calculating last month`s deposit interest in Ontario

[DavidHamilton]

I think I know the answer to this, but just want to confirm.



I rented a home last March and collected last month's rent.

At the end of this month, it will be one year and interest is payable on the last month's rent.

According to the Ontario Residential Tenancies Act, the interest payable is equal to the rent increase guideline that is in effect when the interest is payable.



So in this case, the rent increase for Jan 2011 to Dec 2011 is 0.7%

I just want to confirm that the interest payable is the 0.7% even though the last month's rent was collected last year when the guideline was 2.1%

Thank you

 

[invst4profit]

That is correct.

However you should be telling your tenant that you are adding it to the LMR rather than actually paying them the interest assuming you apply the annual rent increase to your tenants rent every year. If you do not increase your tenants rent every year by the allowable amount you are required to pay the interest to the tenants.



In addition to the fact that the annual allowable increase does not come close to covering CELLs increased costs this is another good reason to apply the increases to tenants rent every year without fail. No out of pocket interest payments to tenants as you don't actually top up the LMR you just apply what ever amount the LMR is to there last month when that day comes..