Key deposits in Ontario sit in an unusual legal spot: the law bans them by name, and then carves out one narrow exception that lets a landlord charge one anyway. Ontario’s Residential Tenancies Act lists a “key deposit” directly among the charges a landlord can’t collect, alongside fees, bonuses, and penalties of any kind. What actually makes a key or fob deposit legal is a separate regulation that exempts a deposit meeting two specific conditions: it has to be fully refundable, and it can’t exceed what the key or device actually costs to replace. Get either condition wrong and the deposit falls back into the general ban. This guide covers what a landlord can legally charge, what happens to the money, and how this differs from the deposits Ontario bans outright. For everything else that comes with renting in Toronto, see our complete Toronto real estate guide.
Is a key deposit legal in Ontario?
Yes, but only through a specific, narrow exception, not a general right landlords have. Section 134 of Ontario’s Residential Tenancies Act bans a landlord from collecting a “fee, premium, commission, bonus, penalty, key deposit or other like amount of money,” whether or not it’s refundable, unless a regulation specifically allows it. That’s the starting position: a key deposit is named directly in the list of things a landlord can’t charge. Ontario Regulation 516/06 is where the actual permission lives, and it exempts one specific thing from that ban: a refundable deposit for a key, remote entry device, or access card, capped at the item’s actual replacement cost.
So the honest way to put it is this: a key deposit isn’t legal because landlords are generally allowed to charge extra fees. It’s legal because this one, narrowly defined deposit has its own carve-out from a ban that otherwise covers it. Miss either condition in that carve-out, refundability or the replacement-cost cap, and the deposit stops being the legal exception and becomes exactly the kind of charge section 134 prohibits.
How much can a landlord actually charge?
Only the actual cost of replacing the specific key, fob, or access card, whatever that is for the building in question. There’s no fixed dollar figure set out anywhere in the law, no standard $50 or $100 a landlord is automatically entitled to charge regardless of what the item actually costs. A landlord who sets a flat fee without being able to point to what the key, fob, or card actually costs to replace is on weak legal ground the moment that figure is challenged. If a building uses a simple metal key, the legitimate deposit is small. If it uses a programmable fob or card tied to a building-wide access system, the legitimate deposit can reasonably be higher, but it still has to track the actual cost, not a number the landlord picked because it sounds reasonable.
This comes up constantly in Toronto specifically, since most purpose-built rentals and condo buildings now use a fob, key card, or similar electronic device for the main entrance, elevators, and often the garage, in addition to a physical key for the unit itself. Some buildings charge separately for each device, a fob for the building and a key for the suite, rather than a single combined deposit. Each one is its own deposit under the same rule: refundable, and capped at whatever that specific device actually costs the building to reissue. A landlord or property manager who bundles several devices into one number should still be able to break that number down into what each device costs if a tenant asks, since the legal cap applies item by item, not as a single round figure for “move-in.”
Is a key deposit refundable?
Yes, that’s not optional, it’s the condition that makes the deposit legal in the first place. A tenant gets the deposit back when they return the key, fob, or card to the landlord in the condition it was given. A landlord who collects a key deposit and doesn’t return it once the item is handed back is holding money they no longer have any legal basis to keep, regardless of how routine that practice might be in a given building. The deposit also can’t be used to cover unrelated costs, cleaning, damage to the unit, unpaid utilities, since its entire legal justification is tied to the specific key or device, not to anything else that might come up at move-out.
What to do if a landlord won’t return it
Ask for it back in writing at the point you return every key and access device, and get something in writing from the landlord confirming everything was handed over, the practical sequence Steps to Justice, the legal-aid-backed guide to Ontario housing law, recommends to any tenant trying to get a deposit back. That confirmation matters more than it might seem to at the time, since it’s the evidence you’d need if the landlord later claims something wasn’t returned. If a written request doesn’t get the deposit back, a tenant can contact the Rental Housing Enforcement Unit or apply to the Landlord and Tenant Board to recover it. A landlord also can’t hold onto a key deposit, or any other deposit, because of damage to the unit; a damage claim has to go through the Board as its own separate matter, not as an excuse to keep money collected for something else entirely.
What if a lease calls it something else
Calling the charge something other than a “key deposit” doesn’t change what it actually is under the law. Some leases and move-in documents use labels like an “access fee,” a “fob administration charge,” or a “move-in fee” instead, sometimes to describe the exact same thing a key deposit covers, and sometimes to try to collect money the deposit rules wouldn’t otherwise allow. The label on the page isn’t what decides whether a charge is legal. What decides it is the same two questions this guide keeps coming back to: is the money refundable, and does it track the actual cost of a specific key or device rather than functioning as a flat charge for something else?
