interest on last months rent ontariointerest on last months rent ontario

In the early years of your tenancy this isn't even close to accurate. Rental Rules: Ontario Rent Deposit Law | AMR Property Management Under the LTB math, a tenant who enters into a 12 month fixed term lease, pays a deposit, and gives notice to terminate at the end of that fixed term would get zero interest as the deposit is applied to the 12th month and hence the deposit was not held long enough to draw interest. IMPORTANT NOTICEAny answers provided are intended to reflect the Law of Ontario, Canada. These are the annual percentages for the last 8 years. How much is the current deposit? The LTB, arguably, puts forward a position between my position and the commenter's position--but that is a staff proposition and not caselaw or anything authoritative. At least 12 months must have passed since the first day of the tenancy or the last rent increase. Hi Michael,Thanks for all your help!I took residency at my former apartment Sept 1 2018 and paid $875 + $1750 for the last 2 months rent. This is the form you will use to apply for a rebate or return of an illegal rent. Residential rent increases | ontario.ca Annualized the interest is $19.80 and for 8 months it is $13.20. This is the first I've heard of it as we are giving our 60 day notice shortly as we just purchased a house. Illegal deposits, in my view, should not be treated as equivalent to a lawful LMR. The idea being that the interest rate remains reasonable relative to interest rates generally. For residential landlord / tenant issues, please visit the Landlord and Tenant Board's website or phone (416) 645-8080 or 1-888-332-3234 (toll-free). With proper written 90 days' notice to the tenant, the landlord could increase the rent 12 months later, on June 1, 2020. The logic of your question/comment is a good one though. #1 I think I know the answer to this, but just want to confirm. The increase that is permitted is set out in section 120 which establishes the "guideline". Hi Sanjay:In 2019 the interest rate is 1.8% If your deposit is $1000 then you are entitled to $18.00 in interest. As the amount deducted from the interest payable is added to the deposit the character of that money is changed from "interest" to "deposit" and hence interest is payable on the interest in a way that seems similar to compounding interest.This seems a tad too complex for what it is (and the amounts involved) but the whole issue with interest is complicated because of all the sub-sections dealing with it in section 106 RTA. You don't pay a years worth of interest if the deposit was held for less than 12 months, you only pay for the months the deposit was held. He is a landlord and only fixes something when it has actually gotten to the point of no return, like faucets that burst even when we have asked him to do some maintenance on them to avoid such a situation. In the calendar year of 2017 the interest rate is 1.5% At the end of 12 months you would be owed a further $15 interest for the full year of 2017 or $1.25 per month. And no I did not receive any I interest on my LMR and was not asked to top up my LMR with the rate increase. If the landlord does not pay the interest owed on the last month's rental deposit to the tenant when it is due, the tenant can deduct the interest from a future rent payment or file an application for a rebate with the Landlord and Tenant Board. Why not tell the landlord? This part of the RTA operates on what it allows/permits as opposed to what it prohibits with respect to the amount of the increase. When the landlord does not pay the interest annually the amount owed is not compounded and interest does NOT run on the interest. Or does this amount (interest) get transferred to the new Owners? However, before jumping to conclusions, ask the landlord to provide a copy of your rent ledger. The amount of the increase is a percentage amount known as the guideline amount. I imagine you will do that by simply taking the top up from the interest that you're owed.The "maintenance" is laughable--presuming you've treated the way your question suggests. Ontario Landlord and Tenant Act; questions and answers Up to the end of January 2007, the interest paid to tenants on their deposits was fixed at the statutory amount of 6%. He says forget the wear and tear there are always repairs to be done. Rental Payments and Deposits | CMHC The landlord must pay the tenant interest on the rent deposit every year. Hi: There isn't a particular way to challenge the N1 after being served with it. The key part of that section states that the amount from the interest payable that is deducted from the payable amount and added to the deposit is "deemed to form part of the rent deposit paid by the tenant". The interest can only be added to the deposit if the monthly rent is lawfully increased (in which case the interest equals the increase and no money changes hands).Your landlord is further mistaken when he says LMR deposits are applied to damages. Hi Michael! The percentage is equal to the annual guideline increase amount. Accordingly, if you are calculating a multi-year amount of last month rent interest you calculate each year separately and then add all those amounts together. There is no value in leaving this amount as a credit to you as the interest is not compounded and it is just credit that isn't earning anything. For the commenter, the trigger for payment