📌 The Core Rule (Sections 105 and 106, Residential Tenancies Act):
A landlord is only entitled to collect the first month’s rent plus a maximum of one month’s rent deposit. This is why “first and last” is legal — not because it counts as two deposits, but because one is current rent and the other is the deposit for the last month. Any amount beyond this (a third or fourth month, a damage deposit, a pet deposit, etc.) is illegal under section 105, and if collected, the landlord is required to return it.
⚖️ The Exception (Corvers v. Bumbia):
If the tenant — without any demand or request from the landlord — voluntarily offers to prepay several months of rent, the courts have held that this kind of prepayment can be lawful. This principle comes from Corvers v. Bumbia, 2013 CanLII 92049 (ON SC), upheld on appeal in 2014 ONSC 985 (Div. Ct.). The reasoning is that the law is meant to prevent a landlord from demanding extra money, not to prohibit a tenant’s own free offer.
🔍 A Point Often Overlooked:
This exception only applies to prepaid rent — not to a deposit. That means the money must be applied immediately toward upcoming months’ rent. If that same voluntarily-offered money is, under the agreement, set aside specifically to be used for the final months of the tenancy instead, its true character shifts from “rent” to “deposit” — and it falls right back under the strict rule of section 106, which caps deposits at one month. The Landlord and Tenant Board has taken exactly this position in a comparable case, disallowing the excess.
🚨 This Isn’t Just a Civil Dispute — It’s an Offence:
Under section 234 of the RTA, demanding or collecting a deposit or amount contrary to sections 105 and 106 constitutes an offence. Under section 238, as of July 1, 2026, the maximum fine for this offence has risen to $100,000 for an individual and $500,000 for a corporation — separate from, and in addition to, any amount the landlord must repay to the tenant.
If you believe you have paid more than the legal limit, or your landlord has demanded an additional amount from you, contact our office to have your situation reviewed.
📍 Zarei Legal Services & Notary Public – Thornhill, Ontario
This post provides general legal information and is not a substitute for advice tailored to the specific facts of your case.
ADEL ZAREI
LICENSED PARALEGAL (ONTARIO)
ATTORNEY AT LAW (IRAN)
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