A refundable deposit for a key or fob, capped at its actual cost, stays legal no matter what a lease calls it. A non-refundable “administration fee” for setting up the same fob is a different thing entirely, and relabeling it doesn’t move it out of the general ban on extra charges under section 134. If a lease includes a charge you don’t recognize, the useful question isn’t what it’s called, it’s whether you get it back and whether the amount matches something specific and real, like a key or an access device, rather than a flat number attached to moving in.
How this differs from other deposits
A key deposit is a distinct thing from the two other deposit types tenants in Toronto run into, and the three get confused constantly. Our guide to rent prices in Toronto and our guide to renting an apartment in Toronto both cover the last month’s rent deposit, which is capped at one month’s rent and applied to your final month of tenancy, a completely separate thing from anything to do with keys. Those same guides also cover the fact that Ontario bans a separate security, damage, or pet deposit outright, with no exception at all. A key deposit is the one, narrow case where a third kind of deposit is actually legal, specifically because it’s tied to a replaceable physical item rather than functioning as general security for the unit itself.
Frequently asked questions
Is a key deposit legal in Ontario?
Yes, but only under a specific exception, not as a general right. Ontario’s Residential Tenancies Act bans a “key deposit” by name under section 134, alongside other extra fees a landlord can’t charge. A separate regulation, Ontario Regulation 516/06, carves out one exception from that ban: a deposit for a key, remote entry device, or access card that’s fully refundable and capped at the item’s actual replacement cost. A deposit that meets both of those conditions is legal. One that doesn’t, because it’s non-refundable or set above the item’s actual cost, falls back under the general ban and isn’t something a landlord is entitled to collect.
How much can a landlord legally charge for a key deposit?
Only the actual cost of replacing the specific key, fob, or access card involved. Ontario law sets no fixed dollar figure for a “standard” key deposit, so a landlord charging a flat fee with no connection to what the item really costs to replace is on weak ground if that figure is ever challenged. A simple metal key justifies a small deposit. A programmable fob or access card tied to a building-wide system can justify a higher one, but the number still has to track the item’s actual cost, not a figure chosen because it sounds typical for the neighbourhood or the building.
Is a key deposit refundable in Ontario?
Yes, and that’s the condition that makes it legal at all. A tenant gets the deposit back when they return the key, fob, or card in the condition it was given. A landlord who keeps a key deposit after the item has been returned has no legal basis to hold onto that money, no matter how standard that practice might feel in a particular building. The deposit also can’t be redirected to cover cleaning costs, damage, or unpaid utilities, since the entire legal justification for charging it is tied specifically to the key or device, not to anything else that comes up at move-out.
What should I do if a landlord won’t return my key deposit?
Start by asking for it back in writing at the moment you return every key and access device, and get written confirmation from the landlord that everything was handed over. That confirmation is the evidence you’d need if a dispute comes up later about whether something was actually returned. If a written request doesn’t resolve it, you can contact the Rental Housing Enforcement Unit or apply to the Landlord and Tenant Board to recover the money. A landlord also can’t use a key deposit to cover damage to the unit; that has to be pursued separately through the Board rather than settled by keeping a deposit collected for a different purpose entirely.
Is a key deposit the same as a security deposit or last month’s rent?
No, all three are different things that get confused constantly. A last month’s rent deposit is capped at one month’s rent and applied to your final month of tenancy; it has nothing to do with keys. A security, damage, or pet deposit is banned outright in Ontario, with no exception at all, regardless of what a lease calls it. A key deposit is the one narrow case where a third kind of deposit is actually legal, specifically because it’s tied to the actual replaceable cost of a key or access device, not because it functions as general security for the unit the way a banned damage deposit would.
Can a landlord get around the rules by calling it something other than a “key deposit”?
No, the label on a lease doesn’t change what a charge actually is under the law. Some leases describe the same kind of charge as an “access fee,” a “fob administration charge,” or a “move-in fee” instead of a key deposit, and what decides whether any of those is legal is the same test that applies to a charge called a key deposit directly: is it refundable, and does it match the actual cost of a specific key or device rather than functioning as a flat fee for something else. A refundable deposit tied to the device’s actual cost stays legal under whatever name it’s given. A non-refundable fee dressed up with a different label is still the kind of extra charge section 134 of the Residential Tenancies Act prohibits, and renaming it on the lease doesn’t move it outside that ban.
Whether a key deposit you’ve been asked for, or one you’re trying to get back, actually follows these rules usually comes down to the specific amount and what happened to it. Get in touch with our team if you want to talk through a specific situation, and see our guide to renting an apartment in Toronto for the rest of what a lease and move-in actually involve, plus the rest of our guides.