Under the legislation, the interest paid to tenants on last month’s rent deposit is the same as the annual rent increase guideline to more closely reflect actual interest rates.
Landlords can use the interest earned on a last month’s rent deposit to top up the tenant’s last month’s rent deposit, as required, to keep this deposit up-to-date with the current monthly rent.
Note: Landlords can ask tenants for the last month’s rent as a deposit before a tenant moves in. The landlord can keep this amount until the last month of the tenancy. If the rent increases, landlords can ask tenants to pay the increase to ‘top-up’ the rent deposit.