A deposit is not a legal requirement for a valid rental agreement, but there are very good reasons indeed why landlords should ask for a deposit. The Rental Housing Act clearly stipulates the manner in which a rental deposit should be handled before the lease commences, during the lease period and after the lease has expired.
A deposit is held by the landlord to cover costs of any unpaid rent, services and charges in arrears or damage to the property. It's not a token of goodwill or an indication of commitment by the tenant, and it is most definitely not a term loan. So clearly a deposit is a necessary element of your rental agreement. The question is how much should it be?
Recent cases of excessive damage to property and of landlords left with municipal charges unpaid for more than nine months have got us thinking...
"I've got the best tenant! She treats my property like her own, pays on time and always lets me know when something needs attention." It's wonderful when you've got the right tenant and the relationship between landlord and tenant is open, honest and on the level. In an ideal world all tenants will treat your property with care and pay on time. The goal of the Rental Housing Act is to minimise conflict between tenant and landlord and it goes a long way in achieving that.
But it all starts with choosing your tenant with the utmost care. Here is a broad check-list designed to help you with that choice.