What Happens If a Landlord Uses a Key Deposit For a Reason Other Than Key Replacement?

A Landlord May Require a Key Deposit Allocated For the Purpose of Replacing the Key. It Is Unlawful to Use the Key Deposit For Any Other Purpose. The Key Deposit Must Be In An Amount Equivalent to Cost of Replacing the Key. If Otherwise, a Tenant May Apply to the Landlord Tenant Board For Remedy.

A Helpful Guide On How to Determine Whether a Key Deposit Is Legal and What Conditions Apply

Lawsuit Document Involving Conspiracy Issues A tenant may lawfully be required to provide a key deposit to a landlord; however, such a deposit is subject to conditions.  The conditions include the requirement that the key deposit be limited to the direct costs of key replacement, "direct costs" meaning only the cost of a replacement key (or entry card or other access device) as charged by the supplier without any further sum such as compensation for inconvenience to the landlord.

The Law

The conditions regarding a key deposit are prescribed within the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17 in combination with O. Reg. 516/06, as a regulation to the Residential Tenancies Act, 2006, wherein such it is stated:

Residential Tenancies Act, 2006, section 134(1)(a):

134 (1) Unless otherwise prescribed, no landlord shall, directly or indirectly, with respect to any rental unit,

(a) collect or require or attempt to collect or require from a tenant, prospective tenant or former tenant of the rental unit a fee, premium, commission, bonus, penalty, key deposit or other like amount of money whether or not the money is refundable;

O. Reg. 516/06, section 17, paragraph 3:

17. The following payments are exempt from subsections 134 (1) and (3) of the Act:

3. Payment of a refundable key, remote entry device or card deposit, not greater than the expected direct replacement costs.

Complete Reading Required

When first reviewed, if a person only reads the Residential Tenancies Act, 2006 including section 134(1) without digging deeper to include a review of section 17, paragraph 3 within O. Reg. 516/06, it would initially appear that a key deposit is unlawful.  Accordingly, significant confusion and debates do arise from which legal disputes occur.

Illegal Applying of Deposit Monies

Sometimes a landlord will use a key deposit for a purpose other than replacing the key such as applying key deposit money to the cost of repairing damage.  Per the law shown above, applying key deposit money for anything other than the direct costs of replacing the key is unlawful.  Ironically, even using the key deposit money for the purpose of repairing a damaged door appears as unlawful.

Remedies

When a landlord misuses or withholds key deposit, a tenant may seek an Order from the Landlord Tenant Board in accordance to section 135(1) of the Residential Tenancies Act, 2006. . Upon satisfaction that the landlord improperly made use or withheld the key deposit, the Landlord Tenant Board may issue an Order directing the landlord to return the key deposit money to the tenant.  Specifically, section 135(1) states:

135 (1) A tenant or former tenant of a rental unit may apply to the Board for an order that the landlord, superintendent or agent of the landlord pay to the tenant any money the person collected or retained in contravention of this Act or the Tenant Protection Act, 1997.

When applying to the Landlord Tenant Board for return of key deposit monies unlawfully withheld or applied to another concern, the tenant must use the mandatory Form T1 document as required by the Landlord Tenant Board.

Summary Comment

A landlord may require a key deposit; however, the amount of the deposit must be limited to the direct cost of replacing the key (or card or other access device).  The direct cost means that the sum of the deposit must be equivalent to the amount charged by the supplier of the key.  The landlord is unable to charge a sum that includes compensation for inconvenience to the landlord, or other sum.  Additionally, a key deposit must be applied only to the replacement of a key.  It is unlawful for a landlord to apply monies held as a key deposit for any reason such as rent shortfall, repairs of damage, or for loss of anything other than the replacement of the key.


Ranger Paralegal Service provides affordable legal help and professional representation including Landlord Tenant Board services for clients located in Oshawa, Lindsay, Pickering, Cobourg, Bowmanville, among other places!

Need Help? Let's Get Started Today

ATTENTION: Do not send any confidential information through this website form.  Use this website form only for making an introduction.

For more information, fill out the form below to send a direct inquiry to Ranger Paralegal Service

ATTENTION: Confidential details about your case must not be sent through this website.  Use of this website does not establish a legal-representative/client relationship.  Do not include confidential details about your case by email or phone.  Use this website only for an introduction with a Ranger Paralegal Service representative.
Ranger Paralegal Service

138 Castlebar Crescent.
Oshawa, Ontario,
L1J 7B4

P: (905) 240-7529
E: rps@ranger.legal

Hours of Business:

9:00AM – 5:00PM
9:00AM – 5:00PM
9:00AM – 5:00PM
9:00AM – 5:00PM
9:00AM – 5:00PM
Monday:
Tuesday:
Wednesday:
Thursday:
Friday:

By appointment only.  Please call for details.

SSL Secured
Trust https://ranger.legal


Animated Spinner