is holding the deposit for 12 months. Section 106 (6) RTA is the section that imposes the requirement to pay interest and it is the section that sets the rate. I was thinking2019: $3,300 x 1.8% /12 months = $4.95 x 8 months = $39.62020: $3,300 x 2.2% /12 months = $6.05 x 2 months (Jan, Feb 3rd last month)$2,200 x 2.2%/12 months = $4.03 x 1 month (March, 2nd last month)$1,100 x 2.2%/12 months = $2.02 x 1 month (April, last month)Final interest owed on deposit being $57.75Please correct me if I'm wrong, I am terrible with math!Thank you,Rinne, Hi Rinne:The applicable percentages are 1.8% for the year 2019 and 2.2% for the year 2020. A question that I get from time to time is how to calculate the interest owing on a last months rent deposit. Consider as well whether the amount of the increase is enough to make this worth your while if you are asking for only 2 months of illegal rent that is 1.85% above the presumed lawful amount.Best of luckMichael K. E. Thielewww.ottawalawyers.com. Hi: Thanks for this question as it makes one do some mental gymnastics. Scroll up through the comments on this article and you can see references to interest rates---I believe it was 6% up to 2007 (though I've noticed a typo in one of my answers indicating 2017). Your self interest dictates that you say nothing for as long as possible because until a proper Notice of Rent Increase is served your rent stays the same. As the rent increase (for most rental units now) is the exact same as the interest that is payable on the deposit, it is often the case that the interest payable is just added to the deposit and therefore nothing is owing to the tenant BUT at the same time the deposit is increased to the current rent amount. You must have their consent to do this. Nothing in this blog, comments submitted or answers provided, gives rise to a solicitor and client relationship. The landlord could then serve you with a Notice of Termination for Non-Payment of rent. Those units may have had the rent increased by more than the interest payable on the deposit. The purchaser wants to know the extent of the LMR deposit liability. If you paid the deposit in a later month (i.e. Hi: At the present time your rent is not lawful. We now pay $1035. This is most evident from the old version. I saw you tried a second comment (at least I think it was you), I will try to find that and see if it publishes as a separate comment that I can respond to. What can I do or what form do I file to claim my money back?Thank you, Hi Janice: Take a look at the Ontario Landlord and Tenant Board website and under the Forms section take a look at form T1. Rent increases, Residential Tenancies Act, Ontario, Part VII tezoatlipoca 2 yr. ago So. Here are the two versions of section 106 (old & new):(6) A landlord of a rental unit shall pay interest to the tenant annually on the amount of the rent deposit at the rate of 6 per cent per year (OLD)Interest(6) A landlord of a rental unit shall pay interest to the tenant annually on the amount of the rent deposit at a rate equal to the guideline determined under section 120 that is in effect at the time payment becomes due (CURRENT). I come up with about 111.49 of interest. (If your rent increases, the landlord will adjust the "last months rent", deducting it from your interest cheque, to even things out). All other tenants have the possibility of their last month's rent deposit being kept level to the actual monthly rent by applying the interest to the deposit held. However, the landlord also owes you interest on $1350 for the amount of time he/she held it. They have increased our rent each year to the maximum they are allowed without getting approval by the board. The longer it takes for the landlord to figure out the rent increase was invalid the longer it will take for them to serve you with a proper and valid N1. The increase is actually calculated as an annual rate on an annual amount of rent that is paid to the landlord. I was, until recently, unaware that tenants could claim interest on their LMR deposit. On that basis, I'd argue that you are indeed holding the deposit--it's just that you're holding it in the tenant's account.Thanks for the question.Michael K. E. Thielewww.ottawalawyers.com. In those situations, the rent interest may be insufficient to cover the shortfall between the deposit and the lawful rent. Thanks for such a great resource! You then calculate the interest for a partial future year from January to date of termination. Renting commercial property in Ontario | ontario.ca Therefore, your annual interest can be applied to the LMR deposit to keep the LMR deposit equal to the lawful rent. Ontario landlords are shocked at the announcement by the Minister of Housingthat in 2021 there will be a "rent freeze" and small landlords will not be able to raise the rent at all! Shouldn't you be able to claim interest at the higher rate? Thanks for providing this information. The rent increases that he "doesn't take" don't cancel out the interest that he has to pay. If the interest was paid after month 12 what happens to interest that was theoretically accruing in months 13 to 17? If you are looking for this confirmation as an affirmative statement in the statute then I think you will be disappointed. If the interest exceeds the shortfall then you are owed some money. You could contact the landlord and advise them of the mistake--but that is up to you. If this is how it went then