A condominium tenant paid a $2,400 last month's rent deposit, and the rent has not changed. Assume the rent increase guideline in effect when the annual interest falls due is 2.5%. How much interest must the landlord pay or credit the tenant for that year?
Correct Answer
C) $60
Section 106(6) of the Residential Tenancies Act, 2006 requires the landlord to pay interest on the rent deposit annually at a rate equal to the guideline under s. 120 in effect when the payment is due. $2,400 x 2.5% = $60. If unpaid, the tenant may deduct it from a later rent payment under s. 106(9).
Why This Is the Correct Answer
Interest equals the deposit times the guideline in effect when payment is due: $2,400 x 2.5% = $60 for the year.
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