Hey everyone, I’m a new landlord and I’m a bit confused about the ‘last month’s rent’ deposit. My tenant’s 1-year lease is coming to an end soon. They paid first and last month’s rent when they moved in. Does the ‘last month’ refer to the last month of the 1-year lease, or does it apply to whenever they actually move out in the future? The lease agreement I used (from OREA) just says it’ll be applied to the ‘last month’s rent’. Any clarification would be great!
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It’s for the last month they actually live there, not the end of the lease term.
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Thanks! Do you know if this is written down somewhere official? I’d like to make sure I’m following the rules correctly.
Yes, it’s in the Residential Tenancies Act (RTA). Part VII, Section 106(10) states: “A landlord shall apply a rent deposit that a tenant has paid to the landlord or to a former landlord in payment of the rent for the last rent period before the tenancy terminates.” So it’s definitely about the end of the entire tenancy, not just the initial lease term.
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Oh, that’s really helpful! I’ll make sure to look that up. I guess I should have checked the RTA first instead of relying on the OREA form.
Just a heads up, the OREA form isn’t really the best document to use for residential tenancies. You should be using the Ontario Standard Lease. It’s the official form required by law for most residential tenancies in Ontario. It covers all the important points and aligns with the RTA.
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wait, so does this mean the landlord cant use the last months rent at the end of the 1 year lease?? thats not fair, what if i want them to move out then??
That’s not how it works in Ontario. After the initial lease term ends, the tenancy automatically becomes month-to-month. You can’t just make the tenant move out because the lease is over. There are only specific reasons allowed by the RTA for ending a tenancy, like if you’re moving in yourself or selling the property. And even then, you need to follow the proper legal process.
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As a tenant, I’m glad to know this. It gives us some security knowing we can’t just be kicked out at the end of a lease term.
One more thing to keep in mind: as a landlord, you’re required to pay interest on the last month’s rent deposit. The interest rate is set by the province each year. You can either pay this to the tenant annually or apply it to any rent increase. Make sure you’re doing this to stay compliant with the RTA!
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Wow, I had no idea about the interest requirement. There’s clearly a lot more to being a landlord than I realized. I think I need to do some more research on my responsibilities. Thanks everyone for the helpful info!