News   Nov 20, 2019
 133     0 
News   Nov 20, 2019
 360     0 
News   Nov 20, 2019
 235     0 

Paying an illegal damage deposit

deranged

New Member
Member Bio
Joined
May 24, 2012
Messages
34
Reaction score
5
Thanks for your reply Tuscani!
Since there's costs owed from hydro and rent that they didn't pay in full, can we just net the costs? The owe us more than the damage deposit we took.
The tenants are requesting for the damage deposit to be returned, and I'm afraid if we return it, they'll just get their deposit back, not pay the rent owed, and not pay the hydro bills and leave.
 

doug

Active Member
Member Bio
Joined
Aug 11, 2010
Messages
878
Reaction score
25
Thanks for your reply Tuscani!
Since there's costs owed from hydro and rent that they didn't pay in full, can we just net the costs? The owe us more than the damage deposit we took.
The tenants are requesting for the damage deposit to be returned, and I'm afraid if we return it, they'll just get their deposit back, not pay the rent owed, and not pay the hydro bills and leave.

That's very likely to happen. Then, you will be on the hook for lost rent, hydro bill, lawyer fees, and most of the posters here will say you deserved it because you're a big evil landlord who took advantage of a poor renter.
 

Tuscani01

Senior Member
Member Bio
Joined
Apr 22, 2007
Messages
5,154
Reaction score
1,403
Thanks for your reply Tuscani!
Since there's costs owed from hydro and rent that they didn't pay in full, can we just net the costs? The owe us more than the damage deposit we took.
The tenants are requesting for the damage deposit to be returned, and I'm afraid if we return it, they'll just get their deposit back, not pay the rent owed, and not pay the hydro bills and leave.
None of that matters though. You cannot take the law into your own hands. The rules are quite clear. You cannot charge a damage deposit. Period. Return the deposit to them, and take them to court if they do not pay what is owed to you.

Keeping the damage deposit is not in your best interest. You can get hydro costs and unpaid rent in court. (Provided that your lease clearly states the tenant is responsible for hydro costs). You can also get the money which they owe you for the rest of their lease by taking them to court. At the end of the day, this is your best option and will leave you with the least amount of damage from this lease gone wrong.
 

kalvinone

Active Member
Member Bio
Joined
Nov 28, 2009
Messages
202
Reaction score
0
I would also put it in writing that they received the deposit back.. so you don't get screwed on that note in case they dispute it in court later on.
 

TheKingEast

Senior Member
Member Bio
Joined
Feb 16, 2011
Messages
5,400
Reaction score
2,614
Honestly, tenants will always win out. The laws are typically in their favour. I wish landlords could charge a damage deposit. I have been a landlord for 5 years now. It has been pretty good for the most part. You will get the odd tenant that will not take care of your place and flat out trash it. My latest tenants were decent but they really didn't take care of the place. I"m certain if there was a damage deposit, they would have been much more careful.

While I understand tenants need to be protected from unscrupulous landlords. What about the landlords? There are some terrible tenants out there that use every single advantage out there.
 

wopchop

Building Toronto
Member Bio
Joined
Mar 28, 2011
Messages
1,468
Reaction score
306
Location
Oakville
Honestly, tenants will always win out. The laws are typically in their favour. I wish landlords could charge a damage deposit. I have been a landlord for 5 years now. It has been pretty good for the most part. You will get the odd tenant that will not take care of your place and flat out trash it. My latest tenants were decent but they really didn't take care of the place. I"m certain if there was a damage deposit, they would have been much more careful.

While I understand tenants need to be protected from unscrupulous landlords. What about the landlords? There are some terrible tenants out there that use every single advantage out there.
There is definitely a fine balance that needs to be found.

The flip side of the damage deposit is that some landlords will do everything possible during the final inspection to 'find' damages, which are really just wear & tear isses due to lack of maintenance, use that as an excuse to keep the deposit.
 

TheKingEast

Senior Member
Member Bio
Joined
Feb 16, 2011
Messages
5,400
Reaction score
2,614
There is definitely a fine balance that needs to be found.

