Ontario · for landlords
Which form you need depends on whether the Residential Tenancies Act applies to your situation — that comes down to whether they share a kitchen or bathroom with you. What you write down, and the deposit you are allowed to ask for, follow from there.
For a tenancy the Residential Tenancies Act covers — a self-contained basement unit, or a room in a house where you do not live — the Ontario standard lease, Form 2229E, is required. It is published free by the province; you do not need to buy a template from anyone. Anything you want to add that the form does not cover goes in the additional terms section, and a term that contradicts the Act is unenforceable no matter who signed it.
"First, last, and a damage deposit" is asked for constantly in room ads. For a tenancy the Act covers, the damage deposit part is not permitted.
It cannot be applied to damage, cleaning or unpaid utilities. It pays the last month's rent and nothing else. Take it off something else without the tenant agreeing in writing and you still owe it.
Interest is owed on it every year, at the same rate as that year's rent increase guideline. Most landlords apply it as a credit rather than writing a cheque.
If your arrangement is exempt from the Act, these rules do not bind you — but whatever you agreed does, under ordinary contract law. So if you take a deposit, write down exactly what it is for and what brings it back. Renters use this rule the other way, as a test of whether a listing is real.
No form is required, and nothing here is a substitute for advice on your own situation. But these are the things that cause arguments when nobody wrote them down:
Both sign it, both keep a copy. A page is plenty.
Not for a tenancy the Residential Tenancies Act covers. Damage deposits, security deposits and pet deposits are not permitted. The only deposit allowed is last month's rent, capped at one month, plus a refundable key deposit no larger than the actual cost of replacing the key.
No. It can only be applied to the last month of the tenancy. Using it for damage, cleaning or unpaid utilities without the tenant's written agreement means you still owe it, and the tenant can apply to the Landlord and Tenant Board to get it back.
Yes, for tenancies covered by the Act. Interest is owed each year at the same rate as that year's rent increase guideline. It is commonly applied as a credit against the deposit rather than paid out.
If the arrangement is exempt from the Act because the person shares a kitchen or bathroom with you as the owner living in the building, then the Act's deposit rules do not bind you. What you agreed still binds you under ordinary contract law, so write it down and be specific about what any deposit is for and when it comes back.
If the Residential Tenancies Act applies, the Ontario standard lease (Form 2229E) is required. If the arrangement is exempt, no form is required, but a short written agreement is still worth having because it is the only record of what you both agreed.
This is general information, not legal advice. Checked against Ontario sources on 10 September 2026. For advice on your own situation, speak to a paralegal or to Landlord's Self-Help Centre, which is free for small Ontario landlords. The Act is on ontario.ca and the standard lease is published by the province.
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