the rent amount is currently unlawful and you might want to consider bringing an application to get the illegal rent back. The question then is whether the interest from 2010 was added to the LMR deposit (arguably it couldn't be as the deposit would then exceed the lawful rent). The reason for this is that the last months rent deposit was applied to the last month of the tenancymeaning the landlord became entitled to the money on November 1, 2018, and therefore it was no longer a deposit as of that date. Ontario's Commercial Tenancies Act (the Act) outlines the relationship, rights and obligations between commercial landlords and tenants. Hello. When you gave notice to terminate did you apply the $1750 to November and December or did you pay rent all the way to the end of the tenancy with the deposit never being used? As per LTB, interest is paid at the rate outstanding at the time the interest payment is due. There is no need to wait to the end of the tenancy. Interest on Last Month's Rent Deposit (calculation, issues and rulings) Summary: How is interest on Last Month's Rent (LMR) deposit calculated? Canada Savings Bonds were becoming a joke, savings account interest rates were zero or getting there. It had been this amount since the separate regulation of residential tenancies in the 1970's. The interest percentage is an annualized amount--as in X% for the year. Also, I had paid security deposit for keys when i first moved in, would that be part of amount that can accumulate interst as well? Surprisingly, now is a fantastic time for you (as a tenant) to file an LTB application. If I request a record of our rent increases, is my landlord obligated to give me that information? This does not mean that the deposit needs to be held for 12 months. The answers may not be legally accurate and may indeed be contrary to the law of Ontario. My rent is $1,100 and I was asked to pay first and last 3 months upfront (cheque given for $4,400). served an N9 60 days before end of term), the LMR would be applied to month 12, meaning no deposit would be held for 12 months--and on the commenter's math no interest would be payable. I currently pay $3200 and the N1 says $3500 + 1.8% increase. Pet Deposits After 2007, you will be entitled to varying amounts based on the annual guideline.Your landlord is mistaken in a few other ways. If the "interest" of $139.73 equals the shortfall in the lawful rent owing (current rent minus deposit) then you owe nothing. Further, your landlord has not increased rent by the lawful amount on an annual basis therefore the interest exceeds the shortfall between the amount on deposit($1250) and the current lawful monthly rent($1295). You need to do the interest calculation for the year (or partial year) in which the deposit is held. When the landlord does this, the landlord may also require the tenant to increase the rent deposit to the legal amount of the current rent. I already gave them the notice to end tenancy and wanted to figure the amount of interest I should be expecting. From my recollection, the notion of accumulating annual percentages ended with the introduction of rent de-control in the Tenant Protection Act--when landlords were permitted to set the rent to any amount between tenancies.Michael K. E. Thielewww.ottawalawyers.com. As for the year 2021 where there was no rental increase, does the rental deposit really earn no interest for this year? No other calendarization is required. Michael K. E. Thielewww.ottawalawyers.com. For 2017 our landlord didn't increase the rent. Any wear and tear after 23 years is a complete write-off for which it is highly unlikely that you could ever be liable. Further, did the landlord ever pay you interest on your deposit?Sorry, for all of these questions but without the answers to them it isn't really possible to know whether you were shortchanged or not.Michael K. E. Thielewww.ottawalawyers.com. As a landlord: Do I have to pay interest on last months rent He did not provide me any written notice about the increase. i moved into my current apartment in 2000 and have been there for 20 years. Or landlord will have to pay interest for the 11 months that the deposit was held? Where is your property located? You should be aware that there is a $50 filing fee and if you lose you will not get that money back. LMR was 1250. Which amount also happens to be 2.2% of $1000.00---which to the mathematically challenged (i.e. I will be moving out at the very end of Dec 2019 this year. How do I refute this amount? Commercial Tenancies in Ontario - AllOntario You would therefore be in arrears for April 2020 but you are then carrying an LMR to your credit.As for the extra two months of deposit applied to February and March 2020. If your rent had been lawfully increased for 2018 and 2019 I calculate the total lawful rent to be $1865.38 which is 1.8% for each of 2018 and 2019.Your agreement to pay does not make the rent lawful and given the threat to sell the house if you didn't agree would in any event void your coerced agreement even if it were possible. Hi: Commercial versus Residential is like apples versus oranges. In my view, you pro-rate the calculation of interest for the calendar year at 1.2% in 2022. The triggering obligation to pay interest is the requiring to pay a deposit, which if paid (whether the cheque is cashed or not), is on the wording of the section (I think) enough to impose an "interest" obligation.Beyond that, if I had to pick a side to argue (presuming I would want to "win") I think the argument requiring interest to be paid is the easier argument to win. The calculation is as follows, on the assumption that you paid the Last Month Rent deposit on October 1 2017.2017: $1200 x 1.5% = $18.00 $18 /12months = $1.50 per month x 3 months=$4.502018: $1200 x 1.8% =$21.602019: $1200 x 1.8% =21.60 /12 months =$1.80 x 10 months =$18.00Total interest owed is $44.10.The percentage for 2017 was 1.5% and for 2018 & 2019 it is 1.8%. 