Student Family Housing Last Month’s Rent (LMR) Top-Up

Two factors influence this calculation:

1. The rent change differential for new rent effective on September 1st each year; and
2. The amount of interest a tenant earns on their rent deposit (rate earned for any given year and the number of days on deposit).

Background Information

• Student Family Housing, like other landlords in Ontario, collects a deposit at the start of the tenancy, to cover the last month of rent.
• As rents go up each year, the deposit must be topped-up to equal the current rental rate.  The full amount for the new rent must be on deposit to pay the last month at the time a tenant decides to vacate.
• The landlord must pay tenants interest on the rent deposit every 12 months.
• The rate of interest a landlord must pay is determined by the Ministry of Housing and published on the Ontario Landlord Tenant Board website on an annual basis. The interest rate between January 1 and December 31, 2020 was 2.2%.
• Student Family Housing rents, which are not governed by the Residential Tenancies Act (RTA), increased by 3.5% effective September 1, 2020.

Sample Calculation:

• A tenant moves into a two-bedroom unit on February 1, 2020.  The rent at the time of move-in is \$1305.  A deposit of \$1305, representing last month’s rent, is collected at the start of the tenancy.
• On September 1, 2020 rent for a two bedroom is increased to \$1351.  The differential is \$46.  The rent deposit on file is now short by \$46.
• However, the tenant has earned 2.2% on the deposit from February 1 to September 1:
• \$1305   X   2.2%   X   213/366 days
• Interest earned is \$16.71
• The tenant owes \$46 but has a credit for interest earned of \$16.71.  The LMR Top-up required is \$46 less \$16.71 = \$29.29.

Other Notables:

• The above is a simple calculation to illustrate the principles.  Other factors may impact specific calculations such as parking deposits, the timing of payment of prior year top-ups etc.
• For 2021, rental rates for existing tenants will not increase on September 1, 2021.  Interest on the LMR deposit will however be earned at a rate of 1.5%.