Can a landlord keep a holding deposit?

It is money a would-be tenant pays to reserve a rental, usually before a lease is signed, while the landlord finishes checks or prepares the paperwork. No province covered here has a separate legal category for it, so how it is treated depends on the province's deposit rules and on whether a tenancy agreement has been made. Ask the landlord in writing what the money is for and when it comes back.

It depends on the province. In Alberta, refundable fees or deposits count as the security deposit whatever they are called, and in Nova Scotia any money taken before the lease is signed is a security deposit, so the return rules apply. In Ontario, money paid before move-in is a rent deposit that must be repaid if you do not get the unit, and PEI does not allow any deposit other than the one security deposit. In Newfoundland and Labrador, a holding deposit paid before any rental agreement is not regulated, so its refund depends on what you agreed.

PEI's Act allows no deposit other than the one security deposit, so a separate holding deposit is not allowed there. In British Columbia, Manitoba and Saskatchewan a security deposit can be required only when the tenancy agreement is made, and Manitoba also bars any payment from a prospective tenant its Act does not permit. Nova Scotia treats money taken before signing as a security deposit, Ontario treats it as a rent deposit, and Newfoundland and Labrador leaves holding deposits paid before an agreement unregulated. Alberta and New Brunswick have no rule that names them, so ask the tenancy office first.

If you have already made a tenancy agreement, the money is generally a security deposit (a rent deposit in Ontario), and changing your mind does not cancel the lease: the landlord can claim money you owe, such as lost rent, through the province's process. If you paid before any agreement was made, it depends on the province: in Nova Scotia the money is a security deposit, in Newfoundland and Labrador it falls outside the Act, and elsewhere ask your tenancy office. See do you get your deposit back when renting for how deposits come back.

In Ontario, a rent deposit must be repaid if the landlord does not give you the unit, and failing to repay it is an offence. In Nova Scotia the money is a security deposit, so the security deposit rules apply, and in PEI a holding deposit is not allowed in the first place. In Newfoundland and Labrador a holding deposit paid before any agreement is outside the Residential Tenancies Act, so a disagreement would have to be settled another way, such as in court. Elsewhere, ask the tenancy office.

In several provinces it does. In Alberta, refundable money counts toward the one-month security deposit cap, Nova Scotia counts it toward the half-month cap, and in Newfoundland and Labrador money above the rent counts toward the three-quarter-month cap once a rental agreement exists. In Ontario, money paid before move-in is the rent deposit, capped at one month's rent or one rent period, whichever is less. If a landlord takes more than the cap, British Columbia, Saskatchewan, PEI and Newfoundland and Labrador let the tenant deduct the overpayment from rent or recover it.

Not in British Columbia, Manitoba, Saskatchewan, Nova Scotia or PEI, which ban fees for taking, processing or screening a rental application, and Ontario bans fees and similar amounts from prospective tenants unless a regulation exempts them. Alberta's handbook says application fees are not against the law, but you do not have to apply to a landlord who charges one. New Brunswick and Newfoundland and Labrador have no rule that names application fees, so ask the tenancy office.

In Ontario, a landlord can take a last month's rent deposit on or before signing, capped at one month's rent or one rent period, whichever is less, and it can be used only as the rent for the last month or week before you move out. New Brunswick does not allow a prepayment of last month's rent: a landlord can ask for the first month's rent and a security deposit only. In other provinces, ask the tenancy office before paying more than the first month's rent and a security deposit.

No. A request for money to hold a unit you have not seen, from someone who cannot show they own or manage it, is a classic warning sign of a rental scam. See the place, confirm who the landlord is and get a written receipt before you pay anything. Our guide on how to spot rental scams covers the other warning signs.

At least the amount, the date you paid, the unit, what the money is for, and whether and when it will be refunded. Manitoba requires a security deposit receipt to show the amount, the date it was received and the rental unit, and PEI and Newfoundland and Labrador also require a written receipt for a security deposit. Keep a copy along with any messages about the deposit.

We found no cap aimed at a holding deposit itself in most provinces, so the security deposit cap is the number to measure against, and how a holding payment is treated differs. In Nova Scotia money taken before the lease is signed is treated as a security deposit, in Ontario money paid before move-in is a rent deposit, and in PEI the Act bars any deposit other than the one security deposit. In Alberta, British Columbia, Manitoba, Saskatchewan and New Brunswick we found no holding deposit rule, so applying the security deposit cap is SQRFT's reading, not a stated rule. The security deposit cap is one month's rent in Alberta and Saskatchewan, half of one month's rent in British Columbia, Manitoba and Nova Scotia, one month's rent in New Brunswick (one week's rent for a week-to-week tenancy), and one month's rent in PEI (one week's rent if rent is paid weekly), with only one deposit allowed there. In Ontario a rent deposit can be no more than the lesser of one rent period or one month's rent. Newfoundland and Labrador caps a security deposit at 3/4 of the first month's rent (2 weeks' rent for a week-to-week tenancy), but the government guide says a holding deposit paid before any rental agreement exists is not regulated by the Act, so we found no cap on it there. SQRFT advice: keep the amount modest, get a written receipt that says what it is for and when it is refundable, and ask your tenancy office if the amount seems higher than your province allows.

Not from the same tenant in several provinces. PEI bars a landlord from requiring or accepting more than one security deposit for a tenancy agreement and from accepting any other deposit, and Saskatchewan allows only one security deposit per tenancy agreement. In Alberta, refundable fees and deposits count toward the security deposit, and in Nova Scotia and Newfoundland and Labrador money or value taken on top of rent is treated as a security deposit, so the combined total cannot go over the cap. We found no rule on a landlord collecting holding deposits from several applicants for the same unit. SQRFT advice: ask whether anyone else has paid, and get in writing that your money comes back if another applicant is chosen.