Leases and deposits

A lease is a legal agreement between you and your landlord that outlines your rights and responsibilities as a tenant. Understanding what you're signing—especially the differences between lease types and how deposits work—protects you financially and legally.

Fixed-Term vs. Month-to-Month Leases

Canadian residential leases fall into two main categories. A fixed-term lease, usually lasting one year, has a specific start and end date. Once the lease ends, the agreement does not automatically renew; you and your landlord must either sign a new lease or transition to a month-to-month arrangement.

A month-to-month tenancy has no set end date and continues indefinitely until either you or your landlord provides notice to terminate. This periodic arrangement offers flexibility but less stability than a fixed-term agreement. In most Canadian provinces, a fixed-term lease automatically becomes month-to-month after the term expires, unless both parties agree otherwise.

When Your Fixed-Term Lease Ends

An important protection for tenants: in most provinces, including Ontario, the expiry of a fixed-term lease is not a valid reason for your landlord to evict you. If your landlord sends a letter saying you must leave because the lease has ended, this is not a valid eviction notice. Your tenancy automatically continues on a month-to-month basis under the same terms until proper notice is given by either party.

Flexibility and Termination Notice

A month-to-month tenancy is easier to end, but notice requirements vary by province. In Ontario, you must provide 60 days' notice in writing, and the notice must expire on the last day of a rental period. Fixed-term leases generally require you to stay for the full term unless you and your landlord agree to end it early.

Deposits: Legal Limits and Provincial Differences

Canada has no federal rules on security deposits. Instead, each province sets its own limits, and these vary significantly. A deposit that is legal in one province may be completely illegal in another, so understanding your province's rules before handing over any money is critical.

Ontario

Ontario is tenant-friendly when it comes to deposits. Your landlord can only ever hold one month's rent as a deposit—and this must be for your last month's rent only. Demanding a separate damage or security deposit is illegal. If a landlord charges one, you can file with the Landlord and Tenant Board. Your last month's rent deposit cannot be used for damages; it can only be applied to your final month's rent. In Ontario, you typically pay both your first month's rent and last month's rent deposit when you sign the lease. The last month's rent must earn annual interest at the Rent Increase Guideline rate.

British Columbia

British Columbia allows landlords to collect a security deposit capped at half of one month's rent. If you have a pet, the landlord may also request a separate pet damage deposit, also capped at half a month's rent—so the total maximum is one month's rent combined. Importantly, BC landlords cannot also charge a separate last month's rent deposit. Once your tenancy ends and you provide a forwarding address in writing, your landlord has 15 days to return the deposit plus any accrued interest, or provide an itemized statement of any deductions.

Other Provinces

Alberta allows a security deposit equal to one month's rent and must return it within 10 days if there are no deductions. Landlords must provide an itemized statement if they keep any part. Saskatchewan caps security deposits at one month's rent but allows tenants to pay half upon moving in and the remainder within two months. Quebec is the most tenant-friendly: a landlord cannot legally accept any deposit at all—not a security deposit, damage deposit, last month's rent, or post-dated cheques. If someone asks you for a deposit in Quebec, this violates the Civil Code of Quebec.

What Landlords Can Ask for at the Start of Your Tenancy

Before you sign a lease, you should understand what deposits and fees your landlord can legally request. Beyond rent and deposits, your landlord may ask for references from a past landlord or employer to verify you are a reliable tenant. If you don't have a Canadian credit history or employment references, you may be asked to provide a guarantor—typically a parent or guardian with a good credit record who agrees to pay rent if you cannot.

Landlords can request identification to verify your identity, but they cannot photocopy your ID. They may also ask for permission to conduct a credit check. It is illegal for a landlord to pressure you into anything in exchange for housing, and any such behaviour should be reported to your provincial tenant rights tribunal or a newcomer services provider.

Reading and Signing Your Lease

A lease is a binding legal contract, and signing a blank or incomplete lease puts you at risk. Read every page carefully before you sign. Your lease should include your full legal name and your landlord's contact information, a clear description of the rental unit (address, unit number, parking space, storage locker if included), the monthly rent amount and when it is due, the lease term (start and end dates for fixed-term, or start date for month-to-month), the amount of any deposit and how it will be used, and any additional terms like pet policies, parking fees, or utilities included in rent.

Some provinces require use of a standard lease form. In Ontario, most residential tenancies signed on or after March 1, 2021, must use the Standard Form of Lease. If your landlord has not provided it and your tenancy began after that date, you can write to your landlord and request one; they must provide it within 21 days. In Quebec, all leases must use the government's mandatory form (Régie du Logement Standard Lease), and the lease must be written in French unless both parties agree otherwise.

After you sign, your landlord must give you a signed copy. In Ontario, the landlord must deliver a copy within 21 days of signing; if they don't, you can withhold rent until you receive it. Never sign an agreement that contains blank terms or additional pages you haven't reviewed. Any changes to the lease must be done in writing before you sign.

Void and Unenforceable Terms

Not all lease terms are legal. For example, in Ontario, any clause that bars you from having visitors or a roommate is void and unenforceable. If your landlord charges a deposit amount higher than your province's legal maximum, that clause is void. Any term that requires you to waive your right to dispute resolution with a tenancy tribunal is illegal and cannot be enforced.

Deposits and What They Cover

A deposit is money held by your landlord to protect against unpaid rent or damage beyond normal wear and tear. Normal wear includes small problems like faded paint, worn carpet, or minor scuffs. Landlords can only deduct from your deposit for actual damages, unpaid rent, or other amounts you owe under the lease—never for routine cleaning or regular maintenance.

Document the condition of your rental unit on the day you move in. Take dated photos or videos of every room, closets, appliances, walls, and floors. Request a written move-in inspection report from your landlord and keep a copy. When you move out, take the same photos and compare them. This evidence is crucial if a dispute arises about your deposit. Keep all rental payment receipts and written communications with your landlord.

Deposit Return Timelines

Once your tenancy ends, your landlord must return your deposit within a set timeframe, though this varies by province. In British Columbia, landlords have 15 days from when you provide a forwarding address in writing. In Alberta, the timeline is 10 days. Your landlord must return the deposit plus any accrued interest and provide an itemized statement if any money is deducted. If your landlord fails to return your deposit on time without a valid reason, you may be able to claim double the amount owed through your provincial residential tenancy tribunal.

Key Takeaways for Newcomers

• Deposit rules differ by province—always check your provincial rules before signing a lease.
• In Ontario, only a last month's rent deposit (one month) is legal; damage deposits are forbidden.
• In BC, security deposits are capped at half a month's rent, plus optionally half a month for pets.
• In Quebec, any deposit is illegal.
• Read your entire lease before signing and get a signed copy.
• Document your rental unit's condition with photos on move-in and move-out.
• Your landlord cannot deduct from deposits for normal wear and tear.
• Keep all receipts and written records of payments and communication.
• If you believe your deposit was held illegally, contact your provincial tenant tribunal or a newcomer services provider.