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When the Tenancy Ends

Ending the Rental Agreement

When the rental agreement ends, it is important for the party that is ending the tenancy to give proper notice. Once again, the requirements vary in each province or territory in Canada, so it's important to check the rules for your area in the Provincial and Territorial Fact Sheets.

The Final Inspection

When your tenant moves out, you'll need to inspect the premises to see if there are any damages, beyond normal wear and tear. If you inspected the unit with your tenant when he/she moved in, locate your initial inspection checklist. Refer to this list to compare the condition of each room when your tenant moved out with the condition when he/she moved in. You and your departing tenant should inspect the rental premises together; both of you should sign and keep a copy of the checklist.

If the rental unit passes your final inspection, the timely return of your tenant's damage deposit (if any) will be in order. If the place is in disrepair or unacceptably dirty, you will ask your tenant to pay for cleaning or damages by your tenant and/or your tenant's guests during their tenancy. It is important for you to review the Provincial and Territorial Fact Sheets, as legislation related to deposits varies from area to area.

Returning the Deposit, with Interest

Rules governing deposits vary from province to province. In Quebec, landlords cannot collect a deposit. In Ontario, landlords may collect a rent deposit, but this is not a "security deposit", so, the landlord cannot use the rent deposit to cover the cost of damages. In some provinces, the Rentalsman office, not the landlord, holds the deposit for the landlord and tenant.

When a tenancy ends, the initially collected deposit is returned to your tenant, often by way of covering the cost of the last month's rent. Most areas have a set interest rate or an interest rate chart that specifies how much interest must be paid. However, in some provinces, like Alberta, interest must be paid to your tenant annually unless both you and your tenant agree in writing to have compound interest paid out at the end of the tenancy.

There is often a difference between the amount of the initial rent deposit and the rent as your tenant departs. If your tenant has not given you additional money during the tenancy to increase the amount of the deposit, part of the interest owed, if applicable, may often be used to cover the difference between the initial deposit amount and the amount of the last month's rent.

Rules on the use of a deposit to cover damages varies from area to area. Check the Provincial and Territorial Fact Sheets to find out how the return of deposits is handled in your area.

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