A tenant applied for repayment of $7,500 characterized as a security deposit and sought reimbursement of prepaid rent totaling $90,000 for a one‑year residential lease.
The court considered whether the Residential Tenancies Act prohibits demanding or accepting prepaid rent and whether a tenant may voluntarily prepay rent.
The court held that while ss.105 and 106 of the Act prohibit landlords from demanding prepaid rent or unlawful security deposits, they do not prohibit a tenant from voluntarily offering prepaid rent nor prevent a landlord from accepting it.
Based on the evidence, including communications between the parties’ real estate agents, the court found the tenant voluntarily offered to prepay the annual rent.
However, the $7,500 security deposit for damages contravened the Act and had to be returned.