I am writing from Lethbridge Alberta.My husband and I have rented our basement suite to a lady for the last 10 years at a quite reasonable rate as she is on a fixed income. She has said several times that we do not have to give her a receipt for the rent, as I had asked her if she wanted one when we bought the house. With the rising cost of living, we have raised her rent from $375.00 in 1999 to $475.00 at the present. Because of several problems with her in the last 2 years, we have found it necessary to give her a notice of eviction. She had until August 31, 2010 (3 months) to be out of the suite. She is now asking for 7 years worth of rent receipts. (Some government official has told her to get them so she can claim back 7 years of rent on her income tax) She has given me notice that she is leaving at the end of July. Because she has said from the beginning that she doesn't want receipts, we had never claimed the rent as income. Is not her verbal agreement as binding as written?
State/Country relating to question: Canada
Nothing yet, she just asked me this morning for the receipt
Has she always paid her rent as required?Have you declared the rental income on your taxes?
Yes, she has always paid her rent on time. Because she did not want a receipt, we did not claim the rent as income on our taxes. If I have to give her a receipt, will we have to claim that now?
That is of some concern. Does this woman run some kind of business out of the rental unit? Is she on income assistance or something? Does she pay her rent in cash or by cheque?
No, she doesn't run a business. She is on AISH (government assisted) She has always paid in cash so that we didn't have to claim it, as per her insistance when we first bought the house and we (as you can see) have tried to keep the rent low for her.
That does make some sense in that AISH may be dealing with issues surrounding the low rent she has been paying and the cost of new rental accommodations. If the rent has been paid she is entitled to a receipt. The fact that you verbally agreed otherwise is not going to help, unfortunately. If the issue were pressed the fact that you did not provide a receipt each month by agreement does not change the fact that there was rent paid. I think, though, what you should do is give her one document showing that the rent was paid for each year separately - you are not required to write out 84 monthly receipts for the past 7 years. It is possible that the CRA will get wind of what is going on and reassess your taxes. Under normal circumstances that would only be up to 3 years back. Hence the reason for writing a receipt for each year separately - if you provide one document showing the last 7 years of rent, it will be more likely that the CRA will go back that far in reassessment if this comes to light. They are entitled to do so if the non-reporting of income was wilful.With all of that said, this being the government, it may be that the proverbial left hand will not know what the right hand is doing and the issue will never be revisited.All the best and good luck.
I have a couple more questions pretaining to this same subject.
1) She did not pay any damage deposit, can she legally not pay her last month rent?
2) Her utilities were included in rent price (cable, electricity, water, sewer, natural gas). When we make up receipts can we deduct a portion from rent because my husband paid all utilities.
Even if she had paid a damage deposit, she cannot use that as an excuse not to pay her last month of rent. The two are intended for very different purposes. A damage deposit is security for the landlord after the tenancy is over to ensure that the dwelling is put in rentable condition again. In short, she must pay her last month's rent.As far as utilities go, if the agreement was to include those utilities in the rent price, the receipt should be for the amount actually paid by the tenant without deduction.I trust that answers your further queries.All the best in getting this resolved.