Pawn Shop and Second-Hand Dealer Premises in Ontario: Licences, Records, Security and Lease

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 18 October 2026 · 10 min read — what a pawn or second-hand dealer needs under the Pawnbrokers Act and Toronto’s licensing rules, records and police reporting, interest and FINTRAC rules, security, zoning and the lease.

Looking for pawn shop space in Toronto or the GTA? Tell me what you need and I will send you units that fit, with the zoning and the lease checked before you commit.

Pawn, buy-sell or gold buying: the licence follows the activity

“Pawn shop” covers three different businesses, and in Ontario each is regulated separately. Many stores do all three, which means stacking licences and record-keeping rules:

Each of these has a premises consequence: where you hold goods, how long you hold them, what sign goes over the door, and when you may open. Decide your business model first, then look for a unit that can support it.

The Pawnbrokers Act is still the law in 2026

Ontario’s Pawnbrokers Act, R.S.O. 1990, c. P.6, is still in force. e-Laws notes that the Act “is repealed on a day to be named by proclamation” under a 2019 statute, but as of October 2026 no day has been named. Until that happens, these sections shape the store:

• Section 2: you need a licence from the municipality where you carry on business, renewed annually.
• Section 4: one licence covers only one shop.
• Section 6: you must give the municipality $2,000 security for compliance with the Act.
• Section 7: a sign over the front door with your name and the word “Pawnbroker” (or “Prêteur sur gages”), and a notice inside showing redemption rights, lawful interest rates and maximum charges.
• Section 8: you may not deal with anyone who appears under 18 or under the influence of alcohol or drugs. You may not do business on Sundays, Good Friday, Christmas Day or proclaimed public holidays, or before 8 a.m. or after 8 p.m. on any other day. You may not take Crown decorations in pawn, or melt unredeemed precious metal unless your municipal council authorizes it.
• Section 19: if a pledge is destroyed or damaged by fire, lightning, tempest or other insured perils, you are still liable to the pawner for its value as the Act calculates it. The Act gives you an insurable interest to cover it.
• Sections 20 to 22: pledges are generally redeemable for at least one year, with notice steps before larger pledges become yours.

Toronto’s Chapter 545 builds on the Act. Article XXV requires the $2,000 security before the licence issues and bans pawnbrokers from advertising on City property. The City’s Pawn Shop page lists the same application package as other licences, a posted total fee of $788.33, and a $2,000 security bond by certified cheque on approval.

Records, holding periods and police reporting

The record-keeping rules decide how your counter and back room are laid out.

• Pawn book and tickets. Section 9 of the Act requires an entry before any money is lent: the date, the pawner’s name, address and description, ID details, a description of the pledge and the amount lent, numbered in order. Section 10 sets out what the pawnticket must show. Section 12 requires an alphabetical list of pawners kept for at least a year after the year it covers.
• Daily report. Section 13 requires a report before noon on every business day, covering the previous business day’s transactions, to the chief of police or another person the municipal council designates.
• Police access. Section 15 gives police officers access to your books, papers and pledges at all times. Section 11 requires you to report goods you have reasonable cause to suspect are stolen.
• Second-hand purchases in Toronto. Goods you buy or take in exchange must be held for 15 clear days, not counting Sundays and holidays, on the licensed premises and separate from earlier stock (section 545-284). Old gold and jewellery bought for melting have their own 15-day hold under section 545-292. Daily transcripts are due by 9 a.m. each weekday, and you must post a notice of collection sign.
• Register format. The City says that starting September 30, 2026, second-hand registers no longer have to be a book and can be kept on paper or electronically, with the same required details.

In practice, you need a transaction counter with good lighting and an ID camera, a back office for records, and a pledge room organized by ticket number and date. Pledges can sit for a year or more, so pledge storage, not the sales floor, usually decides the unit size.

Interest limits and FINTRAC

The Criminal Code now defines the criminal rate as an annual percentage rate above 35 per cent. The federal Criminal Interest Rate Regulations (SOR/2024-114) carve out pawnbroking loans. Section 347 does not apply where the lender carries on a business related to pawnbroking, the credit is advanced against pawned goods other than a vehicle, the lender’s only recourse on default is seizing the pawned goods, and the loan is under $1,000 at an APR of no more than 48 per cent. Larger pawn loans fall back under the general limit. Your rate notice, required by section 7 of the Pawnbrokers Act, has to reflect this.

FINTRAC treats a business that buys or sells precious metals, precious stones or jewellery as a dealer in precious metals and stones once it does a purchase or sale of $10,000 or more. Dealers then have obligations including a compliance program, client identification, record keeping and reports such as large cash transaction reports for $10,000 or more in cash. If gold and jewellery are a big part of your model, plan for a private area where identification and source-of-funds questions can be handled away from the counter queue.

What the unit must have: security first

• A secure pledge room or vault, ideally windowless, with one controlled door.
• Floor capacity for a safe. Heavy safes can exceed what an upper floor or an older slab was designed for. Ask the landlord for structural information before you order one.
• A monitored alarm, cameras on the counter and entrance, and good exterior lighting. Insurers will set their own requirements, so get their list before the fit-out.
• Security grilles or roll-down shutters. Check the landlord’s storefront rules and the municipality’s sign and building rules before you assume you can add exterior shutters.
• Sprinkler and fire protection. Because section 19 makes you liable for pledges lost to fire, the building’s fire protection and your insurance are part of the business case, not overhead.
• Separate holding areas for second-hand purchases in their 15-day hold, divided by date.

