In Ontario, it is strictly illegal for a landlord to charge any application fee, processing fee, or credit check fee. Under the Residential Tenancies Act (RTA), landlords can only legally collect a rent deposit (last month’s rent) and a refundable key deposit. If you were forced to pay an illegal fee, you can file a T1 application at the LTB to recover 100% of your money.
Searching for a rental apartment in major Ontario cities like Toronto, Mississauga, or Ottawa is often a highly competitive and stressful experience. In a tight housing market, some landlords and property management companies try to take advantage of desperate renters by charging “application fees” or demanding money to process a background check.
It is crucial to know your rights as of May 2026. The Residential Tenancies Act (RTA) strictly prohibits landlords from charging prospective tenants any fees just to apply for a unit. 📍 Whether they call it a holding fee, an administration charge, or a credit check fee, it is entirely unlawful in Ontario. This guide provides a step-by-step breakdown of how to identify illegal charges, how to negotiate with a prospective landlord, and how to use the Landlord and Tenant Board (LTB) to get your hard-earned money back.
Step-by-Step Process for Handling Illegal Fees in Ontario
If you have already paid an illegal fee just to secure an apartment, do not panic. Ontario law provides clear mechanisms to recover these unlawful charges through the Landlord and Tenant Board (LTB).
Step 1: Identifying the Illegal Charge
Before taking action, you must confirm the fee is actually illegal. A landlord is legally allowed to ask for a rent deposit (which can be no more than one month’s rent or the rent for one period, whichever is less) and a refundable key deposit (which cannot exceed the actual cost of replacing the keys). 🔍 Anything else-such as a $50 application fee, a $100 holding deposit that doesn’t go towards rent, or a $25 credit check fee-is an illegal charge.
Step 2: Requesting a Voluntary Refund
Your first step should be to send a polite but firm written request to the landlord or property manager. In your email or letter, clearly state that under the Residential Tenancies Act, application and credit check fees are illegal. Request that the money be refunded immediately or applied to your first month’s rent. Often, landlords will refund the money to avoid legal trouble when they realize you know your rights.
Step 3: Filing a T1 Application at the LTB
If the landlord ignores your email or refuses to return the money, you must file a formal legal application. You will need to file a T1 Application: Tenant Application for a Rebate of Money the Landlord Owes. 📝 This is done entirely online through the Tribunals Ontario Portal. You will select the specific option indicating the landlord collected an illegal charge.
Step 4: Gathering Your Evidence
To win your case, you need concrete proof that you paid the fee. Collect your bank statements, e-transfer confirmation emails, receipts provided by the landlord, and any text messages or emails where the landlord explicitly demanded the “application fee” or “credit check fee.” You will upload this Document Book to the LTB portal at least 7 days before your hearing.
Step 5: Attending the Virtual LTB Hearing
Eventually, you will receive a Notice of Hearing containing a Microsoft Teams link. 👨🔨 During the virtual hearing, an adjudicator will review your evidence. Because the law regarding application fees is absolute, if you can prove you paid it, the adjudicator will typically issue a binding Order forcing the landlord to repay the illegal fee, plus the cost of your LTB filing fee.
How Much Does it Cost in Ontario?
While recovering an illegal fee involves some upfront costs if you have to go to court, the system is designed to reimburse successful tenants.
| Expense Type | Estimated Cost (CAD) | Details and Explanation |
|---|---|---|
| Credit Check / Application Fee | $0.00 (Legally) | Landlords cannot charge this. You should pay $0. If they want a credit check, they must pay for it themselves out of their own pocket. |
| LTB T1 Online Filing Fee | $47.00 | The standard fee to file a T1 via the Tribunals Ontario Portal. If you win, the adjudicator almost always orders the landlord to refund this $47 to you. |
| Low-Income Fee Waiver | $0.00 | If you are on Ontario Works, ODSP, or have a low income, you can submit a Fee Waiver Request to the LTB to file for free. |
| Paralegal Representation | $400 – $1,000 | If you hire a licensed paralegal to fight the case for you. Note: the LTB generally does not force the landlord to reimburse your paralegal fees. |
It is generally recommended for tenants to represent themselves in straightforward T1 cases for illegal charges, as hiring a paralegal might cost more than the $100 illegal fee you are trying to recover. 💵
How Long Does the Process Take?
Patience is required when dealing with the Landlord and Tenant Board due to ongoing provincial backlogs.
- Direct Negotiation: A demand letter to the landlord can often result in a refund within 2 to 5 days.
- Filing the T1: You must file your T1 application within 1 year from the date the landlord illegally collected the money. If you wait longer, the LTB will dismiss it.
- Getting a Hearing Date: Currently, it can take 6 to 10 months for the LTB to schedule and hear a tenant application.
Frequently Asked Questions (FAQ)
Can a landlord ask me to provide my own credit report?
Yes. While a landlord cannot charge you money to run a credit check, they are legally allowed to ask you to provide a copy of your own credit report (like an Equifax or TransUnion report) as part of your application package. You can often obtain these reports for free online.
Is a damage deposit legal in Ontario?
No, damage deposits are strictly illegal in Ontario. A landlord cannot ask for a $500 “security deposit” or “pet deposit” to cover potential damages. They can only collect a rent deposit, which must be applied strictly to the last month’s rent before you move out.
What if I paid a holding fee and decided not to move in?
If you paid a “holding fee” and the landlord accepts you as a tenant, they must apply that money to your last month’s rent. If the landlord rejects your application, they must refund it immediately. If you back out, the law is slightly grey, but generally, landlords cannot keep holding fees as a penalty and you can file a T1 to recover it.
Can a landlord charge me a fee to use an online payment portal?
No. If a landlord insists that you pay rent through a third-party app or portal that charges a “convenience fee” or processing fee, this is considered an illegal charge under the RTA. You have the right to request a free method of paying rent, such as cheques or standard e-transfers.
Can a condo board charge me an application fee?
Condominium corporations operate under the Condominium Act, not just the RTA. Sometimes condo boards charge elevator booking fees or move-in deposits. While your landlord cannot profit from these, if the condo board legally mandates a refundable elevator deposit, you are generally required to pay it directly to the condo corporation.
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