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LegalCalc Ontario
Guide

Daily compensation after termination of a tenancy

Where daily compensation under the Residential Tenancies Act comes from, when it starts, and how it differs from rent.

Published 19 July 2026 · Last reviewed 19 July 2026 · Reviewed for general legal information.

Scope of this guide
Daily compensation only applies where the Residential Tenancies Act, 2006 permits it - typically after a valid termination notice, order, or overholding tenancy. Entitlement is fact-specific and depends on the notice served, whether the tenancy is month-to-month or fixed-term, and other circumstances.

Compensation is not rent

Once a tenancy is terminated but the tenant remains in possession, the landlord's claim shifts from rent to compensation. The two are legally distinct: rent is owed under the tenancy agreement while it subsists; compensation is owed under the Residential Tenancies Act, 2006 for the tenant's continued use of the unit after termination.

When compensation starts

Compensation starts the day after the termination date on a valid notice, order, or agreement. It cannot overlap with a period the landlord is also charging as rent. A rent arrears ledger that includes both rent and compensation for the same day double-counts.

Calculating the daily rate

The usual approach is monthly rent × 12 ÷ 365. Some ledgers use month-length denominators (for example, dividing by the number of days in the specific month). The LTB's practice on any given file is the safer benchmark; where the correct approach is uncertain, presenting both computations lets the adjudicator choose.

When compensation stops

Compensation ends when the tenant delivers vacant possession, the landlord recovers possession under a sheriff's enforcement, or the tenancy is otherwise regularised. Continued charges after that date are not compensation under the Act.

Practical points for landlords and tenants

A landlord should log the exact date the tenant vacated and keep contemporaneous evidence. A tenant who returns keys on a particular date should ask for a signed acknowledgment. Both sides should keep a copy of the notice, the order, and any move-out communication for the LTB file.

Worked example

Facts. A month-to-month tenancy at $2,400 per month is terminated effective 31 March 2026. The tenant remains in the unit until 20 April 2026.

Daily rate. $2,400 × 12 ÷ 365 = $78.90 per day.

Compensation period. 1 April 2026 to 20 April 2026 = 20 days.

Amount. 20 × $78.90 = $1,578.08. This is charged in a separate ledger row from any rent already charged through 31 March 2026.

Official sources

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