Tuesday, 29 July 2014
Can the landlord demand post-dated cheques or money orders?
REQUIRING POST-DATED CHEQUES IS ILLEGAL
In Ontario a landlord is not allowed to demand post-dated cheques, money orders or any type of direct debit from your bank account. The Residential Tenancies Act is the law that governs residential landlord and tenant relationships and it has specific rules about rent and how it is charged to tenants.
With respect to post-dated cheques and other types of automatic payments this is what the law says:
s. 108. POST-DATED CHEQUES ETC.-- Neither a landlord nor a tenancy agreement shall require a tenant or prospective tenant to,
(a) provide post-dated cheques or other negotiable instruments for payment of rent; or
(b) permit automatic debiting of the tenant's or prospective tenant's account at a financial institution, automatic charging of a credit card or any other form of automatic payment for the rent.
WHAT IS A POST-DATED CHEQUE?
A post-dated cheque, or what is meant by this in the contexted of landlord and tenant law is that a landlord will often ask a tenant to provide 12 cheques, all at once for the monthly rent. The cheques are post-dated, meaning each cheque is dated for the day rent is due in each of the following 12 months. The point of post-dating a cheque is that the cheque isn't "good" or capable of being cashed until the date on the cheque. Therefore the post-dating prevents the landlord from depositing all of the cheques at once.
ARE YOU ALLOWED TO PROVIDE POST-DATED CHEQUES?
Note that the language of the Residential Tenancies Act simply provides that a landlord may not "require" a tenant to provide post-dated cheques. Certainly, providing post-dated cheques can be a great convenience and be easier for both the landlord and the tenant. This is especially true in tenancies where the relationship with landlord and tenant is good. If you have provided post-dated cheques, and this is convenient to you, there is nothing wrong with having done this. If you are a landlord and you have asked for post-dated cheques there is nothing wrong with this either. The prohibition is against "requiring" the post-dated cheques as a condition of the tenancy.
Michael K. E. Thiele
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