Free guide — Ontario
How to set up a rental property in Ontario
A step-by-step guide for first-time landlords in Ontario — mandatory lease form requirements, deposit rules, inspection obligations, licensing, and rent-increase rules. Free downloadable checklist included.
Important — read this first
Ontario does NOT allow a security or damage deposit -- only Last Month's Rent (max 1 month). You must pay annual interest on the LMR at the rent increase guideline rate.
Ontario at a glance
Mandatory lease form
Standard Form of Lease (Form 2229E)
Move-in inspection
Not required
Deposit
Last Month's Rent only
Rent control
Yes
Tribunal
Landlord and Tenant Board (LTB)
Legislation
Residential Tenancies Act, 2006
Step 1 — Written lease
Standard Form of Lease (Form 2229E)
Required for most private residential tenancies since April 30, 2018. If you do not provide it within 21 days of a tenant request, the tenant may withhold one month's rent.
Exemptions: care homes, mobile-home parks, most social housing, and co-operatives.
Download the form →Step 2 — Landlord insurance
Get a rental-dwelling policy before the tenancy starts
A standard homeowner policy typically excludes rental income and damage caused by tenants. You need a rental-dwelling (landlord) policy — not a homeowner policy.
Consider requiring your tenant to carry liability insurance as a condition of the lease. This is not required by law in Ontario but is common practice.
Step 3 — Municipal licensing
No provincial licence required in Ontario
There is no provincial landlord registration or licence anywhere in Canada. However, some cities and municipalities require a rental or business licence before you can rent a property. Check with your city or municipality before putting a tenant in.
Step 4 — Move-in condition report
No provincially required move-in inspection form in Ontario. A written record of the unit's condition is still recommended as evidence for any future deposit dispute.
Step 5 — Security deposit
Last Month's Rent only — no security or damage deposit
Only Last Month's Rent (LMR) is allowed. No security deposit, no damage deposit.
Interest: Interest must be paid annually at the rent increase guideline rate -- verify the current guideline at ontario.ca.
Verify current rate →Step 6 — Rent increases & notice rules
Notice required for a rent increase
90 days' written notice before effective date using Form N1
Rent control
Rent increase guideline applies to units first occupied before November 15, 2018. Units built after that date are exempt.
Step 7 — Records & receipts
Must give rent receipts free on request (Residential Tenancies Act s.109).
Keep copies of: the signed lease, deposit receipt, condition report(s), rent payment records, notice letters, and all correspondence with your tenant.
Tribunal: Landlord and Tenant Board — https://tribunalsontario.ca/ltb/
Your Ontario landlord setup checklist
Ontario — New Landlord Setup Checklist
8 steps to set up your first rental property correctly
Read this first
- Ontario does NOT allow a security or damage deposit -- only Last Month's Rent (max 1 month). You must pay annual interest on the LMR at the rent increase guideline rate.
Step 1: Written lease
- Use the mandatory Standard Form of Lease (Form 2229E).
- Download: https://www.ontario.ca/page/guide-ontarios-standard-lease
- Both parties sign and keep a copy.
Step 2: Landlord insurance
- Get a rental-dwelling policy -- NOT a homeowner policy -- before the tenancy starts.
- Homeowner policies typically exclude rental income and tenant-caused damage.
- Consider requiring tenant liability insurance as a lease term.
Step 3: Municipal licensing
- No provincial landlord licence required in Ontario.
- Check with your city or municipality -- some require a rental or business licence.
Step 4: Tenant screening
- Run a credit check and reference check with written consent from the tenant.
- Handle personal information per privacy law (PIPEDA or provincial equivalent).
- Human rights law applies -- you may not discriminate on protected grounds.
Step 5: Move-in condition report
- No provincially required move-in inspection form in Ontario. A written record of the unit's condition is still recommended as evidence for any future deposit dispute.
- Both parties sign and date. Each keeps a copy. Attach dated photos.
Step 6: Security deposit
- Only Last Month's Rent (LMR) is allowed. No security deposit, no damage deposit.
- Interest: Interest must be paid annually at the rent increase guideline rate -- verify the current guideline at ontario.ca.
Step 7: Rent increases & notice rules
- Notice required: 90 days' written notice before effective date using Form N1
- Rent increase guideline applies to units first occupied before November 15, 2018. Units built after that date are exempt.
- Landlord and Tenant Board: https://tribunalsontario.ca/ltb/
Step 8: Records & receipts
- Must give rent receipts free on request (Residential Tenancies Act s.109).
- Keep: signed lease, deposit receipt, condition report(s), rent payment records, all correspondence.
- Dispute body: Landlord and Tenant Board -- https://tribunalsontario.ca/ltb/
General information only — not legal advice. Verify all requirements with your province's Landlord and Tenant Board.
Frequently asked questions
Do I need to use a specific lease form in Ontario?
Yes. Ontario requires the Standard Form of Lease (Form 2229E). Required for most private residential tenancies since April 30, 2018. If you do not provide it within 21 days of a tenant request, the tenant may withhold one month's rent.
What deposit can I collect in Ontario?
In Ontario, only a Last Month's Rent deposit is allowed -- no security or damage deposit. Only Last Month's Rent (LMR) is allowed. No security deposit, no damage deposit.
Is a move-in inspection report required in Ontario?
No provincially required move-in inspection form in Ontario. A written record of the unit's condition is still recommended as evidence for any future deposit dispute.
Do I need a landlord licence in Ontario?
There is no provincial landlord licence required in Ontario. However, some municipalities require a rental or business licence — check with your city or municipality.
What are the rent-increase rules in Ontario?
Notice required: 90 days' written notice before effective date using Form N1. Rent increase guideline applies to units first occupied before November 15, 2018. Units built after that date are exempt.
Related guides
Guidepost is not a law firm. This guide is for general information only. Full disclaimer