Interest on Last Month's Rent

[sunstation2004]

Hey All!

I recently read online that landlords owe their tenants interest on their last month’s rent every year. Is this true?

My friend’s landlord has not paid her interest and has now asked her to pay the difference between her initial payment and her rent currently. Is this okay? Or is her landlord scamming her?

I had never heard about any of this and I just want to look out for her.

Thanks!

[SettlementOrgMod]

@sunstation2004

Hey All!

I recently read online that landlords owe their tenants interest on their last month’s rent every year. Is this true?

My friend’s landlord has not paid her interest and has now asked her to pay the difference between her initial payment and her rent currently. Is this okay? Or is her landlord scamming her?

I had never heard about any of this and I just want to look out for her.

Thanks!

Hi there,

Thank you for sharing your question and situation with us.

You may find helpful information in this StepstoJustice article on getting your deposit back:

How to get your deposit backThe easiest way to get your rent deposit back is to use it to pay for the last rent period before you move out.
You can tell your landlord to use your deposit, plus any interest your landlord owes you, for that final rent payment. If it’s not enough, you can pay the difference.
To get your key deposit back, ask for it when you hand in all your keys and entry devices to your landlord.

Make sure that you get something in writing from your landlord confirming you gave back all the keys. You’ll want this proof if your landlord refuses to return your key deposit.

According to StepstoJustice, Do I have to pay a deposit when I rent a new place?

Interest on depositsEach year, the landlord must pay you interest on your deposits. Interest is extra money to make up for the fact that you can’t use your money because the landlord is holding it as a deposit.
The interest rate is equal to the guideline rent increase for the year in which the interest payment is due. For example, if you paid a last months’ rent deposit on August 1, 2016, the landlord must have paid you interest on August 1, 2017. The rent guideline for 2017 was 1.5%, so the landlord owed you 1.5% interest on your deposit. A year after that, the landlord must have paid you 1.8% interest, because the rent guideline for 2018 was 1.8%.

Your landlord pays the interest by giving it to you or by adding it to your deposit. If they do not do this, you can deduct it from your next rent payment or apply to the Landlord and Tenant Board (LTB) to make them pay it.

You and your friend may want to contact the Landlord and Tenant Board for general information about landlord and tenant issues at 1(888)332-3234. You may also want to contact the nearest Community Legal Clinic for some advice regarding your situation. You can find the nearest one by using this tool here. Steps to Justice also has a compiled list of programs and services in housing law that may be helpful.

If you have any additional questions, please feel free to post them here.

We hope this information is helpful.

Sincerely,

Your Settlement.Org team

[Shay]

I moved into where I’m living on January of this year… I paid 1st and last months rent… she increased the rent July 1st and want the amount she increased the rent for last months… can she do this

[SettlementOrgMod]

Hello There,

Thank you for sharing your situation and question with us.

According to the Steps to Justice guide to rent increases, the 2024 rent increase guideline is 2.5%. This means that the maximum percentage your landlord can increase your rent by in 2024 is 2.5%. For the year 2023, the guideline amount was 2.5%.

A rent increase guideline is the most a landlord can increase rent without applying to the Landlord and Tenant Board.

If this is the case, here is an excerpt on the rules your landlord must follow:

To give you a guideline rent increase, your landlord must follow these rules:
12 months apart: After you move in, your landlord must wait at least 12 months before raising your rent. And any increases after that also must be at least 12 months apart.
90 days’ written notice: Your landlord must give you a written notice at least 90 days before your rent goes up. For example, if your landlord wants to raise your rent on June 1, they must give you a written Notice of Rent Increase no later than March 2.

This means if your landlord has increased your rent once this year, then she has to wait another 12 months to raise your rent again. She also must provide you with 90 days written notice.

For increases above the guideline, your landlord may take the following actions:

If you are protected by the rent guideline and your landlord asks you to agree to a higher increase, you can say no. You don’t have to agree or sign anything.

If you don’t agree, your landlord can apply to the Landlord and Tenant Board (LTB) for permission to raise the rent by more than the guideline.

If you do agree to a rent increase above the guideline, the agreement must say what you are getting in return. The agreement must also follow certain rules.

You may want to contact the Landlord and Tenant Board for general information about landlord and tenant issues at 1(888)332-3234. You may also find legal advice and services near you. StepstoJustice has also compiled a list of services in Ontario related to Housing Law that may be helpful.
If you have any additional questions, please feel free to post them here.

We hope this information is helpful.

Settlement.Org Team