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This Issue: Landlord’s rights in asking postdated cheques and/or security deposit No. XXVI Anno MMIII This past month I had two interesting telephone calls from two different Landlords: one could not get postdated cheques from the Tenant, although the Tenant had previously agreed to do so and the other did not know if the month rent, held as a security deposit from the tenant, should be applied to the last month of the first year of tenancy before starting the new term as the tenant had requested. Under the current legislation the Landlord cannot demand from a Tenant postdated cheques as part of the requirement for renting his/hers premises. Also the current legislation states that it is the Tenant’s responsibility to pay for the rent on the due date. Therefore a Tenant could mail his rent cheque to arrive on or before the due date and would be within the law. This could frustrate a Landlord not knowing if payment will be received to meet their monthly obligations (mortgage, etc.). The Tenant can refuse to deliver postdated cheques even if he had previously agreed to do so in writing on a signed Tenancy Agreement and a Landlord must allow the Tenant to move in. The Landlord and Tenant Act is very clear and cannot be overridden by conditions mutual agreed to by a Landlord and a Tenant. Therefore it becomes imperative that a Landlord, or his agent, know how to properly word a Tenancy Agreement to prevent refusal from a Tenant to deliver postdated cheques either at the beginning of the first term of tenancy or of any additional term. Also under the current legislation a Landlord can ask a Tenant to provide a security deposit at the beginning of a tenancy. By Law this amount is limited to one rental period (one week, one month, etc.) up to a maximum of one month rental and can only be used as payment of last month rent. This means that the Landlord cannot use this amount for repairing damages to the premises or for any other reason . It also means that a Tenant cannot demand to have the security deposit applied to any month except last month of tenancy. When renewing a tenancy agreement the Landlord can hold the security deposit but must pay the Tenant annually interest at the rate of 6% of the amount. If the Tenant refuses to pay the due rent claiming that the Landlord has the security deposit, and a proper notice of terminating the tenancy has not been received by the Landlord, under the current legislation, the Tenant can be considered to be in default. A proper written Tenancy agreement could eliminate serious problems for a Landlord especially if they are planning to sell the rented property; in addition a Real Estate Agent must be familiar with the Landlord and Tenant Act to insure that a Landlord does not incur unnecessary financial losses arising either during the course of a Tenancy term or from selling the tenanted property. This news flash is issued for general information and it is a brief of a complex topic. Readers are cautioned that the above may not deal with their specific situation and are advised to contact Tony Iafolla to receive more information. Frustrated when renting your property?........ Confused on how to deal with Tenants?........ Thinking of selling?........ Looking for good Investment Properties, Residential or Commercial?......... Call us Now Don't Forget to Ask for our Rentals and Property Management Program.
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