Security Deposits

Moving Out / Frequently Asked Questions

Moving In

In Alberta, most landlords require a tenant to pay a security deposit or damage deposit before moving in. A security deposit is a one-time only payment and cannot be more than one month’s rent.

A landlord must place a security deposit in a trust account within two days of receiving it. The money stays in the trust account until the tenant moves out. Landlords must pay tenants interest on security deposits. The rate of interest is determined by a government regulation. Service Alberta provides an interest rate calculator available here.

Moving Out

The landlord can use the security deposit when the tenant moves out, if the landlord has a valid reason for deducting money from it. Some common reasons that a landlord can keep money from a security deposit include:

the tenant owes money for rent;
the tenant has damaged the property and the landlord completed the inspection reports;
the tenant has not cleaned the property and the landlord completed the inspection reports;
the tenant has not returned the keys; or
the tenant owes money for fees.

Requirements for Returning the Security Deposit

When the tenant gives up possession of the property (which is usually when the tenant gives the keys back to the landlord), the landlord has 10 days to deliver a statement of account to the tenant. “Deliver” means the landlord must put the statement in the mail to the tenant in 10 days. It does not mean the tenant has to receive it within 10 days. Tenants who do not receive a statement of account can send their landlord a letter requesting the return of the security deposit (see example below).

The statement of account sets out the original security deposit amount; any interest being paid; the reason for and amount of any deductions; and the amount of the security deposit being returned to the tenant. If the landlord is returning some or all of the security deposit to the tenant, the landlord will include a cheque along with the statement.

Sometimes the landlord won’t know the cost of repairs or cleaning right away, and won’t know how much needs to be deducted from the security deposit. In that case, the landlord can deliver an estimated statement of account within 10 days, and provide a final statement of account within 30 days of the tenant giving up possession.

If the tenant does not agree with the deductions that have been made from the security deposit, he or she should write to the landlord requesting the return of the security deposit, and the reasons why the deductions are inappropriate or unreasonable. If the landlord and the tenant cannot come to an agreement on their own, then the tenant can make an application in Provincial Court or through the Residential Tenancy Dispute Resolution Service for return of the security deposit.

See our article, Getting your security deposit back.