The flip side of the damage deposit is that some landlords will do everything possible during the final inspection to 'find' damages, which are really just wear & tear isses due to lack of maintenance, use that as an excuse to keep the deposit.

You're right, but the status quo just isn't good eough. Renters know there isn't a thing a landlord can do so they treat the place like crap. My last tenants are the only tenants that made me consider changing my leases. They treated the place like crap. I had it cleaned twice and painted the entire place a few times over. Cat piss, missing lights, broken appliances, etc. Complete hogs. Even the fob was broken.

I bet they wouldn't have acted that way if there was a damage deposit. Renters know they hold all the leverage.
 

doug

Active Member
Member Bio
Joined
Aug 11, 2010
Messages
878
Reaction score
25
On that note, any suggestions on screening tenants?
Why? According to this thread, tenants were gently lowered to earth by angels, only to be taken advantage of by evil landlords.
 

Admiral Beez

Senior Member
Member Bio
Joined
Apr 28, 2007
Messages
7,512
Reaction score
1,720
One of my contacts owns several rental low to mid rise apartment properties across Toronto. He only buys multi-bedroom units in areas with good schools, and thus ensures his units are in high demand, and can charge high rents. He always charges a damage deposit equal to at least two months rent, which could equal deposits over $3K. He pays no interest to the renter. His feeling is he's upfront with his requirements, and if you don't like it, don't rent it. He also said he likes the high deposit as it's good evidence that the potential tenant has enough liquid cash as not to miss a rental payment. Lastly, he only rents to Chinese folks (he's same) as he says they accept the above and are excellent tenants, which begs the question why the deposit....but it's his rules.

I'm not defending any of the above, only providing an example of illegal damage deposits in action.
 

Admiral Beez

Senior Member
Member Bio
Joined
Apr 28, 2007
Messages
7,512
Reaction score
1,720
Why? According to this thread, tenants were gently lowered to earth by angels, only to be taken advantage of by evil landlords.
I don't know why anyone would get into the residential rental biz now. It seems to be nothing but headaches, and the days of buying in a low market, using the rents to pay it off and then sell it on a high market are over.

IMO, commercial real estate is easier. No tenant rules, instant evictions for nonpayment, and damage deposits are perfectly legal.
 

TheKingEast

Senior Member
Member Bio
Joined
Feb 16, 2011
Messages
5,400
Reaction score
2,614
One of my contacts owns several rental low to mid rise apartment properties across Toronto. He only buys multi-bedroom units in areas with good schools, and thus ensures his units are in high demand, and can charge high rents. He always charges a damage deposit equal to at least two months rent, which could equal deposits over $3K. He pays no interest to the renter. His feeling is he's upfront with his requirements, and if you don't like it, don't rent it. He also said he likes the high deposit as it's good evidence that the potential tenant has enough liquid cash as not to miss a rental payment. Lastly, he only rents to Chinese folks (he's same) as he says they accept the above and are excellent tenants, which begs the question why the deposit....but it's his rules.

I'm not defending any of the above, only providing an example of illegal damage deposits in action.
He sounds like a douchebag.
 

kalvinone

Active Member
Member Bio
Joined
Nov 28, 2009
Messages
202
Reaction score
0
IMO, commercial real estate is easier. No tenant rules, instant evictions for nonpayment, and damage deposits are perfectly legal.
Except it's so much harder to get into... you need a lot of money for commercial as I don't think any banks will lend you the cash to rent a place out.
Also much more riskier if you don't get a good area.
 

TOphotog

New Member
Member Bio
Joined
Jan 26, 2013
Messages
82
Reaction score
6
Location
Toronto
On that note, any suggestions on screening tenants? or should I create a new thread?
Always ask for an up to date credit report, references from their employer, etc. Also ask for the name and contact info of the landlord previous to their present one. The present one will tell you anything to take Tenant from Hell off his hands. You'll want to ask that previous landlord if the rent was paid on time, was the place clean and in good repair when the tenant left, how long the tenant was there and why did they leave, etc. Google the person's name, search on their Facebook page for rampant partying, etc. Do your due diligence and you shouldn't have a problem.
 

Top