# Rent Increase and Last Month's Payment



## Future Millionaire (Mar 8, 2010)

Hello,

If a tenant's already paid the last month's rent at the beiginning of their lease agreement a few years at the rental amount originally they moved in for, does the landloard simply apply that towards their last month's rent although their rent has since increased? Or, does the tenant have to pay the difference between the original amount given and the current rental amount?

Thank you in advance


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## blueeyetea (Feb 27, 2013)

The last month rent is exactly that, to pay for the last month they are living in the dwelling, no matter how long they've been living there, or how low they paid. 

Now as to demanding the rent increase every year, have you also been paying your tenants the interest you owe them on the last month rent every year? Since you're supposed to be paying them interest on their deposit, it can be argued that the rent increase is the same (or close) to the interest you'd be paying them.


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## Just a Guy (Mar 27, 2012)

The government sets the rate of interest you are required to pay on the money you hold for tenants. That being said, that rate has been 0% in most provinces (I admit I haven't checked them all) for the past several years.

As for the rent, the last month's rent generally applies to the lease that was signed. The rate would usually be subject to the written amendments. Assuming you wrote the contracts and amendments properly. 

So, you need to read your contract.


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## andrewf (Mar 1, 2010)

I haven't bugged my landlord for the interest on my last month rent deposit, but then again, he also has not raised the rent for 5 years. I'll continue to bite my tongue.


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## Four Pillars (Apr 5, 2009)

andrewf said:


> I haven't bugged my landlord for the interest on my last month rent deposit, but then again, he also has not raised the rent for 5 years. I'll continue to bite my tongue.




You can ask for it when you leave.


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## matlock (Apr 22, 2012)

FYI (and to clear up any misconceptions above):

"(3) If the lawful rent increases after a tenant has paid a rent deposit, the landlord may require the tenant to pay an additional amount to increase the rent deposit up to the amount permitted by subsection (2).

...

(6) A landlord of a rental unit shall pay interest to the tenant annually on the amount of the rent deposit at a rate equal to the guideline determined under section 120 that is in effect at the time payment becomes due.

(7) The landlord may deduct from the amount payable under subsection (6) the amount, if any, by which the maximum amount of the rent deposit permitted under subsection (2) exceeds the amount of the rent deposit paid by the tenant and the deducted amount shall be deemed to form part of the rent deposit paid by the tenant."

(_Residential Tenancies Act, 2006_, SO 2006, c 17, s 106.)


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## Just a Guy (Mar 27, 2012)

https://www.google.ca/search?q=interest+on+security+deposit+canada&ie=UTF-8&oe=UTF-8&hl=en

Pick your province.


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## Future Millionaire (Mar 8, 2010)

Thank you for the answers. This question always comes up when we are talking to friends about our rentals in Ontario but since our tenants are still at the condo for over 5 years, we didn't know the answer to this question.

Much appreciated.


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## Berubeland (Sep 6, 2009)

In Ontario, the interest owed on last month's rent is the same rate as the allowable rent increase amount. 

So if you give a rent increase then you apply the last month's rent interest to the deposit to update the amount. 

End of story!


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## matlock (Apr 22, 2012)

Berubeland said:


> In Ontario, the interest owed on last month's rent is the same rate as the allowable rent increase amount.
> 
> So if you give a rent increase then you apply the last month's rent interest to the deposit to update the amount.
> 
> End of story!


Two provisos: you'll owe interest even if you haven't raised rent, and the amounts will be slightly off if the tenant terminates their tenancy earlier than on an anniversary of the start of their initial lease.


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