Let’s assume you have followed my piece of advice to find an apartment that is right for you. Price is fantastic, the landlord is happy to approve your lease for a next year. What’s next? Well, the most intimate part of the story — payment 🙂
In Russia it looks like you put your hand in a pocket and pull a big bundle of banknotes: you pay for the first month of rent, you pay to the agent and you pay a security deposit. And this is usually a sizable amount of money. In Canada it is a little less intimate: the amount is smaller (because there is normally no real estate agent) and many landlords do not accept cash for a payment. I spoke to a number of landlords, some of them do accept cash, but many of those I have spoken to — don’t. As they say — we can handle 20 bucks, but larger amount — it’s better not to deal with cash for security and accounting purpose.
So what do they accept?
The best form of payment for landlord is a bank draft. When landlord doesn’t completely trust you, they have a concern that your personal cheque might ‘bounce’ (i.e. be back to them with a message ‘insufficient funds’).
A bank draft is a cheque issued by your bank, so you have to visit your bank every time to issue new drafts. When they issue a draft, full amount of your payment is set aside you are given a piece of paper with a banker’s signature on it. In addition to a signature, they put the amount of money they reserved and a person or firm that could access these funds. So you go to a bank and say: “I want you to issue a $1000 draft for a Shiny Properties Ltd.” and they do it for you (normally free of charge, but this may vary based on your bank services package). If the draft is stolen, it cannot be cashed by a thief. If somehow it happens anyway, you can dispute it, but it will never happen because a thief cannot put a draft into an ATM and get cash anonymously. It will always go thru another bank account and it will always be traceable.
The bottom line is that bank draft is an offline form of cashless payments. I can certainly understand how governments can ban large cash transactions when you have bank drafts and cheques. In Russia we have neither of them, so I’m not sure how it should work in Russia.
So, before you start your hunt for a rental of your dream in Canada you would be better open a bank account and put necessary funds there. Opening a bank account is possible even if you:
- Don’t have a local phone number
- Don’t have a Social Insurance Number
- Don’t have a permanent address (hotel room works)
After you establish a relationship with your landlord, you can save a little time and pay with cheque. You just need to get a cheque book for your bank account and it takes some time because your name and address is printed on a cheque.