Home › Forums › General Discussion

Interest payment on a rental deposit

July 30, 2010 - 8:37am — danshestalo

Hello everyone! This is my first forum topic as a new member and as far as I have searched, there hasn't been a topic on this one. I could be wrong. Anyways, I purchased an income property in May of this year and one of the tenants has decided to move out. He has requested the interest on his rental deposit for every year that he has lived there. He moved into the unit in 1993. From what I have researched, the previous owner should have paid him the interest (6%) every 12 months from when he moved in. Apparently he didn't do that. Does this mean that I am on the hook for 17 years worth of interest? Any help would be appreciated. Thank you.

‹ Be a Guest at a REIN Training Camp for Multi-Family Investors Question on developing an existing property ›
August 3, 2010 - 1:54pm — Denise MacPherson

Hi Dan, At anytime you are

Hi Dan,
At anytime you are dealing with tenant matters, one should always check the (Ontario) Residential Tenancies Act or the Landlord and Tenant Board website . You will find a page on Calculating Interest on a Rent Deposit Example at http://www.ltb.gov.on.ca/en/About_Us/243751.html. You will note that the law specifies the interest to be paid if before Jan 31, 2007 (6%) and from January 31, 2007 onwards will be equal to the rent increase guideline (http://www.ontariotenants.ca/research/rent-increase.phtml). It is rather unfortunate if the deposit interest was not part of the closing adjustments when you purchased the property. For the future, you may wish to research 'tenant estoppel certificate', which can be very important when you take over a rental property.

Denise MacPherson
SDMAC Properties Inc.
sdmacproperties@gmail.com
C 613-724-6873
F 613-834-4124
888-834-7077

__________________

Denise MacPherson
SDMAC Properties Inc.
sdmacproperties@gmail.com
C 613-724-6873
F 613-834-4124
TF 888-834-7077

July 30, 2010 - 2:18pm — danshestalo

Yes that does. Thank you

Yes that does. Thank you very much.

July 30, 2010 - 11:41am — robert.corneau

Hi Dan, Firstly, I would have

Hi Dan,

Firstly, I would have thought that your Lawyer should have squared this up with the Vendor through the Statement of adjustments when you purchased the property.

If not, I don't believe the annual percentage is a straight 6% but rather the same as the annual rent increase guideline percentage for those respective years.

Check out the following link:
http://www.ltb.gov.on.ca/en/Key_Information/STEL02_1
11479.html

You will also find a table with the annual rent increase guideline percentages on the site.

Hope this helps!

__________________

Robert Corneau