When a tenant goes on a Month-to-Month Lease term with a rental increase

As a new Landlord it can get confusing when a tenant’s lease term comes up as they have already paid there last month’s rent deposit. Some owners think that they don’t collect rent for that last month and get the tenant to pay a month later as they continue on in a month-to-month lease. THIS IS WRONG! The system is designed to give the tenant the ability to save a deposit for the next place they might move into … keep in mind that the last month is always moved to the end or bumped forward on a month-to-month lease.
In this example the tenant signed a lease in the amount of $1850.00 starting on Dec 1, 2017 and currently paid the following;
December 2017 – First Month’s Rent ($1850.00)
November 2018 – Last Month’s Rent ($1850.00)
If the tenant continues on a Month-to-Month term after the original lease they would give a Cheque in the amount of $1850.00 for November 2018 and since you always have to give 60 days notice the last month now becomes January 2019.
Let’s say the tenant wants to stay for another 6 months and you have advised them of a rent increase (1.8% for 2019 as set by the Ontario Landlord Tenant Board) 90 days in advance notice (March 1, 2019 is the rent increase for example) … here is how he/she would pay;
November 2018 – $1850 – The pre-paid deposit ($1850) from the original lease is moved forward to May 2019. However a difference of $33.30 will be owing to increase the deposit amount to the new rental amount.
December 2018 – $1850
January 2019 – $1850
February 2019 – $1850
March 2019 – $1883.30 – New Rent with increase + another $33.30 ($33.30 is applied to the last month’s pre-paid rent deposit – this brings up the deposit to the new rent increase)
April 2019 – $1883.30
May 2019 – Is the Pre-Paid Last Month which was bumped forward from November 2o18.
Of course the tenant can keep bumping the last month forward if they decide to stay longer. The initial lease signing is still applicable and binding and the tenant always needs to give 60 days notice even when on a month-to-month term.
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