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%.