Security Deposits in Alberta: A Guide For Tenants And Landlords
A security deposit (also known as a damage deposit) is a one-time only payment that a landlord may ask a tenant for before moving in. In Alberta, it is common for a landlord to request a security deposit prior to moving in.
While a landlord may ask for a security deposit as part of a lease, there are certain rules governing deposits, and so it’s important to understand what a landlord can and cannot ask for regarding a security deposit.
What is the maximum security deposit a landlord can charge?
In Alberta, the maximum a landlord can charge for a security deposit is equal to one-month’s rent.
Tenants can write to their landlord requesting the return of their security deposit in some situations. For example, when the landlord does not provide a statement of account or the tenant does not agree with security deposit deductions. Non-refundable, one-time fees do not form part of the security deposit.
When including non-refundable fees, the security deposit can exceed one month's rent. It is important to always read your lease carefully, or be clear about any oral agreement you have. That way, you can be sure what forms part of the security deposit and what does not in your situation.
What happens with the security deposit when moving in?
Within two days of receiving a security deposit, the landlord must place it in a trust account. The deposit stays in the trust account until the tenant moves out. Landlords must also pay tenants interest on security deposits. Government regulation sets the interest rate for security deposits.
What happens with the security deposit when moving out?
When the tenant moves out, the landlord may use the security deposit if there are valid reasons for deducting money from it. For example, a landlord can keep money from a security deposit if:
- The tenant owes money for rent.
- The tenant damages the property, and the landlord completes the inspection reports.
- The tenant did not clean the property, and the landlord completes the inspection reports.
- The tenant did not return the keys.
- The tenant owes money for fees.
What is a Statement of Account and when should I receive it?
When the tenant gives up possession of the property (usually when the tenant gives the keys back to the landlord), the landlord has ten days to deliver a statement of account to the tenant. The statement of account sets out:
- The original security deposit amount.
- Any payable interest.
- The reason and amount for any deductions.
- The amount of the security deposit returned to the tenant.
"Deliver" means the landlord must put the statement in the mail to the tenant within ten days. However, it does not mean the tenant has to receive it within ten days. If the landlord is returning some or all of the security deposit to the tenant, the landlord will then include a check along with the statement.
In the case where the landlord does not know the cost of repairs or cleaning right away, they can deliver an estimated statement of account within ten days. They must provide a final statement of account within 30 days of the tenant giving up possession.
Who sets the interest rate for security deposits and when must the interest be paid?
The Security Deposit Interest Rate Regulation is responsible for setting security deposits interest rate. The landlord is responsible for paying interest on a security deposit to the tenant at the end of each tenancy year. In some cases, the landlord and tenant may agree (make sure this is in writing) to pay interest due at the end of the tenancy instead of annually.
Service Alberta has an online security deposit interest calculator to assist you with calculating the interest you may be owed.
How can I request a Return of Security Deposit?
Tenants can write to their landlords requesting the return of the security deposit if they:
- Do not receive a statement of account from their landlord.
- Do not agree with the landlord’s deductions from the security deposit.
Tenants who do not agree with security deposit deductions should outline reasons why the deductions are inappropriate or unreasonable.
If the landlord and the tenant cannot agree on their own, then the tenant can make an application in Alberta Court of Justice or through the Residential Tenancy Dispute Resolution Service for return of the security deposit.
What can a tenant do if the landlord does not provide the security deposit?
The landlord has ten days from the tenant moving out to ‘deliver’ (put the statement in the mail) the statement of account with a cheque for the security deposit (if there is money owing after any deductions) to the tenant. It does not mean the tenant has to receive it within ten days.
If a tenant does not receive the statement of account and security deposit from their landlord within a reasonable period after the ten days has passed, he or she should write to the landlord requesting the return of the security deposit.
It is an offence under the Residential Tenancies Act for the landlord to not deliver a statement of account to the tenant. Tenants may also consider escalating this issue with Service Alberta by filing a complaint.
What should tenants do if they don’t agree with the deductions?
Tenants who do not agree with the deductions made from their security deposit, should write to their landlord requesting the security deposit return, and the reasons why they believe deductions made are unreasonable.
If the landlord and tenant cannot come to an agreement on their own regarding the security deposit, then the tenant can make an application in Alberta Court of Justice or with the Residential Tenancy Dispute Resolution Service.
Can a landlord keep the security deposit if inspection reports were not completed?
No. If a landlord did not complete inspection reports, they are not allowed to keep any of the security deposit to cover any damage to the unit. It must be noted that a landlord could still keep the security deposit to cover other things, such as unpaid rent.
- The landlord must complete a move-in inspection one week before or after the tenant moves in.
- The landlord must also complete a move-out inspection one week before or after the tenant moves out.
- The landlord must give tenants a copy of reports from both inspections. The landlord can complete the inspection without the tenant if a tenant refuses to take part in either inspection.
If the landlord does not return the security deposit, the tenant should write a letter requesting the return of it. If the deposit still isn’t returned, the tenant should file a complaint with Service Alberta.