While you might rent to avoid the cost and responsibility of owning a property, you probably still treat your rental like a home. You clean it, decorate it, and even do occasional maintenance. However, even if you check off all the must-dos on your move-out checklist, you aren’t guaranteed to get your full damage deposit back.
Let’s take a look at the cost of renting, how damage deposits are used and how to protect yourself as a rental tenant in Canada.
What is a Security or Damage Deposit
Damage deposits (sometimes called security deposits) pay for any destruction a tenant does to a rental beyond regular wear and tear. Depending on the province, deposits can also be used to supplement missed rental payments or to pay for cleaning if the tenant didn’t leave the unit spotless after moving out.
Most provinces that allow damage deposits are limited to the equivalent of one month’s rent. Tenants usually receive their deposit back from their landlord after moving out of their rental.
How Are Damage Deposits Regulated Canada-Wide?
According to the Canadian Mortgage and Housing Corporation (CMHC), each province and territory has different standards regarding security deposits. Each province has a local residential tenancies board. These boards are responsible for regulating the tenant and landlord relationship, including security deposits.
To find out which organization regulates damage deposits in your province, a good place to start is by Googling “residential tenancies + your province.”
Damage Deposits in Ontario
In Ontario, your landlord can ask for a rent deposit, but they can’t use it to cover harm to the rental. If the landlord wants to charge for repairs, they have to make a request through the Landlord and Tenant Board.
As far as why no damage deposits are allowed in Ontario, Toronto-based paralegal Dan McIntyre says it’s for one fundamental reason: “The landlord should not be able to act as judge and jury when it comes to property damage.” A common dispute among landlords and tenants, damage deposits are difficult to standardize, and opinions on whether the repair is due to wear and tear, or true damages, vary from person to person.
Damage Deposits in British Columbia
At the start of a renter’s tenancy, the landlord can ask for a security or damage deposit. The amount can be no more than half of the first month’s rent. Under rental tenancy laws in BC, your tenancy is officially established once the landlord accepts your deposit. Landlords in BC can also request a pet damage deposit. This can be no more than half of one month’s rent, regardless of the number of pets you have. Your landlord can only use the pet damage deposit to repair pet-related destruction.
When your tenancy ends, your landlord must return your deposit to you within 15 days plus pay 1.95% interest. Alternatively, if the landlord needs to make repairs, they can ask you to agree in writing to any deductions. They’ll then return the difference to you.
If you disagree with the deductions, you can apply for dispute resolution.
Damage Deposits in Alberta
A landlord can charge a damage and security deposit in Alberta, but they cannot be more than one month’s rent. Your landlord cannot increase your security deposit even if they raise your rent.
Within two days of receiving your damage deposit, your landlord should place that money in a savings account. There is a minimum amount of interest the deposit must earn, according to provincial regulations.
When you move out, your landlord can use your damage deposit if you:
- Have unpaid rent
- Didn’t clean the property properly before the move-out inspection
- Didn’t return the keys
- Owe any outstanding money or fees, or
- The landlord determines there is damage after the move-out inspection
After you leave your rental, your landlord has 10 days to return your damage deposit. Your landlord will itemize any deductions and interest paid in a statement. If you disagree with the deductions, you can object by making an application through the Alberta Tenancy Dispute Resolution Service.
Damage Deposits in Other Provinces
Many provinces have similar rules around damage deposits. Typically your landlord can charge up to one month’s rent as a damage deposit. They also must return your damage deposit within a set period after your tenancy ends with interest. If you want to dispute any deductions, you’ll need to make an application to your local tenancy board.
That said, not every province abides by the same rules. It’s essential that you understand the regulations in your province. Here are some quick links to residential tenancy resources in the provinces we haven’t covered:
- Manitoba Residential Tenancies
- Saskatchewan Residential Tenancies
- Rights and Obligations of the Lessor and Lessee Quebec
- Renting in New Brunswick
- Nova Scotia Residential Tenancies Program
- Renting in PEI
Security Deposits vs Damage Deposits
You might have noticed that we use the term “security deposit” and “damage deposit” interchangeably throughout this article. In some provinces, security deposit and damage deposits are interchangeable terms. Your landlord can use your “security” deposit to pay for damages to the rental. In other provinces, like Ontario, this is not the case. In these provinces, your landlord may not use your “rent” or “security” deposit to pay for damages or cleaning. You should read up on your province’s legislation to know what is legal.
3 Ways to Protect Yourself as a Tenant
No one wants to move out of their rental and not get their security or damage deposit back. The best way to avoid having any uncontrollable issues arise as a renter is to ensure the landlord or property owner you choose is experienced and to communicate openly about expectations regarding damage and cleaning.
Here are three ways to maximize the chances of getting your deposit back, both before and after you move in.
- Interview your potential landlord – Have an in-person meeting with the landlord. Discuss their communication style, experience level and the typical move-in and move-out process. Always sign a lease to protect both parties.
- Ask the right questions – It’s always a good idea to have a list of questions prepared to ask your future landlord. These questions can help you spot any red flags. “If the landlord starts asking questions that are out of bounds, that’s a red flag,” said McIntyre. Out-of-bounds questions could cover topics like sexual orientation, religious beliefs or personal health.
- Get everything in writing – Landlords must communicate with their tenants in writing. Therefore, it’s important to know your rights and record all situations that arise while living in a unit. You should file photos, emails and written documents. Keep them until you have moved out of the property and completed all walkthroughs.
Unfortunately, many Canadians learn the hard way when it comes to how to protect themselves as a tenant.
Moving into a new place is exciting. But before you rent property, know exactly what you are getting before you sign that dotted line.
