How to Write a Lease Agreement in Ontario: 2026 Landlord Guide

A lease agreement is the foundation of every successful long-term tenancy. In Ontario, though, writing a lease is not as simple as downloading a template and filling in the rent amount. The Residential Tenancies Act (RTA) sets strict rules about what your lease must say, what it must not say, and which government form you are required to use. Get any of it wrong and the offending clause is void — or worse, you hand your tenant a legal remedy.

This guide walks you through how to write a lease agreement in Ontario in 2026, from the mandatory Standard Lease form to deposit rules, rent increases, and the clauses that actually belong in your agreement.

TL;DR

  • Use the government’s Standard Lease (Form 2229E). It has been mandatory for most Ontario residential tenancies since April 30, 2018.
  • Security deposits are illegal in Ontario. You may collect only a last month’s rent deposit (maximum one month’s rent) and a key deposit at actual replacement cost.
  • The 2026 rent increase guideline is 2.1% — the lowest in four years. Rent can only increase once every 12 months with 90 days’ written notice on Form N1.
  • Any lease clause that conflicts with the RTA is void — even if the tenant signed it.
  • Interest on the last month’s rent deposit is owed annually at the guideline rate (2.1% for 2026).

Table of Contents

Start with Ontario’s Standard Lease (Form 2229E)

Since April 30, 2018, most private residential tenancies in Ontario must use the province’s Standard Form of Lease — officially Form 2229E. This applies whether you are renting out a downtown Toronto condo, a Mississauga basement unit, or a single-family home. It does not apply retroactively to leases signed before that date, and it is not required for care homes, social and supportive housing, co-operative housing, mobile home parks, or land lease communities.

The Standard Lease fixes the core terms in uniform, plain-language wording: the parties, the unit, the term, the rent, deposits, utilities, and maintenance responsibilities. You cannot alter the mandatory body of the form. You may only fill in the blanks and add your own clauses in Section 15 (Additional Terms) — and any added term that takes away a right or responsibility under the RTA is void, no matter how clearly the tenant agreed to it.

The Standard Lease is free and available in multiple languages from the Ontario government website (ontario.ca). Download it directly rather than paying for a third-party template — the free government form is the one the law requires.

There is also a real penalty for skipping it. If you do not provide the Standard Lease, your tenant can demand one in writing. You then have 21 days to deliver it. If you still have not, the tenant may withhold one month’s rent — and if the lease still has not been provided 30 days after that, the tenant may keep it. That is an expensive consequence for using the wrong form.

Ontario deposit rules: what you can and cannot collect

This is where the most landlords get tripped up. Under the RTA, Ontario landlords may collect exactly two things at lease signing — no more:

  1. First month’s rent (the regular rent payment).
  2. A last month’s rent deposit equal to at most one month’s rent (or one rental period).

That is it. Security deposits, damage deposits, pet deposits, cleaning deposits, and move-in deposits are all illegal in Ontario — regardless of what you call them on the lease or the application form (RTA s. 134). You also cannot demand several months of rent upfront “for security.” Collecting an illegal deposit exposes you to a repayment order from the Landlord and Tenant Board (LTB), and the tenant can apply to recover it through a T1 application at any point during the tenancy.

The one small exception is a key or fob deposit, which is legal only when capped at the actual replacement cost of the device. A $300 “key deposit” on a $30 fob is not permitted. Put the amount in writing at move-in, and return it when the key is returned.

Three more rules about the last month’s rent deposit that landlords often miss:

  • It cannot be used for damage. The deposit covers the final month’s rent — nothing else. You cannot deduct repair or cleaning costs from it at move-out without the tenant’s written consent. Damage claims go through the LTB separately.
  • It earns interest. You owe the tenant interest on the deposit every year at the province’s rent increase guideline rate. For 2026 that rate is 2.1%, and it is owed on or before each anniversary of the tenancy. If you do not pay it, the tenant may deduct it from their rent.
  • It cannot exceed one month’s rent. Any amount above one month’s rent is an illegal deposit and recoverable.

Setting the rent: the 2026 guideline and notice rules

The rent amount you write into the lease should reflect the current market — the guideline does not cap what you can charge a new tenant. It caps how much you can raise the rent for an existing tenant without LTB approval.

Ontario’s 2026 rent increase guideline is 2.1%, the lowest since 2021 and the first figure below the 2.5% statutory maximum since 2022. For a $2,000/month unit, that is a maximum increase of $42 per month. Three rules govern every increase:

  1. Once every 12 months. Rent can only be increased after at least 12 months have passed since the last increase or the start of the tenancy.
  2. 90 days’ written notice. You must use the LTB’s official Form N1 (Notice of Rent Increase). A text message or conversation does not count.
  3. No more than the guideline. Unless the LTB approves an above-guideline increase (AGI) for qualifying capital work or extraordinary costs, 2.1% is the ceiling for 2026.

One important carve-out: units first occupied for residential purposes on or after November 15, 2018 — most newer condos and purpose-built rentals — are exempt from the guideline percentage. You can raise rent by any amount on those units, but you must still give 90 days’ notice on the N1 and respect the 12-month rule. If you are unsure whether your unit is exempt, confirm before issuing any notice.

Key clauses every Ontario lease should include

Inside the Standard Lease form — in Section 15’s Additional Terms where appropriate — make sure these are covered clearly:

  • Parties: full legal names of all tenants and the landlord or property manager.
  • Property description: full address, unit number, and what is included — parking spot, locker, storage, appliances.
  • Lease term: start and end dates, and confirmation that the tenancy continues month-to-month after the fixed term expires (it does automatically under the RTA).
  • Rent details: monthly amount, due date, payment method, and whether rent is subject to the guideline.
  • Utilities and services: who pays for hydro, water, gas, internet, and hot water tank rental. Ambiguity here causes more disputes than almost any other clause.
  • Maintenance responsibilities: landlord’s RTA duty to maintain the unit in a good state of repair versus the tenant’s duty to keep the unit clean and avoid damage.
  • Smoking, cannabis, and pets: be explicit. Note that a blanket “no pets” clause is generally unenforceable in Ontario — a condo corporation’s declaration is a different matter.
  • Insurance: require the tenant to carry tenant liability insurance and provide proof annually.
  • Entry notice: the RTA requires at least 24 hours’ written notice to enter, except in emergencies.
  • Termination and notice periods: 60 days’ notice to end a monthly tenancy (N9), 14 days for non-payment (N4) — reference the correct LTB forms.

If your tenant came through a careful screening process — references, credit check, employment verification — your lease should document the occupants you approved. Read our guide on how to find good tenants for the screening steps that come before the lease.

Terms you cannot put in an Ontario lease

Many landlords do not realize that the RTA overrides anything you write. Any lease term that is inconsistent with the Act is void and unenforceable — the LTB will simply ignore it. Common examples landlords still try to include:

  • A security or damage deposit of any kind.
  • A waiver of the tenant’s right to a rent receipt or interest on the rent deposit.
  • Automatic rent deductions or penalties for late payment beyond what the Act allows.
  • A clause requiring the tenant to pay for professional carpet cleaning on move-out.
  • An enforceable blanket pet ban in a standard residential tenancy.
  • Requiring the tenant to pay the landlord’s legal costs in a dispute.

If your unit is in a condo, remember the condo corporation’s declaration and rules sit on top of the RTA. A lease should require the tenant to follow the condo’s rules — see our guide to Toronto condo board rules for how those restrictions work in practice.

Lease signing checklist for landlords

  1. Use the Ontario Standard Lease (Form 2229E) from ontario.ca — never a US template.
  2. Fill in every blank; leave no section with “TBD.”
  3. Add custom rules only in Section 15, and check each against the RTA.
  4. Collect first month’s rent plus a last month’s rent deposit of at most one month — nothing more.
  5. Document any key/fob deposit at its actual replacement cost.
  6. Have all tenants and the landlord sign; give the tenant a copy within 21 days.
  7. File the signed lease, the deposit receipt, and the move-in condition report together.

Getting the lease right is only the beginning — the day-to-day work of rent collection, maintenance coordination, and tenant communication is where most self-managing landlords lose time. If you would rather hand that off, see how our Toronto property management and Mississauga property management services handle it.

Frequently asked questions

Can an Ontario landlord charge a security deposit in 2026?

No. Under the Residential Tenancies Act (ss. 105–106, 134), Ontario landlords may not collect a security, damage, pet, or cleaning deposit. The only lawful deposit is last month’s rent, capped at one month’s rent, plus a key or fob deposit limited to the actual replacement cost. Tenants can recover any illegal deposit through a T1 application to the Landlord and Tenant Board.

What lease form must Ontario landlords use?

Ontario’s Standard Lease (government Form 2229E) is mandatory for most private residential tenancies with written agreements signed on or after April 30, 2018. You may only fill in the blanks and add terms in Section 15 — any added term that conflicts with the RTA is void.

What is the Ontario rent increase guideline for 2026?

The 2026 rent increase guideline is 2.1%, the lowest in four years. Landlords must give at least 90 days’ written notice on the LTB’s Form N1, and rent can only increase once every 12 months. Units first occupied on or after November 15, 2018 are exempt from the guideline percentage.

Do landlords owe interest on the last month’s rent deposit?

Yes. Interest is owed every year at the province’s rent increase guideline rate — 2.1% for 2026 — and must be paid on or before each anniversary of the tenancy. If the landlord does not pay it, the tenant may deduct the interest from their rent.

What happens if a landlord does not provide the Standard Lease?

The tenant can demand one in writing, and the landlord has 21 days to provide it. If the landlord still has not, the tenant may withhold one month’s rent — and if the lease has not been provided 30 days after that, the tenant may keep it.