Three things decide this. The Board’s cap is $50,000, and section 207(3) provides that any claim above it is extinguished once the Board issues its order — so a larger claim belongs in court, and that decision is made once. Deadlines: an L2 while the tenant is in possession, or an L10 within one year of them ceasing to be, and only where they moved out on or after 1 September 2021. The deposit is not yours to apply. Section 105(1) permits only a rent deposit, damage and pet deposits are prohibited and an offence, and section 106(10) requires the rent deposit to be applied to the last rent period — the Board does any set-off itself under section 89(2). You must prove undue damage caused wilfully or negligently, and estimates are acceptable where the work is not yet done.
The tenant has gone and the unit is wrecked, or they are still there and doing damage. You want to know what you can recover, from what, and by when. There is one trap in here that can cost you more than the damage did.
The trap, first, because it is irreversible. The Board can only order up to $50,000. Section 207(3) of the Residential Tenancies Act provides that where a party claims a sum within the Board’s jurisdiction, “all rights of the party in excess of the Board’s monetary jurisdiction are extinguished once the Board issues its order”. The LTB says it plainly in its own instructions: “Once the LTB issues an order based on your application, you no longer have any claim to amounts greater than $50,000 from your tenant.” A landlord with a $62,000 claim who files at the Board for $50,000 loses the $12,000 permanently. Above the cap, section 207(2) sends you to court instead. Decide that before you file, not after.
What you have to prove
Section 34: “The tenant is responsible for the repair of undue damage to the rental unit or residential complex caused by the wilful or negligent conduct of the tenant, another occupant of the rental unit or a person permitted in the residential complex by the tenant.”
Note the word “undue”. The statute does not say any damage. Ordinary wear is not recoverable, and section 33 separately makes the tenant responsible only for “ordinary cleanliness” unless the agreement puts cleaning on the landlord.
| Element | What section 89(1)(a) requires |
|---|---|
| Damage | To the rental unit or the residential complex |
| Undue | Beyond ordinary wear. The statute’s word |
| Wilfully or negligently | Not accidental in the ordinary sense |
| By whom | The tenant, another occupant, or a person the tenant permitted in the complex |
| When | While the tenant was in possession |
| Amount | “Reasonable costs that the landlord has incurred or will incur” for repair, or replacement where repairing is not reasonable |
“Or will incur” matters. You do not have to have done the work. The LTB’s own instructions confirm it: “If you have not yet done the repairs or made the replacements, you can include estimates of the repair or replacement costs.”
But the Board expects the arithmetic. The same instructions require you to “explain in detail what damage occurred to the property and how you calculated the costs you are claiming… Be specific; for example, include the cost for each repair, or the cost to replace each damaged item.”
Which form, and by when
| Situation | Form | Deadline |
|---|---|---|
| Tenant still in possession | L2 | Where it follows a notice of termination, no later than 30 days after the termination date in the notice (RTA s. 69(2)). That 30-day limit does not apply to an application based on failure to pay rent (s. 69(3)) |
| Tenant already moved out | L10 | No later than one year after the tenant ceased to be in possession (s. 89(1.1)(b)) — and only where they moved out on or after 1 September 2021 (s. 89(1)(b)) |
| Damage claim with no eviction claim | L2 | No prior notice required. The LTB: there are no steps you must take first if you are applying for compensation for damage “and you are not applying to end the tenancy” |
The 1 September 2021 cut-off is real and it is absolute. Before the 2020 amendments, a landlord could not pursue a former tenant at the Board at all. The LTB states it plainly: “You can only file this application if the tenant moved out of the rental unit on or after September 1, 2021.” If they left before that date, the Board is closed to you and the route is court.
The filing fee for an L2 or an L10 is $201, or $186 through the Tribunals Ontario Portal. LTB fees are non-refundable.
The deposit is not a damage deposit, and never was
Section 105(1) is as short as it is absolute: “The only security deposit that a landlord may collect is a rent deposit collected in accordance with section 106.”
And section 105(2) defines security deposit broadly enough to catch everything people try — “money, property or a right… held by or for the account of the landlord as security for the performance of an obligation or the payment of a liability of the tenant or to be returned to the tenant upon the happening of a condition.”
| Deposit | Legal in Ontario_ |
|---|---|
| Last month’s rent deposit | Yes, if required on or before entering the agreement (s. 106(1)), capped at the lesser of one rent period and one month (s. 106(2)) |
| Damage deposit | No. Prohibited by s. 105(1) and an offence under s. 234(d) |
| Pet deposit | No. Same provisions |
| A lease clause requiring either | Void. The Government of Ontario lists terms requiring “damage or pet deposits” among additional terms that are “void (not valid or legally binding) and cannot be enforced” |
The Government of Ontario says it directly to tenants: “The tenant does not have to provide any other form of deposit, such as pet or damage deposits. If the tenant pays anything more, the tenant can apply to the Landlord and Tenant Board to get the money back.” The mechanism is section 135(1).
