Investment of Refund Fund and Reserve Fund
Is a landlord permitted to invest the refund fund or the reserve fund?
The landlord can only deposit or invest refund fund and reserve fund money into certain kinds of accounts. This applies to the interest on those monies, too. The landlord can choose to deposit or invest in one or more of the following:
- accounts in financial institutions that are members of the Canada Deposit Insurance Corporation or subject to The Credit Unions and Caisses Populaires Act; generally that means banks and credit unions;
- bonds or debentures guaranteed by the federal government or a provincial government;
- investments that are fully insured by the Canada Deposit Insurance Corporation;
- mortgage-backed securities guaranteed by the federal government or a crown corporation;
- securities secured by the consolidated revenue fund of the federal government or a provincial government.
These investment rules don’t apply to money contributed to refund funds or reserve funds before December 1, 1999. However, if a landlord invests money received before December 1, 1999 separately from money received after that date, the landlord must give the tenants a separate accounting of those investments.
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