• Last Updated:
  • May 15th, 2019 9:39 am
Nov 18, 2017
6 posts

Rent deposit

I'm new to renting my house so forgive me.
I have my house listed for June 1 occupancy, but I have a family that wishes to rent it but not until July 1, I read the Residential Tenancy Act regarding rent deposits so I just want to clarify and make sure I'm not out of line.
If we sign the lease agreement for a July 1 occupancy, I can ask for a deposit up to the amount of one month's rent as a hold to help guarantee they follow through with the signed agreement? This deposit can then put towards their first months rent, or held as the 'last month' rent deposit? If in the event they backout, do I keep the deposit per breaking the agreement?

4 replies
Deal Guru
Feb 29, 2008
13871 posts
Are you in Ontario? First and last months rent is due. No ifs ands or buts.
Deal Guru
User avatar
Mar 23, 2008
11890 posts
As noted above, location is important.

I would check with your local LTB.

If you're in Ontario, this case might be of importance to you:
https://www.acto.ca/production/wp-conte ... t_2011.pdf

It went back and forth a number of times (you can search for the tenant's name in www.canlii.org and Google). AFAIK, the final decision by the Appeal Court of Ontario was that the landlord cannot hold the deposit if the tenant decides not to follow through with the rental agreement. But it may be contract wording specific, so you may want to review that with your lawyer.

My understanding of the situation is that you MUST use the standard rental agreement in Ontario, which means you cannot collect anything other than a deposit for the last month's rent. Any illegal (or disallowed) clauses are void. So changing the wording on the agreement to protect yourself won't work.

But you should probably talk to a real lawyer and the LTB in your area...

Jun 6, 2018
95 posts
In response to your question, 1 months rent can asked to show intent to rent.
As stated , that must be returned upon proper cancellation before their move in date.
On their move in date is when they must provide the 1st months rent.
Reason being , proper notification by either party requires 60 day notice unless mutually agreed in writing.
Given that this is your first rental unit and not just a room rental (different rules), I HIGHLY recommend an in person consult with a lawyer whom specializes in tenancy issues.
Tip ... Talk to a high rise rental building manager to get a referral to the firm that they use.
Best choice that we ever did!