Frequently Asked Questions
These are frequently asked questions from renters that only apply to leases in Ontario.
There are some exceptions so instead of writing “in most cases” on every line, the answer will be stated for the typical case. If you have additional questions, you should contact your real estate representative or your paralegal.
The rental deposit is an amount to money that you give after an accepted “Agreement to Lease.” It is typically equal to the “First and Last” month’s rent and is used to secure your place and make you think twice if you decide to not go through with it.
The deposit kind of like a “good will” gesture that you’re going to go through with the “Agreement to Lease” that you had signed. The idea is that if you decide not to take the lease, the Landlord can take your deposit money.
No! In Ontario, the deposit isn’t an essential part of the contract. What this means is that if you don’t pay the deposit, you have breached (broken) the contract and the Landlord has the right to sue you for both the deposit and any losses they may have incurred.
The deposit is the “First and Last” month’s rent. The first month will be applied to the first month you are living there. The last month will be applied when you give notice that you are leaving. So in theory, the last month could apply to Month #12, Month #24 or Month #100.
Likely no. This is completely up to the Landlord, but most would likely question your financial stability if you can’t even pay at least two months.
For competitive properties, renters regularly volunteer up to 12-months of rent pre-paid!
You may want to pre-pay more months in order to be more competitive against other renters. Also, depending on your financial situation, you may want to pre-pay more months so that the Landlord has a higher chance of accepting you.
No, this is illegal. A Landlord can not make it a requirement that you are pre-paying additional months above the first two months. However, you can volunteer to give it.
The deposit is paid to the Listing Brokerage, who will hold the money in a trust account.
Yes, it is safe. The real estate brokerages hold the money in a trust account and some have millions flowing through accounts.
This would depend on the “Agreement to Lease” or the offer that you wrote. The first option is “Herewith” which means the deposit is with the offer. This is very rare nowadays.
The most common time period is “Upon Acceptance” which means, “24 hours after the offer was accepted.” Care must be taken to ensure that the Listing Brokerage gets the deposit within that time period.
Delays often happen when the renter can’t get a certified cheque or wire transfer because the 24 hours lands on a day when the bank is closed.
You should ensure that you have the funds ready, and that the offer stipulates that the deposit is delivered on a business day. You could also make sure that a receipt of the fund transfer is sufficient instead of the actual funds. This occurs when there’s a wire transfer or a bill payment that is delayed one or two days.
Yes, you can split into multiple payments. As long as they are all within the deposit timeframe.
This would depend on the Listing Brokerage. Some absolutely do not take any form of cash. Some do.
Deposit methods depend on the Listing Brokerage. Often they can include certified cheque, bank draft, wire transfer, Interac, bill-deposit, direct-deposit or electronic fund transfer. And cash for some.
Yes, you can. You can voluntarily give a pre-payment of more months.