Security Deposits

Need to know

In Alberta, most landlords require a tenant to pay a security deposit (also known as a damage deposit) before moving in.
A security deposit is a one-time only payment and cannot be more than one month’s rent.
Landlords must follow certain rules for security deposits during a tenant’s move in and move out, as well as for returning security deposits.
Tenants can write to their landlord requesting the return of their security deposit in some situations. For example, when the landlord does not provide a statement of account or the tenant does not agree with security deposit deductions.
Landlords must pay tenants interest on security deposits. Government regulation sets the interest rate for security deposits.

Moving in

Within two days of receiving a security deposit, the landlord must place it in a trust account. The deposit stays in the trust account until the tenant moves out. Landlords must also pay tenants interest on security deposits. Government regulation sets the interest rate for security deposits. To calculate the security deposit interest, refer to the Government of Alberta’s interest rate calculator.

Moving out

When the tenant moves out, the landlord may use the security deposit if there are valid reasons for deducting money from it. For example, a landlord can keep money from a security deposit if:

the tenant owes money for rent
the tenant damages the property and the landlord completes the inspection reports
the tenant did not clean the property and the landlord completes the inspection reports
the tenant did not return the keys
the tenant owes money for fees

Statement of account

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. The statement of account sets out:

the original security deposit amount
any payable interest
the reason for and amount of any deductions
the amount of the security deposit return to the tenant

“Deliver” means the landlord must put the statement in the mail to the tenant in 10 days. However, it does not mean the tenant has to receive it within 10 days.

If the landlord is returning some or all of the security deposit to the tenant, the landlord will then include a cheque along with the statement.

In some situations, the landlord won’t know the cost of repairs or cleaning right away. So, they won’t know how much to deduct from the security deposit. In that case, the landlord can deliver an estimated statement of account within 10 days. Also, they must provide a final statement of account within 30 days of the tenant giving up possession.

Requesting return of security deposit

Tenants can write to their landlords requesting the return of the security deposit if they:

Do not receive a statement of account from their landlord
Do not agree with the landlord’s deductions from the security deposit

Tenants who do not agree with security deposit deductions should outline reasons why the deductions are inappropriate or unreasonable (see sample request for return of security deposit below).

If the landlord and the tenant cannot come to an agreement on their own, then the tenant can make an application in Alberta Court of Justice or through the Residential Tenancy Dispute Resolution Service for return of the security deposit.

Sample request for return of security deposit

Below is a template request for the return of a security deposit. To use it, copy the text into a typeable document and insert your words in place of the prompt words in the square brackets. You can change the template wording to suit your situation.

[Date]

[Landlord’s name]
[Landlord’s address]

To [Landlord’s name]:

I am writing about the security deposit that I paid under the lease of [rental property address]. When I moved in on [move-in date], I paid a [security deposit amount] security deposit. I lived in the property until [move out date] and I had paid the rent in full. On [date of move out inspection], I completed the move out inspection report with you and there was no damage marked down on the report, and the apartment was clean.

I did not receive my [security deposit amount] from you, or a statement of account as required by the Residential Tenancies Act.

If I do not hear from you on or before [deadline for landlord’s response], I will file an application for return of my security deposit with the Residential Tenancy Dispute Resolution Service.

I look forward to receiving my security deposit, which you can send to [specify where you want the landlord to return the security deposit e.g., a mailing address or e-transfer]. You can reach me further at [your contact information].