Interest on your deposit must be paid every year. This interest must be paid on the anniversary of your lease. 

• For example:

  • John rented a house and entered into a tenancy agreement on January 1, 2024. Ideally, the interest on the deposit should be paid on January 1, 2025 if the tenancy is continuing. The Landlord may give John the amount of interest in cash, or they may deduct it from that month's rent payment.

Does my Landlord have to pay interest on the deposit?

Yes. Under section 106(6) of the Residential Tenancies Act, your Landlord is required to pay you interest on your last month's rent deposit.

What happens if my landlord does not pay the interest?

If your Landlord does not pay you any interest, you are legally allowed to deduct the interest amount from the following rent payment. This is allowed under Section 106(9) of the Residential Tenancies Act.

How can we calculate the interest amount?

To calculate the interest that must be paid, we need to look at what the annual guideline increase is as listed under Section 120(2) of the Residential Tenancies act. This section refers to the amount that your rent may be increased for a rent-controlled unit. However, in the case of interest on last month rent deposits,  the guideline rate set here is for all units. Regardless of rent control status. 

Here are the guideline increases for 2024 and 2025

• 2024: 2.5%

• 2025: 2.5%

These amounts are both the maximum guideline increase amount. 

To calculate the amount of interest, use the following formula.

• If your rent is $3,000.00, and your Landlord needs to pay you interest on that amount, you will multiply the rent by the guideline amount

• In this case, 

  • $3,000.00 * 0.025 = $75.00

• The Landlord here must pay $75.00 in interest. If the interest is not paid, the tenant may deduct $75.00 from the next payment of rent.

It is important to note that rent interest must be paid every 12 months. 

If you need to let your landlord know, it is important to do so in writing. Write a letter or email to your landlord request this interest to be paid. 

If you have any questions or need help, please contact a licensed paralegal or lawyer who is knowledgeable in this area. 

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Michael Joseph Kaufman

Licensed Paralegal

Kaufman Paralegal Services

(289) 395-0207

Michael@Kaufmanrights.ca