Limit - Security Deposits - Moving In - Laws for Tenants in Alberta

Limit on Amount of a Security Deposit

A security deposit cannot be more than one month’s rent. The amount is based upon the monthly amount of rent at the start of the tenancy. The deposit amount cannot be increased if the rent increases.

It is important to be clear as to what a landlord might ask for as a security deposit, and what might be a non-refundable, one time payment. The total amount of a security deposit can never be more than one month’s rent. A security deposit includes all refundable fees. Even if the security deposit includes items such as a refundable deposit for having a pet, for having keys, or for damage to the premises, the total amount can never be more than one month’s rent.

If however, there is a separate non-refundable, one time payment for something like having a pet in the premises, that does not form part of the security deposit. It is important to read the lease contract carefully, or to understand any oral agreement you have, so that you can determine what is security deposit and what is not.

For example, if your rental agreement says that you have paid $100 refundable deposit for possible damages that your dog might do, then that would likely be part of the security deposit and you may receive all or part of that deposit back when you leave. However if your rental agreement says you must pay a fee of $100 in order to be allowed to keep a pet in your apartment, that is a one time, non-refundable payment, and you won’t get any of it back. The non-refundable fee is not part of the security deposit.

The law places few limits on what a landlord can ask for as a one time fee in the contract. In cases where a landlord is asking for a fee to cover losses he might suffer, for example due to rent being late or a tenant leaving before the tenancy is over, the fee must be a genuine estimate of the losses a landlord might suffer. The fee cannot be so high that it is in fact a penalty rather than a fee. In practical terms, as a tenant you will have to decide when you make the rental agreement with the landlord, whether you want to agree to pay any one time fees or not as a condition of renting the property.

It is important to get a receipt from your landlord for the security deposit and for any fees that you pay.

A condominium corporation can also request a deposit from an owner for a unit that is being rented. This is in addition to any deposit the owner/landlord might have requested from you. The landlord must hold your security deposit on trust in an interest bearing account. It is not possible for the owner/landlord to use your security deposit to pay for the deposit required by the condominium corporation.

Although a security deposit is usually an amount of money, it can also be an item of property which is equal in value to the amount of a security deposit.

May 2005