1.5% For 2021, rental rates for existing tenants will not increase on September 1, 2021. At the end of this month, it will be one year and interest is payable on the last month's rent. The answers are intended to be general information about Ontario Law and are the personal view of the author based on the limited facts provided to the author. That does not make sense to me. For an illegal deposit (if it is) why would you presume to limit the interest rate to the AGI amount? What needs to be clear is what is the amount of your last month's rent (LMR) deposit? If you are incorrect you will be ordered to pay the rent arrears plus the application fee ($175 likely). If you fail to pay the interest then section 106(9) permits the tenant to deduct the interest owing to the tenant from subsequent rent that is due. If your deposit is $500 you are entitled to $9.00. Then figure out how many days there were between the date you paid the landlord the LMR and December 31, 2010. I base this view on section 106(6) Residential Tenancies Act (RTA) which provides: A landlord of a rental unit shall pay interest to the tenant annually on the amount of the rent deposit at a rate equal to the guideline determined under section 120 that is in effect at the time the payment becomes due." Explain to the adjudicator why the N1 is invalid. You can get the annual guideline amounts just by Googling it or looking on the landlord and tenant board website under the FAQ section there is a chart with the historical annual guideline increase amounts.Michael K. E. Thielewww.ottawalawyers.com. Ontario's 2022 Rent Increase Guideline | Ontario Newsroom Thank you for your time -=Scott=-, HI Scott: As the joke goes for many lawyers--I went to law school to avoid math! My rent went from $1950/month in 2021 May to $2100/month in 2022 May, which is way more than 1.2%.Will I be calculating the interest rate based on the 1.2% or based on the percentage of rent rate increased? That being said, I don't see how the landlord could recover the rent that was lost through the tenant's deduction of the interest from rent owing.It should be noted that for the most part, notwithstanding the complicated section on LMR interest, the amounts are nominal and there isn't exactly a lot of litigation on the issue.Michael K. E. Thielewww.ottawalawyers.com. [Interest amounts I calculated are as follows: 2014(five months) $5.33, 2015 $25.60, 2016 $32.00, 2017 $24.00, 2018 $28.80, 2019 (10 months)$24.00. Canada's inflation reaches lowest rate since June 2021 | CTV News Regardless though the interest is dealt with on an annual basis.It sounds like the interest in your situation has not been dealt with annually. I have had a great tenant since October 1st 2018 who paid his first and last months rent as asked. For example, if you plan to end your lease on November 30, you must give your landlord written notice no later than October 31. Mortgage holders to get 12-month grace period before repossessions amid In a "month-to-month" tenancy, either the tenant or the landlord must give written notice at least one-month in advance. The 12 months interest is calculated using the guideline rate in effect when the interest payment is due. I gave my landlord 625dollars 12 years.have never received any kind of interest.Am moving.out end of June.How much would he owe me. Do I have to pay a deposit when I rent a new place? The answers are not legal advice and no one should rely on the answers provided as legal advice. What happens? Presumably (but not necessarily), the LMR is equal to the amount of your rent. If you owe the landlord money, the normal practice is that they will apply your interest amount toward your outstanding debt. Ultimately, there will be a year where you do not pay interest for the deposit that is held for 11 months (or less) and the LMR is applied within the notice period given. That is the interest owing for 2012. Ultimately, when you terminate your tenancy you do not calculate interest for the month to which the deposit is eventually supplied. The interest can be added to the deposit to make the deposit equal the lawful rent--but otherwise it has to be paid to the tenant.Note of course, you do owe the landlord the lawful rent for the last month of your tenancy. Comments that have been published may be deleted upon request to the author.The content of this article and any responses to comments are intended to provide a general guide to the subject matter. You are also entitled to a refund of your Last Month's Rent deposit if it was not used for the last month plus interest.Michael K. E. Thielewww.ottawalawyers.com. You are owed about $64.58. It has, but not in the way he was thinking.I stand by my calculation method--I think it is correct. Because of this, I think that the lease clause giving 6% would be void as being inconsistent with the RTA---section 4 RTA makes clauses that are inconsistent with the RTA void.Michael