A tenant paid a $2,000 last month's rent deposit when the rent was $2,000. On July 1, 2026 the annual interest on the deposit falls due, and the same day the rent lawfully rises to $2,030. The 2026 guideline is 2.1%. What may the landlord do with the interest?
Correct Answer
A) Pay or credit $12 and keep $30 to top up the deposit to $2,030
Interest is owed at the guideline in effect when it falls due (s. 106(6)): $2,000 × 2.1% = $42. Section 106(7) lets the landlord deduct from that interest the amount needed to bring the deposit up to the new maximum, here $2,030 − $2,000 = $30, which is then treated as part of the deposit. The tenant receives $12.
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