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Operator Guide: Padder Deposit (LMR Replacement Policy)

Padder Deposit is an optional tenant-paid insurance product that replaces the collection of Last Month’s Rent (LMR) at participating properties. It protects landlords against eligible unpaid base rent for the tenant’s last month, subject to policy terms, conditions, and limits.

Benefits for landlords and operators

Padder Deposit helps reduce move-in friction and administrative handling of deposits while maintaining protection for the last month’s base rent.

Key benefits

  1. Enables tenants to move in with a lower upfront cost (no LMR collected when Deposit is purchased)
  2. Protects eligible last month’s base rent (subject to policy terms and limits)
  3. No cost to landlords — paid for by the tenant
  4. Simplifies leasing operations (no LMR collection, tracking, or deposit return administration)
  5. Defined claims process with clear timelines

What’s covered

Padder Deposit covers eligible unpaid base rent for the tenant’s last month, up to the policy limit (generally equal to one month of base rent at lease signing), subject to policy terms and conditions.

Coverage examples (high level)

  1. Tenant fails to pay the last month’s base rent when due
  2. Tenant never takes possession / fails to move in, resulting in eligible rent loss
  3. Tenant abandons the unit and eligible rent loss occurs
  4. Tenant holds over past the tenancy end date (as applicable under the policy)

IMPORTANT: Coverage is for base rent only. It does not include parking, utilities, storage, internet, service charges, or other non-rent amounts.

What’s not covered

Padder Deposit is not a damage deposit and does not cover:

  1. Property damage
  2. Cleaning or maintenance fees
  3. Legal or enforcement costs
  4. Utilities or other non-rent charges
  5. Any rent amounts outside the tenant’s last month (it is not ongoing rent coverage)

Term, renewal, and rent increases

  1. Padder Deposit is valid until the lease ends, including month-to-month.
  2. Policies do not renew.
  3. Rent increases are not covered — coverage remains tied to base rent at lease signing and the policy limit.

Typical pricing (operator reference)

Padder Deposit typically costs 10%–15% of one month’s base rent (one premium per lease). One tenant completes payment; roommates can decide how to split the cost outside of Padder.

Operational requirements

  1. If Padder Deposit is purchased, do not collect LMR
     If Padder Deposit is used for a lease, do not collect Last Month’s Rent.
    IMPORTANT: Padder Deposit is a tenant-paid insurance premium and is not rent.
  2. Lease file completion (required)
     After the tenant secures Padder Deposit:
    1. Padder provides a copy of the policy to the tenant and leasing team.
    2. Save the policy confirmation with the executed lease.
    3. Provide the executed lease to Padder once the tenant signs after securing the policy.

Referral process (step-by-step)

Use this workflow when Padder Deposit is accepted at the property:

  1. Approve the tenant for the lease (or confirm they are approvable).
  2. Offer Padder Deposit as an option (never a requirement).
  3. Tenant completes the Deposit application; Padder completes underwriting.
  4. If approved and purchased, do not collect LMR.
  5. Complete the lease file steps above.

Note: Tenants applying for Padder Guarantor will automatically be considered for Padder Deposit if the property accepts Padder Deposit. Tenants can also apply directly via https://padder.com/renter/.

Claims and timelines (Deposit-only)

Claims & Reimbursement Centre: https://resources.padder.com/en-ca/requests

IMPORTANT:

  • If the tenant(s) in default have Padder Guarantor (with or without Padder Deposit), follow the Padder Guarantor claims process and timelines.
  • If the tenant(s) in default have only Padder Deposit, follow the Padder Deposit process below. A Notice of Tenant Default is not required for Deposit-only claims.

Padder Deposit: process + timelines

  1. Enforce your lease and keep records of all steps taken and tenant communications.
  2. If the tenant never took possession or abandoned the unit, make a good-faith effort to re-rent and make the unit available within 7 business days of the Coverage Event.
  3. Submit your Last Month’s Rent Claim Form within 60 days of the Coverage Event.
  4. Padder reviews submissions within 1–3 business days. If approved, payment is issued within 5–10 business days, up to the policy limit.

Responsible Party (case-by-case)

Some tenants may be asked to provide a Responsible Party to support their application. If needed, Padder communicates this directly to the tenant. Responsible Parties do not complete a full tenant application, but may be asked for ID and/or financial proof.

Availability

Padder Deposit is currently available for participating residential properties in Ontario.

Padder is actively working towards expanding availability to Alberta and British Columbia.

IMPORTANT: Availability is property-specific. Confirm whether a building/portfolio is enabled before presenting options to tenants.

Where to get help

Start with Padder’s 24/7 AI chatbot in the Help Centre. Padder The Chatbot, will escalate inquiries it can’t resolve to a human agent Monday–Friday, 8:00 AM–6:00 PM (excluding weekends and holidays).