Send a demand letter citing Section 106 of the Residential Tenancies Act and give your landlord 10 days to return the money.
You're owed interest at the Ontario rent increase guideline rate for each year since you paid the deposit. The rate has typically been between 0% and 2.5% per year. You can deduct unpaid interest from your next rent payment (with written notice to your landlord), or claim it through the LTB using Form T1.
Your last month's rent deposit should be applied to your final month. Any remaining amount — including accrued interest — must be returned to you. If your landlord refuses, send a demand letter. If they still refuse, file Form T1 with the LTB within one year of the issue.
Most do. A formal letter citing the specific law — not just a text message — signals to landlords that you're serious and informed. Many landlords, especially small-scale ones, back down immediately when they see a proper legal demand. Those who don't are typically bluffing — and the LTB process is straightforward enough that you rarely need a lawyer.
Generate a professional demand letter that cites the Residential Tenancies Act. Takes 5 minutes. Instant download. Built specifically for Ontario tenants.
Generate My Letter — $6.99