What is Standard Practice to Everyone is Actually a Breach of Residential Tenancies Act in Ontario– Be in the Know about what is acceptable and just plain illegal. The truth may surprise you...
How many of you have asked your tenants for their first and last before they began their tenancy? In my personal experience, as both a tenant and a landlord, money was given and money was taken without giving it a second thought. It seems like a pretty common song and dance for the landlord, but did you know it’s a breach of the RTA for a landlord to ask for the first month’s rent before the actual commencement date of the lease or rental agreement? The legislation tells us this:
“s. 106(1) RTA: A landlord may require a tenant to pay a rent deposit with respect to a tenancy if the landlord does so on or before entering into the tenancy agreement.
Amount of rent deposit
(2) The amount of a rent deposit shall be the lesser of the amount of rent for one rent period and the amount of rent for one month.”
It is okay for the landlord to ask for the last month’s rent up front, but to treat this payment as anything aside from the last month’s rent, be it a safety deposit, or interest in the case of damages, it is not allowed. Damages or interest fees are to be made as separate payments. Taking a tenant’s first month’s rent before the first of the month of their tenancy is an offence. However it is standard practice to collect first and last together, and in reality this always goes unpunished. Something that could get you into trouble as a landlord is the oh-so-tempting appeal of the tenant who offers to pay their rent upfront for the year or for any additional months. Taking payments of rent before the first of the month that they are paying for is a breach, and could land a corporate landlord a fine of $50,000.00, and an individual landlord around $10,000.00. If you ever hear of someone offering to pay a year’s worth of rent up front to make their offer more appealing, while it’s tempting to feel financially stable as a landlord, it is simply not allowed. A typical day at the rental office: