Regarding a deposit for a rental property, which statement is TRUE?

The correct choice highlights that a landlord cannot demand a security deposit for a residential rental property. This is based on the regulations established under the Residential Tenancies Act in Ontario, which explicitly states that landlords are not allowed to require a security deposit for residential leases. Instead, landlords may require first and last month's rent, which is different from a security deposit intended to cover potential damages or unpaid rent.

Other options suggest practices that are not permissible under the act, such as requiring a deposit prior to tenant occupancy or demanding a specific amount of security from residential tenants. The distinction is significant as it protects tenants from having to provide additional funds beyond their initial rental payments. Additionally, while commercial leases may have different regulations and may allow security deposits, this does not apply to residential properties, reinforcing the rules that safeguard residential tenants.