Interest on last month deposit

[holymoly]

Though only a few bucks are at stake, I`m wondering what the proper procedure is....

On the Landlord Tenant Board website, it says "The landlord must pay the tenant interest on the rent deposit every year." If the tenant stays for less than a year, do you give them a prorated portion of the 1.8% (in Ontario) interest they`d earn over the course of a full year -- eg half of a full year`s interest for a 6-month stay -- or do you only give them interest after a full year?

Thanks.

 

[Nir]

Yes, you give them half of a full year`s interest for a 6-month stay. "by the book" you should calculate it based on the number of days.
I`m not a lawyer just using common sense - the fact that I received interest based on the number of days when purchasing the property tells me i have to give it back to the tenant when they leave, meaning it should be calculated by the day.

I have another question on the same topic: if the previous owner did not pay interest on last month rent to the tenants annually, do you, as a buyer, continue keeping the money or just pay it all to the tenant the next opportunity you have (i.e. during the next rent increase within 1 year from purchase), based on the tenancy act?

Thanks.

 

[GaryMcGowan]

QUOTE (investmart @ Apr 27 2009, 10:42 PM) I have another question on the same topic: if the previous owner did not pay interest on last month rent to the tenants annually, do you, as a buyer, continue keeping the money or just pay it all to the tenant the next opportunity you have (i.e. during the next rent increase within 1 year from purchase), based on the tenancy act?

Thanks.

However we took ownership of three properties where the previous owner did not pay any interest the Tenants. So we decided to pay what was owed to them. It was a great welcome the new management style and new owners. We where able to gain allot of respect in one afternoon...

 

[Nir]

Totally agree with you Gary! I did the same but now i feel better about it

 

[vandriani]

I`m not sure about other provinces, but if you look on the BC Gov`t tenancy website, there WAS a caculator provided for you. I have not looked at for couple of years but it made my life easier.

 

[Fortuneinvesting]

Here`e the calculator for Alberta:
http://www.servicealberta.gov.ab.ca/978.cfm
And here is the table of interest rates, For this year (jan 1 09 - dec 1 09) 0% is required.
http://www.servicealberta.gov.ab.ca/1033.cfm

 

[holymoly]

Thank you for your replies!

 

[trev]

QUOTE (GaryMcGowan @ Apr 28 2009, 12:00 AM) However we took ownership of three properties where the previous owner did not pay any interest the Tenants. So we decided to pay what was owed to them. It was a great welcome the new management style and new owners. We where able to gain allot of respect in one afternoon...


Might want to have a talk with your lawyer.
It`s his job to get signed confirmations from the tenants and the seller pays by way of the adjustments.
This could even be done after the fact.
That is why they have you sign a form to do with re-adjusting.