K. E. Thielewww.ottawalawyers.com. The interest owed must take into account the fact that the deposit was not held by the landlord for the entire year. First of all, glad to enjoy this beautiful province. The interest is payable on the LMR and not the rent that you paid. Ontario. We've created a simple calculator to help you calculate interest owed on rent deposits. Has your rent ever adjusted (one month a little less) to account for the credit? ).If it simply appears that you have paid increases to top up the LMR and have never been paid interest then you can ask for that amount immediately. Thank you for this post.I'm a multi-year tenant, and the owner (i.e., landlord) has never increased the rental amount. You will owe the lawful rent due for the last month of your tenancy (i.e. You do the math then (when the tenancy terminates) because it is convenient to do so. You mention that you are actually taking the step of topping up the LMR with interest earned which I presume means that you are also serving an N1 (Notice of Rent Increase) to increase the rent by the Guideline amount (section 120). (examples) Offsetting interest against the 'top-up' of LMR deposit Is interest due on any other deposits or funds? After the rise of the base . Landlords may only raise rent if they give tenants at least 90 days' written notice using the correct form. HI: In order to figure this out you will have to advise how the tenancy ended. A December 18 move out date is unusual though technically possible as a tenancy does not have to run on the calendar month. I'm not aware of any cases directly on point and certainly the Residential Tenancies Act doesn't have a section dealing with this particular circumstance though one could read section 106 as requiring interest to be paid--even if the deposit cheque isn't cashed--because the landlord required the deposit to be paid. The Guideline Interest amount is the amount that a landlord may increase the rent by every year. Hence, if you paid a deposit in February 2021 onwards, you would get the interest percentage in 2022. You could tell them then why you are not paying or don't tell them. However, times change, and with interest rates pushing up and it being relatively easy to get more than 2.5% in a high interest savings account landlords can now actually earn on the deposit in excess of what they have to pay on the deposit. Have a email or something in writing explaining the shortfall in December, just so you have a record in case the Landlord comes at you with an N4 (Termination for Non-Payment of Rent) in the future for the interest difference.On the issue of principle---one of two things should happen 1) they pay you the interest annually, or 2) they credit your LMR and show it as increased on a document or on your ledger. Some landlord's use an accounting system that automatically credits the tenant ledger (annually) for the LMR interest. This means that the interest will have exceeded the lawful amount of any rent increase (meaning you're owed). In 2007, the amount of 6% was deemed outrageously high relative to current rates and the legislation was changed--in the new Residential Tenancies Act. Hello,I am looking for a legal source of information that states whether a landlord can or cannot accumulate a rent increase if a rent increase under the guideline were not taken in previous years. If you have been paying the additional amount to increase your LMR deposit but are not getting paid the LMR interest then you are owed money. When calculating the interest owed, would I carry forward the interest with the rent charged similar to compounding interest? me) does make it seem like the 2.2% is monthly interest--which it isn't.For the LMR deposit (Last Month's Rent), you are getting 2.2% annually on the amount held annually. I started renting Sept 1st 2006 with $650+$650 to cover first and last month at the time and haven't been paid any interest over the years. On a monthly basis you are earning $1.83 ($1000 x 2.2% /12).If you want to read about the rent increase, the requirement to pay, and the manner in which the amount is calculated take a look at section 106 RTA and section 120 RTA.All the above being said, I sincerely invite the mathematically inclined to post a comment that perhaps explains this more clearly!Michael Thielewww.ottawalawyers.com. My landlord,Sold the apartment where 8 live for 19 years, the new owner want us to vacate the apt..So my landlord gave us 60 days notice.. i found a new apt and I moved out 2 weeks early before the deadline, Am I supposed to get a refund? If there is no fencing then the landlord is not required to put up a fence as part of his obligations under the RTA. [Ontario] Interest on Last Months Rent? : r/PersonalFinanceCanada - Reddit It is a matter for negotiations but if the landlord doesn't want to then he doesn't have to. Bring your N1 and your legal argument to the hearing. Yes, getting to stay is a bonus given the cost of moving but this does not over-ride the obligation to simply pay what is owing on the LMR deposit.Good luckMichael K. E. Thielewww.ottawalawyers.com, hi there, I paid my first + last month rent on Aug 2014 for $1600 per month (i.e last month rent deposit for that 1 year contract was $1600) then my landlord increased my rent almost every year according to the Guideline Interest, but he never asked me to put the extra increased rental amount to the last month's rent deposit.