Zoning and what landlords think

Toronto’s Zoning By-law 569-2013 has no specific definition for a pawn shop. It defines a “Retail Store” as premises in which goods are sold, rented or leased, and a “Financial Institution” as premises providing financial services to the public. A pawn business does both, so ask the zoning examiner which use applies at your address. A site-specific exception may permit one and not the other. In Toronto, licensing triggers zoning approval for most new applications, unless you take over a business with a valid licence in the same category or one that expired less than three years before.

Outside Toronto, Mississauga’s second-hand goods shop licence needs a zoning certificate confirming the use is permitted at the location. Other GTA municipalities have their own licensing by-laws and zoning approaches. The Pawnbrokers Act requires a municipal licence wherever you operate, so start with the licensing office for the specific address.

The bigger hurdle is often the landlord. Many plaza leases list pawnshops, cheque cashing and payday lenders as prohibited uses, and other tenants may have negotiated that list. Ask for the prohibited-use schedule before you tour a second unit in the same centre. If you also cash cheques or exchange currency, my money services business premises guide covers that layer.

Hours, signs and the plaza

Two statutory rules collide with standard plaza leases. First, hours: the Pawnbrokers Act bars pawn business on Sundays, Good Friday, Christmas Day and proclaimed holidays, and outside 8 a.m. to 8 p.m. Toronto’s second-hand rules separately bar business on statutory or other holidays and between 11 p.m. and 7 a.m., with a midnight close allowed on Saturdays and the day before a holiday. Many plaza leases require tenants to open on Sundays and during mall hours.

Second, signs. You need a sign over the front door with your name and “Pawnbroker”. In Toronto, a second-hand shop must also show “Licensed Second-hand Shop” in large plain letters over the street door, in the front window or elsewhere conspicuous on the front. Exterior signs in Toronto also need a sign permit under Chapter 694, with the property owner’s consent. Make sure the landlord’s sign criteria allow both required wordings.

The lease clauses that matter for a pawn shop

1. Permitted use. “Pawnbroker licensed under the Pawnbrokers Act, purchase and sale of second-hand goods, and purchase of precious metals and jewellery, as licensed by the municipality.” My use clause guide explains why each activity needs to be named.
2. Prohibited uses and exclusives. Written confirmation that no existing tenant’s lease bars your use, and an indemnity if one later surfaces.
3. Licence condition. The lease is conditional on the pawn, second-hand and any gold dealer licences, including zoning approval.
4. Hours. An express carve-out from any continuous operation or mall-hours clause for hours the Pawnbrokers Act or the municipal by-law prohibit.
5. Security work. Approval for the vault, safe, alarm, cameras, shutters and reinforced doors, and what must be removed at the end of the term.
6. Structural. The landlord’s confirmation of floor capacity for your safe, or the right to have an engineer check it.
7. Signage. Rights for the “Pawnbroker” and “Licensed Second-hand Shop” wording plus your trade name.
8. Access for police and inspectors. Acknowledgment that police and municipal inspection under the Act and by-law is not a breach of quiet enjoyment or a landlord issue.
9. Relocation and assignment. Delete relocation, or make the landlord pay for moving and re-licensing. Allow assignment on a sale, conditional on the buyer getting new licences, because Toronto licences are not transferable.

Deal-killers to check on a viewing

• A prohibited-use schedule that names pawnbrokers, second-hand dealers or gold buyers.
• A mandatory Sunday or late-night hours clause the landlord won’t change.
• No space for a windowless pledge room, or a floor that can’t take a safe.
• Full-glass storefronts with no allowance for grilles, and an insurer who requires them.
• Zoning that permits retail but not financial services, or the reverse, at a site with a specific exception.
• Neighbours such as a school or a residential entrance, which can make the landlord nervous even where the law is silent.

If you plan to sell mostly jewellery, also read my jewellery store premises guide. For a lower-risk used goods model without lending, see the thrift and consignment store guide.

Where I fit

I help pawn, buy-sell and gold-buying businesses across Toronto, Mississauga, Brampton and the rest of the GTA find landlords who will accept the use and units that can take a vault and a pledge room. I read the prohibited-use schedule and hours clauses first, check zoning and licensing for the exact address, and negotiate the security work and carve-outs into the lease. If you are buying an existing store, my retail store valuation tool is a first step.

Frequently asked questions

Sources

• Ontario e-Laws: Pawnbrokers Act, R.S.O. 1990, c. P.6 — licence, security, signs, hours, records, daily police report, redemption
• City of Toronto: Pawn Shop licence — requirements, fees, $2,000 security bond
• City of Toronto: Second Hand Shop licence — 2026 register change, zoning approval
• Toronto Municipal Code Chapter 545, Licensing (Articles XXIII to XXV) — 15-day holds, registers, transcripts, signs, hours, pawnbroker security
• Justice Laws: Criminal Interest Rate Regulations (SOR/2024-114) — pawnbroking loan exemption under $1,000 at 48% APR or less
• Justice Laws: Criminal Code, section 347 — criminal rate above 35% APR
• FINTRAC: Dealers in precious metals and stones — $10,000 threshold and obligations
• City of Mississauga: Apply for a second-hand goods shop licence — zoning certificate required
• City of Toronto Zoning By-law 569-2013, Chapter 800 Definitions — Retail Store and Financial Institution definitions

Related reading

• Thrift and consignment store premises
• Jewellery store premises in Ontario
• Money services business premises
• Cellphone repair store premises
• The commercial lease use clause
• Retail store valuation tool
• The use clause in a commercial lease