Also void, from the same list: a clause requiring the tenant “to pay for all or part of the repairs that are the responsibility of the landlord”, and a clause that does “not allow pets” — although a landlord may require compliance with condominium rules, which may prohibit certain pets.
What the rent deposit can be applied to: one thing
Section 106(10): a landlord “shall apply a rent deposit… in payment of the rent for the last rent period before the tenancy terminates.”
It is mandatory and single-purpose. There is no discretion to redirect it to damage or to arrears. And section 234(f) makes it an offence to fail to apply the deposit to the last month in contravention of section 106(10) — punishable under section 238 by up to $100,000 for an individual and $500,000 for a corporation since 1 July 2026.
There is exactly one place the deposit meets a damage claim, and it is not one you control. Section 89(2): where the Board orders payment for damage and termination of the tenancy, the Board “shall set off” against the tenant’s payment the amount of any rent deposit or interest on it that would be owing on termination. The Board does the set-off. You do not.
The interest, and the rate that is not one rate
Section 106(6) does not name a number. The rate is “a rate equal to the guideline determined under section 120 that is in effect at the time payment becomes due.”
So it is the rent increase guideline for the calendar year in which each annual payment falls due — not a rate fixed at move-in. A deposit held several years accrues at a different rate each year.
| Calendar year | Guideline |
|---|---|
| 2027 | 1.9% |
| 2026 | 2.1% |
| 2025 | 2.5% |
| 2024 | 2.5% |
| 2023 | 2.5% |
| 2022 | 1.2% |
| 2021 | 0% — set by RTA s. 120(3.1) despite the published guideline |
| 2020 | 2.2% |
The 2021 zero catches people out routinely. Interest that came due during 2021 was nil, by statute.
Failure to pay it has two consequences. Section 106(9) lets the tenant deduct it from a later rent payment. And section 234(e) makes failing to pay annual interest an offence.
One useful rule that runs the other way: where rent increases, section 106(3) lets you require a top-up of the deposit to the new amount — and the Government of Ontario confirms “the landlord can use the interest on the rent deposit to top-up the rent deposit.” That is the tidiest way to handle both obligations at once.
If they are still there past the termination date
Section 86: “A landlord is entitled to compensation for the use and occupation of a rental unit by a tenant who does not vacate the unit after his or her tenancy is terminated by order, notice or agreement.” Section 87(3) is the application route for it.
Arrears themselves run on the same clock as damage: section 87(1.1) allows an application while the tenant is in possession, or no later than one year after they ceased to be.
What I would do, in order
- Value the claim before you choose the forum. If it is genuinely over $50,000, section 207(3) means filing at the Board destroys the excess. That decision is made once.
- Photograph everything, dated, before and after. The Board wants each item costed separately, not a lump sum.
- Get quotes even if you have not done the work. Estimates are expressly acceptable.
- Check the move-out date against 1 September 2021. Earlier than that and the Board cannot help you at all.
- Diarise one year from the day possession ended. That is the L10 deadline and it is hard.
- Do not touch the last month’s rent deposit. It goes to the last rent period. Applying it to damage is an offence, and the Board will do any set-off itself under section 89(2).
- Pay the deposit interest annually at the right year’s rate, or use it to top up the deposit when rent rises.
- If you took a damage or pet deposit, give it back. It is prohibited, it is an offence, and the tenant can recover it under section 135(1).
What is not on this page
No case law, so nothing on where the Board draws the line between ordinary wear and “undue” damage — that is decided case by case and it is the question you most want answered. No estimate of how long an L2 or L10 takes to be heard. And nothing about a tenant still in possession where you are also seeking eviction, which is a different application with different notice requirements.
Turning over a damaged unit in Etobicoke or the GTA?
If the plan after this tenant is to sell rather than re-rent, the repair decision changes: some of what you would fix for a tenant is money you will not get back from a buyer, and some of it you cannot skip. Send me the address and photographs and I will tell you what actually moves the sale price and what does not. On the L10 itself, use a paralegal. No cost and no obligation.
connect@jatindua.com · 437-987-1925 · Book a free consultation
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Frequently asked questions
How much can the Landlord and Tenant Board order a tenant to pay?
