Ontario Rent Deposit Return Letter (Last Month's Rent Deposit)

Date: [[Letter Date]]

From:
[[Landlord Full Legal Name or Company Name]]
[[Landlord Mailing Address, City, Ontario, Postal Code]]
Phone: [[Landlord Phone]] | Email: [[Landlord Email]]

To:
[[Tenant Full Legal Name(s)]]
Forwarding Address: [[Tenant Forwarding Address, City, Province, Postal Code]]
Email: [[Tenant Email]]

Re: Return of Last Month's Rent Deposit and Final Accounting
Property: [[Full Rental Property Address, Unit Number, City, Ontario, Postal Code]]
Tenancy Period: [[Original Move-In Date]] to [[Move-Out Date]]
Original Lease / Tenancy Agreement Date: [[Agreement Date]], -

Dear [[Tenant Full Legal Name(s)]]:

This letter provides the final accounting and return of your last month's rent deposit (LMR) together with accrued interest under the *Residential Tenancies Act, 2006* (RTA), S.O. 2006, c. 17.

Ontario law permits landlords to collect only a last month's rent deposit. No traditional security deposit or damage deposit is permitted. The LMR deposit must be applied to the rent for the tenant's final month of occupancy. Any excess or unapplied portion, plus interest, must be returned., -

1. Last Month's Rent Deposit Received

Amount of LMR deposit received at start of tenancy: $[[LMR Deposit Amount]]

Date received: [[Date LMR Deposit Received]], -

2. Interest Calculation

Under RTA section 106, the Landlord must pay interest on the LMR deposit annually at the rate equal to the rent increase guideline in effect for the year the interest is payable.

Guideline interest rate(s) applied during tenancy:

Total interest accrued: $[[Total Interest Amount]]

Note on interest timing: Interest is calculated and payable on the anniversary of the date the deposit was received (or as otherwise required). If the tenancy ended mid-year, interest is prorated for the final period., -

3. Application of Deposit to Final Month's Rent

The LMR deposit has been applied as follows toward rent for the final period of occupancy:

• Rent owing for final month / period: $[[Final Period Rent Owed]]
• LMR deposit applied: $[[LMR Deposit Amount]]
• Balance of rent (if any) paid by other means: $[[Other Payment Amount or "N/A"]]

Net rent adjustment after LMR application: $[[Net Adjustment or "Deposit fully applied"]], -

4. Itemized Statement of Any Adjustments or Deductions

The following adjustments or permitted deductions (if any) have been made from amounts otherwise due. Note that the LMR deposit itself may not be used to cover damage, cleaning beyond normal wear, or unpaid rent from earlier periods (those would be separate claims pursued through the Landlord and Tenant Board).

1. [[Description of adjustment 1, e.g. "Credit for overpayment of rent in Month X due to rate change"]], $[[Amount 1 or credit]]

2. [[Description of adjustment 2, e.g. "Reimbursement for utility overpayment previously paid by Landlord on Tenant's behalf"]], $[[Amount 2]]

3. [[Description of adjustment 3, e.g. "N/A, no further adjustments"]], $[[0.00]]

Total adjustments / deductions: $[[Total Adjustments Amount]]

Important: Ontario law prohibits charging tenants for ordinary wear and tear. Only specific unpaid obligations may be pursued separately via LTB application (e.g., damage beyond normal wear, unpaid rent not covered by the LMR application)., -

5. Final Balance Calculation

The net balance of $[[Net Balance Owed to Tenant]] is enclosed herewith / has been transferred as follows:

Payment method: [[e.g. e-transfer to [[Tenant Email]] / cheque mailed to forwarding address / direct deposit to account [[Bank Details Masked]] ]]

Date of payment / transfer: [[Payment Date]], -

6. Forwarding Address and Contact Confirmation

The forwarding address used for this return and any future correspondence is:

[[Tenant Forwarding Address, City, Ontario, Postal Code]]

If this address is incorrect or changes, please notify the Landlord in writing immediately., -

7. Move-Out Inspection and Condition

A move-out inspection was [[conducted on [[Inspection Date]] / offered but declined by Tenant / not required]].

The Premises were returned in a condition consistent with the move-in inspection report, allowing for ordinary wear and tear. No claim for damages beyond ordinary wear and tear is being asserted in this accounting. Any separate claim for damage would be pursued through a separate LTB application (Form L2 or appropriate form) with supporting evidence and within applicable limitation periods., -

8. Legal Basis and Timelines (Ontario RTA)

• Only LMR deposits are lawful (RTA s. 105, 106).

• Interest must be paid annually at the guideline rate; tenants may deduct unpaid interest from rent.

• The deposit must be applied to the last month of the tenancy.

• Any refund of excess deposit plus interest must be made within a reasonable time after the end of the tenancy and receipt of the tenant's forwarding address in writing.

• Failure to properly account for or return the deposit and interest may result in an LTB order for payment plus costs. Tenants may file a T1 application with the Landlord and Tenant Board if the deposit is wrongfully withheld.

A copy of the relevant move-in / move-out condition report and any supporting invoices (if deductions were made from other funds) is attached or available upon request., -

9. Enclosures

1. Cheque or payment confirmation for net balance (if applicable).

2. Copy of original rent deposit receipt.

3. Copy of move-in condition report (if not previously provided).

4. Copy of move-out photos or inspection notes (if taken).

5. Current rent increase guideline information (for reference)., -

10. Contact for Questions

If you have questions about this accounting or the payment, contact:

[[Landlord or Property Manager Name]]
Phone: [[Landlord Phone]]
Email: [[Landlord Email]]

Please retain this letter for your records., -

11. Acknowledgement of Receipt (Optional for Tenant)

I acknowledge receipt of the net balance and this statement:

Tenant Signature: ______________________________ Date: ___________

Print Name: [[Tenant Full Legal Name(s)]], -

Landlord / Authorized Representative

Signature: ______________________________ Date: ___________

Print Name / Title: [[Landlord Signatory Name]], -

*Template, not professional legal advice. This letter concerns the return of a last month's rent deposit under the Residential Tenancies Act, 2006 (Ontario). Interest rate references the annual rent increase guideline published by the Ministry. Timelines and rules are current as of June 2026. Download official LTB forms and the current guideline rate from tribunalsontario.ca/ltb or ontario.ca. Actual facts, interest calculations, and any separate claims for damage must be verified against the specific tenancy records and current law. Parties should consult the Landlord and Tenant Board or qualified legal counsel for disputes or complex situations. This document does not replace required forms or official processes.*