Renting in Toronto (Part 3): Landlord refuses to return your key deposit! Know your rights!

When renting in Ontario, Canada, many tenants encounter a common issue after moving out, landlords refusing to return the key deposit. According to the Residential Tenancies Act (RTA), there are clear rules on this matter, and landlords are not allowed to withhold the key deposit without valid reason.

First, the RTA clearly states that landlords cannot collect any type of deposit other than the last month’s rent deposit. However, the law does allow landlords to collect a small key deposit, but only under strict conditions , the amount must not exceed the actual cost of the key, and it must be refunded in full once the tenant returns the key.For example, if each key costs the landlord CAD $10, then the deposit should be $10 per key, without any additional “administration” or “handling” fees.

If a landlord refuses to return the deposit citing reasons such as “key damage” or “failure to give proper notice before moving out,” the tenant has the right to request proof. Should the landlord still refuse to refund, the tenant can file a complaint with the Landlord and Tenant Board (LTB) to recover the deposit and possibly claim additional compensation. The LTB will review supporting evidence such as receipts, lease agreements, and written communications to determine responsibility.

Furthermore, if the landlord wrongly labels the key deposit as a “security deposit” or “damage deposit” and refuses to refund it, this constitutes a violation of the RTA. Tenants should keep records of all payments and correspondence as evidence in case of dispute.

In summary, Ontario law clearly protects tenants’ rights, landlords can only collect a reasonable key deposit and must refund it promptly after the keys are returned. By understanding the Residential Tenancies Act, tenants can protect themselves from unfair deductions and ensure a fair, transparent rental experience.