Up to $50,000. Section 207(1) allows the Board to order payment up to the greater of $10,000 and the monetary jurisdiction of the Small Claims Court, which rose to $50,000 on 1 October 2025. The critical provision is section 207(3): where a party claims a sum within the Board’s jurisdiction, all rights in excess of that jurisdiction are extinguished once the Board issues its order. The LTB states it in its own instructions: once the LTB issues an order based on your application, you no longer have any claim to amounts greater than $50,000. A larger claim should go to court under section 207(2).
How long do I have to claim for damage after a tenant moves out?
One year. Section 89(1.1) allows an application while the tenant is in possession, or no later than one year after the tenant or former tenant ceased to be in possession. There is also a hard eligibility date: section 89(1)(b) confines the application to tenants who left on or after the commencement of the 2020 amendment, which the Board states is 1 September 2021. If your former tenant moved out before that date the Board cannot assist and the route is court.
Can I keep the last month’s rent deposit to cover damage?
No, and doing so is an offence. Section 106(10) provides that a landlord shall apply a rent deposit in payment of the rent for the last rent period before the tenancy terminates. It is mandatory and single-purpose. Section 234(f) makes it an offence to fail to apply the deposit to the last month in contravention of section 106(10), and since 1 July 2026 the maximum fine under section 238 is $100,000 for an individual and $500,000 for a corporation. The only place the deposit meets a damage claim is section 89(2), under which the Board itself sets off the deposit where it orders both payment and termination.
Can I charge a damage deposit or a pet deposit in Ontario?
No. Section 105(1) provides that the only security deposit a landlord may collect is a rent deposit collected in accordance with section 106, and section 105(2) defines security deposit broadly enough to catch money held as security for the performance of an obligation or the payment of a liability. Requiring or receiving a security deposit contrary to section 105 is an offence under section 234(d), and a tenant may recover it under section 135(1). The Government of Ontario also lists lease terms requiring damage or pet deposits among additional terms that are void and cannot be enforced.
What is the maximum last month’s rent deposit?
Section 106(2) caps it at the lesser of the amount of rent for one rent period and the amount of rent for one month, and section 106(1) requires it to be asked for on or before entering into the tenancy agreement. Where the lawful rent later increases, section 106(3) allows a landlord to require a top-up, and the Government of Ontario confirms the landlord can use the accrued interest on the deposit to make that top-up.
What interest do I owe on a rent deposit?
Section 106(6) sets the rate as a rate equal to the rent increase guideline in effect at the time the payment becomes due, so it is the guideline for the calendar year in which each annual payment falls due rather than a rate fixed at move-in. The guideline is 2.1 per cent for 2026 and 1.9 per cent for 2027. Note the anomaly for 2021, which section 120(3.1) set at zero per cent despite the guideline published in The Ontario Gazette. Failing to pay the interest lets the tenant deduct it from a later rent payment under section 106(9) and is an offence under section 234(e).
What counts as damage I can actually claim for?
Section 34 makes the tenant responsible for the repair of undue damage caused by the wilful or negligent conduct of the tenant, another occupant, or a person the tenant permitted in the complex. The word undue is doing the work: ordinary wear is not recoverable, and section 33 makes the tenant responsible only for ordinary cleanliness unless the agreement puts cleaning on the landlord. Where the line falls between wear and undue damage is decided case by case, and that is a question for a paralegal rather than an article.
Do I have to complete the repairs before I apply?
No. Section 89(1) allows a landlord to claim reasonable costs that the landlord has incurred or will incur, and the Board’s own instructions confirm that if you have not yet done the repairs or made the replacements you can include estimates. The Board does expect detail: it requires you to explain what damage occurred and how you calculated the costs, item by item.
Which form do I use, and what does it cost?
An L2 where the tenant is still in possession, and an L10 where they have moved out. Where an L2 follows a notice of termination it must be filed no later than thirty days after the termination date in the notice under section 69(2), although that limit does not apply to an application based on failure to pay rent. A damage claim that does not also seek to end the tenancy needs no prior notice at all. The filing fee is $201, or $186 through the Tribunals Ontario Portal, and LTB fees are non-refundable.
Can I claim for the period after the termination date when the tenant would not leave?
Yes. Section 86 entitles a landlord to compensation for the use and occupation of a rental unit by a tenant who does not vacate after the tenancy is terminated by order, notice or agreement, and section 87(3) provides the application route. Arrears themselves run on the same one-year clock as damage under section 87(1.1).
