Security Deposits and trust accounts

[klewlis]

I`m curious as to how many landlords in Alberta actually comply with the legal requirements of security deposits and trust accounts.

I have never once received interest for a security deposit, and only just found out about it a few months ago. I have rented with both major and small-time landlords... they have never paid me interest or mentioned it at all. I am considering asking my current landlord (with whom I`ve been renting for just over two years) how much interest I`ve accrued, just to see what he says.

Thoughts? I don`t want to call anyone out but do some/most/all of you actually follow the rules? If not, why not? Are landlords pocketing the interest, or do they not bother to separate the security deposit money at all?

 

[brentdavies]

the RTA requires security deposits to be a trust account.

Not very practical for the small landlord with only 1 to 5 properties.

If the security deposit is placed in interest bearing gic or similar investment, you sort of complied with the act. ( That is what one auditor told me)


The interest earned on the gic is the owners`s interest.

The interest paid to tenants changes every year. For 2009 the rate is zero. For 2008 the rate is 1/2 of one percent interest. Go to www.servicealberta.gov.ab.ca for more detailed information including an interest calculator.

 

[CalvinPeters]

we keep deposits in a seperate account, more a pain in the butt than anything else. We once had to refund a tenants deposit who had moved out after being there for 17 years...it didnt work out to be much at all...maybe a couple hundred bucks. You wont get rich on the intrest you make off a landlord I am afraid!

 

[klewlis]

oh I wasn`t expecting to gain from it, lol. I was just curious... since it`s something that seems to be relatively unknown except by the landlords, who often don`t honor it anyway. So then why is the rule there, if tenants are unaware and landlords are non-compliant? Just one of those mysteries, I guess!

 

[Nir]

Hi Brent, the interest depends on the province then because in Ontario it is more than mentioned: since like couple years ago, the interest=rent increase allowed.

Klewlis, interesting question/point. some landlords pay it annually but the tenant is not always aware because since the interest=rent increase in some provinces since certain year, the first month of the new year cycle is the same as the previous month (and...surprise! the landlord just paid annual interest).

You are correct however, if you never got it most likely your money is in the wrong hands now. as someone mentioned $200 in 20 years is not the end of the world. I`ll buy you coffee (just joking)

Cheers,
Neil

 

[Thomas Beyer]

check the interest rate schedule for Alberta here: http://www.servicealberta.ca/1033.cfm

0 or close to 0 for the last few years .. but you can plug this into a spreadsheet and pay a 12 year long term tenant his $28.75 interest when he leaves !

The law is you must pay it. While legally required (I believe) I would not bother keeping it in a separate account for 1-5 tenants .. because no one checks it and it is a bother. Only for a commercial property manager is there a legally enforcable requirement to put it in a separate account (and you, the landlord can keep the $s over and above what you must pay the tenant)

 

[klewlis]

QUOTE (thomasbeyer2000 @ Jan 6 2009, 09:17 PM) check the interest rate schedule for Alberta here: http://www.servicealberta.ca/1033.cfm

0 or close to 0 for the last few years .. but you can plug this into a spreadsheet and pay a 12 year long term tenant his $28.75 interest when he leaves !

The law is you must pay it. While legally required (I believe) I would not bother keeping it in a separate account for 1-5 tenants .. because no one checks it and it is a bother. Only for a commercial property manager is there a legally enforcable requirement to put it in a separate account (and you, the landlord can keep the $s over and above what you must pay the tenant)

oh well I guess that`s one of the reasons I don`t want to be renting for much longer! Hopefully by owning I can earn more than $28.75 over 12 years!

I am very lucky in my current situation... my rent has not risen in the two years I`ve been here, and it is possibly one of the lowest rents in the city ($650/month for 2 bedrooms, laminate flooring, wood-burning fireplace, decent neighbourhood, and no pet deposit). So I`m happy to stay here awhile and sock away money for a down payment, and I definitely won`t quibble over my security deposit interest.