Does Signing an Illegal Contract Make it Void?

[im2exquisite]

My husband and I signed a lease with our landlord from August 1 2016 to July 31 2017.

2 weeks before the end of our one year lease, the landlord informed us that there would be a 6% rent increase every 6 months effective August 1st 2017 (12% total).

He told us he would negotiate charging 6% if we paid the whole year off up front.

He left and returned later with a lease renewal, stating that all terms of the previous contract remained, but that the rent would be increased from $1300 to $1378. I was coerced into paying an additional 6 months of rent immediately to Julio to avoid an additional increase of rent in 6 months.

He told me he could legally do it. I only agreed to the rental increases because I was afraid, and didn’t have time to find another place on such short notice. I going on vacation at the end of the month, also didn’t know the law for myself.

A few days after paying that money I had mental breakdown and was in the hospital for 10 days.

He has never given me interest on my security deposits whatsoever.

When I asked my landlord to repay my overpayment for the 2017/2018 year, he kept a security deposit of $1378, and 1 additional month of rent for what he calls “collateral”.

What can I do about this?

Is it legal?
Am I responsible for what I don’t know or is he responsible to follow the law?
Is it true that an agreement to carry out an illegal act is a void agreement?
Can he keep more than my security deposit?
What steps should I take to rectify this situation?

What would be the remedy?

[SettlementOrgMod]

Hello,

Thank you for sharing your situation and question with us.

We can appreciate that you would be very concerned about this situation.

Regarding deposits and security deposits, you can find some information on the CLEO - Community Legal Education Ontario website in the Before you move in section.

Here is an excerpt,

Deposits and other charges


Your landlord can make you pay a security deposit before you move in. This deposit cannot be more than one month’s rent if you pay your rent by the month. This is often called a last month’s rent deposit or LMR. If you pay your rent by the week, the deposit cannot be more than one week’s rent.



Your landlord can use this deposit only as a rent payment for your last month or week. Your landlord cannot keep it or use it for any other reason, such as paying for damage or cleaning.

Your landlord can also ask you for a deposit for your keys or access card. But the amount cannot be more than it would cost to replace them. Your landlord must give this deposit back to you when you move out and return the keys or card.

Your landlord can also charge you a fee if you write a cheque and do not have enough money in your bank ccount. This is often called an NSF or bounced cheque.

Most other deposits, extra charges, or advance payments are illegal. For example, sometimes landlords say that if you want to get the apartment, you must buy something in it, such as curtains or appliances, or that you must pay a damage deposit, rental fee, or commission. This is illegal.

It is also illegal for a landlord to require post-dated cheques or other types of automatic rent payments.

Always get a receipt when you pay a rent deposit or any other charge.

If you have paid an illegal deposit or charge, you can apply to the Landlord and Tenant Board to get the money back. You must apply within one year or you may lose your right to get the money back.

It is best that you contact the nearest Community Legal Clinic for some advice and assistance with your situation.

Your Username indicates that you are in Windsor, if that is the case, you can find the nearest community legal clinic by using their search tool.

I hope this information is helpful. Please let us know if you have further questions and if there is any follow up to your question/situation.

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Anna
Settlement.Org Content and Information/Referral Specialist, CIRS
Settlement.Org