After our previous blogpost on interest on Last Month's Rent (LMR) deposit, a few members asked to show an example of calculating interest on Last Month's Rent deposit in Excel (including using EDATE function). The example below assumes that Last Month's Rent deposit is $2,000 paid on February 1, 2007, and that rent was never increased.
The 2 cells highlighted in green are used for "input" data. The cells in yellow are for "output" (interest on LMR deposit). The cells highlighted in magenta show interest rates for years 1991 - 2022. The way the formulas pull these interest rates works only for 31-Jan-2007 onward (i.e. from the date when the Residential Tenancies Act came into effect). Prior to that date, interest rate was a flat 6% under the old Tenant Protection Act (TPA subsection 118(6)), and one would have to adjust for that separately if it's an old tenancy.
This spreadsheet is an example only. It will not be applicable (or it would need to be customized) in many situations, for example, if rent was increased or if LMR deposit was not held throughout the whole tenancy, etc. It is important to read RTA section 106 (which covers LMR deposit and interest on LMR deposit) and to get legal advice for one's specific situation.
Link to Example in Excel (can be downloaded and edited)
"Interest(6) A landlord of a rental unit shall pay interest to the tenant annually on the amount of the rent deposit at a rate equal to the guideline determined under section 120 that is in effect at the time payment becomes due. 2006, c. 17, s. 106 (6).Deduction applied to rent deposit(7) The landlord may deduct from the amount payable under subsection (6) the amount, if any, by which the maximum amount of the rent deposit permitted under subsection (2) exceeds the amount of the rent deposit paid by the tenant and the deducted amount shall be deemed to form part of the rent deposit paid by the tenant. 2006, c. 17, s. 106 (7).Transition(8) Despite subsection (6), the first interest payment that becomes due under subsection (6) after the day this subsection comes into force shall be adjusted so that,(a) the interest payable in respect of the period ending before the day this subsection comes into force is based on the annual rate of 6 per cent; and(b) the interest payable in respect of the period commencing on or after the day this subsection comes into force shall be based on the rate determined under subsection (6). 2006, c. 17, s. 106 (8).Deduction of interest from rent(9) Where the landlord has failed to make the payment required by subsection (6) when it comes due, the tenant may deduct the amount of the payment from a subsequent rent payment. 2006, c. 17, s. 106 (9)."
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