# Post-dated cheques?



## peterk (May 16, 2010)

I'm about to sign a new lease with an unknown landlord. He's specified that he'd like post-dated cheques for the 12 month period. I don't have much of a problem with this, but it makes me slightly uneasy, not knowing this guy at all. The worst case scenario, he would be a completely negligent landlord and I would be forced to flee the premises for fear of my health or safety.
So my question is in regard to the cashability of canceled cheque. I've heard in the past that even if one cancels a cheque that it wouldn't necessarily protect the cheque writer. I've read that you can "cross" your cheques and that this would prevent the cheque receiver from depositing a canceled cheque through a moneymart. 
Could someone explain this a bit better to me as to the risks I'm taking, and the possible protections I could employ?


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## the-royal-mail (Dec 11, 2009)

I understand how you feel.

1. I am not sure if a LL has the right to ask you for 12 advance cheques like that-check into that.

2. Your only recourse is to issue a stop payment on the cheques via your bank but this will cost $$$ in fees. Of course, if you sign a lease, you are obligated to pay all of those months until you sublet to someone else. Unless subletting is not permitted with your LL?


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## HaroldCrump (Jun 10, 2009)

I think you are protected.
The depositor's bank will allow a post dated cheque to be deposited, and your bank may even honor it, but you can easily call them and get it canceled and get your money back.

This happened to me a few years ago.
A rogue contractor deposited a post dated cheque before performing the work, and it cleared through both the banks.
I called and my bank promptly canceled it and refunded the amount.

For outstanding post dated cheques that have not been deposited yet, you can do a stop payment.
That will protect you.


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## Guest (Mar 24, 2011)

peterk said:


> ... and the possible protections I could employ?


 I'd walk away ... but you might set up a chequing account and only deposit the funds a week or so before each cheque is due. If the landlord tries anything underhanded, the cheque would bounce ... and you'd be found in the right ... imo.


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## financialnoob (Feb 26, 2011)

What province do you live in? It could affect the answer. In Ontario for example, it is not allowed.

From the Ontario Residential Tenancies Act, 2006:



> 108. Neither a landlord nor a tenancy agreement shall require a tenant or prospective tenant to,
> 
> (a) provide post-dated cheques or other negotiable instruments for payment of rent; or
> 
> (b) permit automatic debiting of the tenant’s or prospective tenant’s account at a financial institution, automatic charging of a credit card or any other form of automatic payment for the payment of rent. 2006, c. 17, s. 108; 2009, c. 33, Sched. 21, s. 11 (3, 4).


However you may be required to provide one post-dated cheque for a last month's rent deposit, usually on the date you move in.


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## peterk (May 16, 2010)

Thanks guys. I realize he can't legally require post-dated payment, but I'm signing the lease with a couple friends and I don't particularly want to be the odd man out. And I do recognize it's more convenient both for him and for me to give post dateds.
I understand I'm obligated to pay as defined by the lease, this is only for the situation of negligence on his part. Legally I'm not sure how that would play out. But if the landlord didn't hold up his end of the tenant-landlord agreement then ethically I would feel in the right by stopping payment and vacating.
I truly expect none of this to happen of course, only that my mind started racing with the request of post dated cheques. Most places I've lived in the last several years has been for a few months at a time, often with little/no lease. So these year long commitments make me a bit nervous.

Regarding a canceled cheque. What is the situation if he were to try and deposit a canceled cheque through a moneymart. I imagine my bank would have less ability to extract the funds from a moneymart than another bank... that's my real concern. 
As far as keeping insufficient funds for the cheque to clear, would add some sort of black mark to my record with the bank?


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## Plugging Along (Jan 3, 2011)

As a landlord, I have always asked for post dated cheques, primarily for convience. 

This is just how everyone in our family have done it for ages. We've actually never had any one refuse or raise any concerns. We're up front with it, and if they have a problem with then I would quite honestly consider renting to someone else.


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## Jungle (Feb 17, 2010)

^^ Same here. I ask my tenants, you really want me knocking on the door at the 1st of the every month? What if the landlord or tenant is working or busy? 

Last month, I ran out of cheques to deposit. So, I phone the tenant, she said she would mail one out. Well, nothing came in the mail. 1.5 weeks left until rent is due, tenant says she forgot to mail them out. So then it became urgent and stressful for her to mail them out asap. Cheques came in the mail last minute, causing me a lot of anxiety. 

Please do not be paranoid of giving your landlord post dated cheques. Just ensure they will deposit it on the same day of every month.


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## financialnoob (Feb 26, 2011)

peterk said:


> Thanks guys. I realize he can't legally require post-dated payment, but I'm signing the lease with a couple friends and I don't particularly want to be the odd man out. And I do recognize it's more convenient both for him and for me to give post dateds.
> I understand I'm obligated to pay as defined by the lease, this is only for the situation of negligence on his part. Legally I'm not sure how that would play out. But if the landlord didn't hold up his end of the tenant-landlord agreement then ethically I would feel in the right by stopping payment and vacating.
> I truly expect none of this to happen of course, only that my mind started racing with the request of post dated cheques. Most places I've lived in the last several years has been for a few months at a time, often with little/no lease. So these year long commitments make me a bit nervous.
> 
> ...


Again, it depends on the province you live in. If it's Ontario, the negligence factor or your ethics on the situation don't really matter legally. You can't withhold rent for whatever reason. You have to file an application for a rent reduction if you feel you have a case, but must continue to pay your rent in the meantime.

Post-dated cheques can make a ton of sense in the first year of a lease simply because it's hard to break the lease anyways, so you're on the hook for the rent. And they can be quite useful if renting a house or place where the landlord isn't on-site, though in large apartment buildings with superintendents and drop boxes, not as necessary. Though once the tenancy ends and goes month-to-month, I wouldn't advise it in case you are moving out and the landlord doesn't return say 4 post-dated cheques. 

As for the landlords who request them, they're a convenience sometimes to both sides, but the act does state they cannot be a requirement to allow tenancy. Having said that much, it'd be almost impossible to prove you passed on a tenant for that reason, and I doubt a tenant would file an application against a landlord for being passed up for that reason.

Oddly enough, I am really unsure about the canceled cheques. I believe they're treated as NSF, but not 100% sure as I never encountered that scenario. As for NSF cheques, they're subject to whatever fees are agreed upon in the lease, so times 6 months can add up quickly, plus if your bank also hits you with a fee, that's quite a lot. The landlord can make an application to recover those as well.

If you live in Ontario, here's my advice. If you don't, then I would ignore it. If you're really concerned about it, provide first and last. Or you can sign the lease and not provide them with post-dated cheques. Anything in a lease that goes against the Ontario legislation is considered void and unenforceable, even if agreed upon by both parties. That might cause some bad blood though. Alternatively, you can give one year's worth since you'll be on the hook for the lease for a year anyways, but after the lease expires and goes month-to-month, you can just pay monthly.


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