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 New Brunswick, the Office of the Rentalsman, not the landlord, holds the deposit for the landlord and tenant.
When a tenancy ends, the initially collected deposit is returned to you (subject to any permitted deductions), often by way of covering the cost of the last month's rent. There is often a difference between the amount of the initial rent deposit and the rent as you depart. If you have not given your landlord additional money during the tenancy to increase the amount of the deposit, part of the interest owed, if applicable, may be used to cover the difference between the initial deposit amount and the amount of the last month's rent.
Landlords Canada-wide cannot simply keep a departing tenant's deposit or charge for additional repairs to the rental premises. Your landlord must negotiate payment with you and if you disagree, your landlord must formally apply to the local rental authority to keep a deposit, or to charge you for damages costing more than the deposit and interest.
FactHow Much Money?
The amount of money returned to tenants moving out depends on the guidelines set for the applicable province or territory. Factors that often affect the final amount are:
- Whether the rent is paid in full.
- The amount of the deposit the tenant paid the landlord, if applicable,
- The prescribed interest on the deposit, based on the rate set by the province or territory,
- The condition of the rental unit, excluding normal wear and tear.
For details refer to the Provincial and Territorial Fact Sheets.