Related reading
- You have an eviction order and the tenant is still there
- Everything that changes in Ontario tenancy law on 21 September 2026
- The N5 notice: damage, interference and overcrowding
- Ontario rental deposit rules
Sources
Every figure on this page traces to one of these, and each was read on 1 September 2026. Primary sources only — statute, regulation, and the government or agency that administers the rule. Where I could not verify something from a primary source, the page says so instead of guessing.
- Residential Tenancies Act, 2006, sections 33, 34, 86, 87, 89, 105, 106 and 207. Government of Ontario e-Laws, consolidated text read 1 September 2026. Section 34 makes a tenant responsible for undue damage caused by wilful or negligent conduct. Section 89(1.1) allows a damage application while the tenant is in possession or no later than one year after they ceased to be. Section 89(2) requires the Board to set off a rent deposit where it orders payment and termination together. Section 105(1) permits only a rent deposit. Section 106(2) caps it at the lesser of one rent period and one month, and section 106(10) requires it to be applied to the last rent period. Section 207(1) caps the Board’s monetary jurisdiction and section 207(3) extinguishes any excess once an order issues. Accessed 1 September 2026.
- Instructions: Form L10, Application to Collect Money a Former Tenant Owes — LTB. Landlord and Tenant Board, Tribunals Ontario, read 1 September 2026. States that the application can only be filed where the tenant moved out on or after 1 September 2021 and not more than one year after the date they moved out, that a landlord must explain in detail what damage occurred and how the costs were calculated, that estimates may be used where repairs have not yet been done, and that the most the LTB can order is $50,000 with any claim above that extinguished once an order issues. Accessed 1 September 2026.
- Instructions: Form L2 — Landlord and Tenant Board. Landlord and Tenant Board, Tribunals Ontario, read 1 September 2026. States that the application cannot be filed once the tenant has moved out except on abandonment, that where it follows a notice of termination it must be filed no later than thirty days after the termination date in the notice, and that no prior notice is required where a landlord applies for compensation for damage without also applying to end the tenancy. Accessed 1 September 2026.
- Forms, filing and fees — Landlord and Tenant Board. Tribunals Ontario, read 1 September 2026. Publishes the filing fee for an L2 or L10 application at $201, or $186 filed through the Tribunals Ontario Portal, and states that LTB fees are non-refundable. Accessed 1 September 2026.
- Residential rent increases — Government of Ontario. Government of Ontario, page updated 23 June 2026. Publishes the rent increase guideline table from 1991 onward, including 2.1 per cent for 2026 and 1.9 per cent for 2027, and states that the guideline is the maximum a landlord can increase most tenants’ rent during a year without Board approval. Accessed 1 September 2026.
- A Guide to the Residential Tenancy Agreement, the standard lease (PDF) — Ontario. Ministry of Municipal Affairs and Housing. Part H states that a tenant does not have to provide any other form of deposit such as pet or damage deposits, that a tenant paying more may apply to the Board to get the money back, and that a landlord may use the interest on a rent deposit to top it up when rent increases. Accessed 1 September 2026.
- A guide to Ontario’s standard lease — Government of Ontario. Government of Ontario, page updated 27 October 2025. States that additional lease terms are void and cannot be enforced where they require the tenant to pay deposits, fees or penalties not permitted under the Act such as damage or pet deposits, require the tenant to pay for repairs that are the landlord’s responsibility, or do not allow pets, although a landlord may require compliance with condominium rules. Accessed 1 September 2026.
- Residential Tenancies Act, 2006, S.O. 2006, c. 17. Government of Ontario e-Laws, consolidated text read 1 September 2026 through the e-Laws JSON API. Consolidation period from 1 July 2026; last amendment 2025, c. 14, Sched. 12. The consolidation carries twenty-eight not-yet-in-force amendment notes dated 21 September 2026, each in the form “Note: On September 21, 2026, the day named by order of the Lieutenant Governor in Council…” Accessed 1 September 2026.
About the author — Jatin Dua, Etobicoke real estate agent
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke. I write these pages the same way I work a file: read the primary source, quote it, date it, and say plainly where the source is silent or where two sources disagree. If a figure on this page has no citation beside it, that is a mistake and I want to hear about it.
I work with buyers, sellers, renters and investors across Etobicoke, Mimico, Humber Bay Shores, New Toronto, Long Branch, Alderwood and Stonegate–Queensway. connect@jatindua.com or 437-987-1925.