Tenants Could Lose Millions of Dollars in Interest Payments

For Immediate Release - September 2, 2004

 

From the days of Bill Davis right through to Ernie Eves, tenants have been entitled to an interest payment of 6% from landlords on deposits held for the "last month's rent".

Now Dalton McGuinty may cut that payment in half. The Liberal Government placed that possibility within their lengthy consultation paper on rent reform. The Government expects to bring in new legislation in October.

A typical Toronto tenant would lose $30 per year on a rent of $1000 per month. There are approximately 600,000 rental units in the GTA and more than double that in Ontario.

Landlords have the right to collect a last month's rent deposit from a tenant, which gives landlords a protection against those few tenants who do not pay the rent. The deposit can be increased when the rent is increased. The 6% interest rate has been in place since 1970.

This year, landlords complained that banks do not pay that much interest on savings and the Government placed the issue into its consultation process for developing a new law. Interest rates on other loans are above 6%.

"After years of receiving unfair rent increases, it is galling that landlords want to renege on the 6%." said Dan McIntyre, Outreach Program Co-Ordinator for the Federation of Metro Tenants Associations. "It is even more galling that the Government could agree. If landlords do not want to pay the interest, they can give the deposits back to the rent paying tenants."

"The issue for us is that our members and callers tell us they do not receive the interest from their landlord. Instead of dealing with possible abuse of the law, the Government may cut the interest!" said Vivienne Loponen, Chair of the FMTA.

In a letter to the Federation of Metro Tenants' Associations dated August 12, 2003, Dalton McGuinty wrote, "The bottom line: Real protection for tenants at all times." This is the commitment the Federation of Metro Tenants' Associations expects this Government to honour.