ON Landlord and Tenant Question-illegal or just shady??
I know a few of you here must be landlords so I was wondering your take on this. When should a rent deposit given to a landlord with a rental application typically be cashed? As soon as the landlord receives it? Or once the landlord accepts/ approves the applicant? Just the reason why I'm asking is because this happened to my husband and I. We're applying to the rental board with a separate issue (illegal eviction) but wondered if this is further evidence of our landlord's general shadiness.
So essentially... we met the landlord one afternoon on the 15th of the month, gave him our application and rent deposit cheque. The application clearly said that the $$ would be put toward first month's rent once the application was approved (i.e. once he had verified information re: employment, income, etc.). He refused to give us a receipt for the $$. Because of that and just a gut feeling that he seemed dishonest, we changed our mind about the place. We tried all afternoon and evening to reach him but he didn't return our calls. So first thing the next morning, I called the bank to put a stop payment on the cheque but he had already cashed it! He literally must have ran directly to the bank.
When I finally managed to reach him, he said that we were not yet accepted as tenants until he had confirmed our employment. When I asked why he had cashed our cheque if he hadn't yet accepted us he said that he routinely cashes all cheques from prospective applicants and then returns the $$ to those that did not get the place (Yup, I know that makes no sense!) It wasn't until a week later that he was able to confirm our employment and we signed the lease. We didn't want to rent from him anymore at this point because he seemed dishonest but we felt forced to because he had already cashed our cheque and we couldn't afford to just lose that $$.
So your opinion please -- is cashing an applicant's rent deposit before even accepting their application just shady or is it also illegal??
According to this website: http://www.ontariotenants.ca/law/lastmonthsrent.phtml it's not technically illegal, but if he cashes it, he will owe you interest on it, so if it takes him 6 months to return it, he owes you interest.
But I'm no expert. And these tenants rights as they are posted everywhere always seem to have so many loopholes and grey areas (thought I suppose that's deliberate).
According to this website: Last Month's Rent Deposits in Ontario it's not technically illegal, but if he cashes it, he will owe you interest on it, so if it takes him 6 months to return it, he owes you interest.
But I'm no expert. And these tenants rights as they are posted everywhere always seem to have so many loopholes and grey areas (thought I suppose that's deliberate).
Thanks for the link cap10. I looked at the page but I think even that's open to interpretation. It says a landlord can "demand a last month's rent deposit' which is fine. I understand that. But does asking for a deposit mean you can go ahead and cash it right away?? I dont' know. That just seems wrong to me. Especially given that in this case, he indicated that he was still collecting applications and rent deposits from other people for the same place. So he had our $$ but we had no guarantee of anything. Any other time that I've rented an apt. I didn't pay anything until the landlord offered me the place.
First, some information for you: Landlord and Tenant Board home page
You can call the Board at 416-645-8080 from within the Toronto calling area, or toll-free at 1-888-332-3234. They can't give you legal advice, but they can tell you what the law is, what your rights are and what you can do.
As for illegal, no, it's not illegal to cash the deposit cheque right away.
As for shady, that's a matter of opinion.... the other side of this equation is that there are tenants who write a cheque for their last month's rent deposit, and then it bounces. Unfortunately for the landlord, by the time it comes back from the bank the tenant may have already taken possession of the apartment, and at that point there is no way for the landlord to force the tenant to give them a last month's rent deposit. Your landlord may have gotten burned by that once too many times, and now chooses to do things this way. (Plus, making sure the cheque actually clears from the bank is one way to confirm that the tenant really has the ability to pay the rent.)
That he refused to give you a receipt may be a little odd, but really a receipt in this situation is not strictly necessary--if you are paying by cheque, your cancelled cheque serves as your own proof of payment.
Every landlord does this part a little bit differently, and every landlord has the right to do this a bit differently.
As an example, for a couple of our buildings, we won't run a credit check until someone gives us a certified cheque or money order for the deposit--the reason for that is that we got burned a number of times with people who fill out an application, get approved, are told that they are approved, and then never show up again. It's a waste of our time and money to approve people who aren't actually serious about taking the place, so we essentially ask people to put their money where their mouth is. (I don't actually deposit the cheque upon receipt, but only because it's annoying to reverse the entry in our accounting system.)
Thanks very much for the information Sonal. Actually I have spoken to the LTB a few times about the other issues that we had with this landlord. They are the ones who advised me to file a Form T2 for illegal eviction notices. They were very clear in their info. about that but were less clear re: rent deposits. So it doesn't seem odd to be cashing deposit cheques from multiple people for the same unit???
Thanks very much for the information Sonal. Actually I have spoken to the LTB a few times about the other issues that we had with this landlord. They are the ones who advised me to file a Form T2 for illegal eviction notices. They were very clear in their info. about that but were less clear re: rent deposits. So it doesn't seem odd to be cashing deposit cheques from multiple people for the same unit???
As I said, everyone handles things differently, so it's hard to judge what's odd and what's not. In Ontario, it's relatively easy to turn down a prospective tenant, but fairly difficult to remove a sitting tenant, so landlords have a fair bit of flexibility in how they choose to handle their application process.
But certainly, since he was clear that he gives back the deposit to anyone he refuses, there's nothing inherently wrong about doing things this way.
Read this article and you will understand why landlords operate the way they do.
laws protect the tenant way more than the landlord, which almost always loses in the end and have more to lose..
so don't judge a person for cashing your cheque to see if it works..
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I've been following that story a bit... she's not the worst tenant out there by a longshot. But for landlords who are renting out a single house or a very small rental property--yeah, they get hit very hard by people like this.
But I completely agree with you that not all landlords are amazing.
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