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Rent deposits and fees in Canada

In Canada, the rental deposits and fees that landlords can charge are regulated by each province. There are six types of rental charges in Canada: damage or security deposits, rent deposits, pet fees, pet deposits, tenant services deposits, and key deposits. Use the table below to figure out what deposits and fees landlords can legally charge in your province or territory.

Security deposits

A security deposit (or damage deposit) is money that must be returned to the tenant if certain conditions are met. If a rental unit is damaged during the tenancy or the tenant moves out without giving enough notice or paying all their utility bills, the landlord can keep all or part of the deposit. Deposits cannot be used to cover normal wear and tear during the tenancy. Whether or not the landlord has to ask permission to keep the deposit and the reason they may withhold the deposit varies by province. Ontario and Quebec are the only provinces that do not allow landlords to collect a security deposit.

Rent deposits

Ontario is the only province that allows landlords to collect a deposit to cover the last month of rent. This rent deposit cannot be used to cover damages or for any other purpose. If there are damages to the unit, the landlord must make an application against the tenant to collect those funds. Under the Ontario Residential Tenancies Act, the rate of interest to be paid annually to a tenant is equivalent to the rent increase guideline of the same year that the interest is due. Therefore, the tenant will never owe additional rent to the landlord at the end of their tenancy, regardless of how many years have passed and how many times the rent has been raised.

Do security deposits have to be kept in a special account?

Alberta, Newfoundland, Nova Scotia, and Saskatchewan explicitly require landlords to protect tenant’s security deposits by holding them in an interest-bearing trust account. In New Brunswick, security deposits are held by the provincially-regulated Office of the Rentalsman trust account.

Do landlords have to pay interest on security deposits?

In all provinces except New Brunswick (and Ontario & Quebec where security deposits are not allowed) landlords must pay tenants interest on their security deposit. The government of each province sets the interest rate to be paid on the security deposit. Interest must be paid for the period of time from when the deposit was received until the deposit was returned, before any deductions are made. In New Brunswick, the interest is kept by the government to pay for the cost of the safe deposit program.

Pet fees

Alberta and Saskatchewan are the only provinces that explicitly allow landlords to charge a non-refundable fee for bringing pets into the apartment. Neither province has a limit on how much landlords can charge for pet fees, but landlords should have a reason for charging the amount that they are, and the amount must be reasonable. For example, if the tenant has a dog, the carpets and air vents may need to be cleaned more often and the fee should equal this expense. At the end of a lease, the landlord is not required to return the pet fee if the damage costs are less than the fees collected. Tenants can try to negotiate pet fees with prospective landlords – see Renting with a pet in Alberta for some great tips.

Pet deposits

A pet damage deposit is money that must be returned to the tenant is held by the landlord until the end of the tenancy and may be used to cover damage caused by the pet. Pet deposit money in excess of any pet damages is refundable.

Landlords cannot ask tenants who require a service animal, such as a guide dog, to pay a pet deposit. In provinces where pet deposits were recently introduced, tenants who had pets with your permission before this type of deposit was allowed are not required to pay a deposit for those pets.

Tenant services security deposit

Manitoba is the only province that allows landlords to charge a separate deposit before a lease in a building that provides tenant services (i.e. assisted housing). A tenant services security deposit can only be half of one month’s tenant services charge. The landlord holds the money until the tenant moves out. When a tenancy ends, a landlord may claim a tenant services security deposit for unpaid tenant services charges or other money owed that is related to a tenant service. Effective March 1, 2013, a tenant services charge may be increased if the number of people living in the unit increases. If the landlord increases the tenant services charge, the tenant may be required to pay an increase to the tenant services security deposit.

Key deposit

A key deposit means different things in different parts of the world. In some countries, it is used to describe a bribe, gift or other shady dealing between a tenant, landlord or agent. The term may also be used synonymously with a regular security deposit. In Canada, key deposits literally refer to money to be returned in exchange for the key at the end of a tenancy.

In most provinces and territories, key deposits are illegal. In Alberta, Saskatchewan and the Yukon territories, refundable key deposits may be included as part of the security deposit (which cannot exceed one month’s rent in total). In British Columbia, landlords cannot charge a fee for the tenant’s only key, but can charge for additional or replacement keys.