Facts About Security Deposits in Canada For Leasing Agents

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Once a tenant commits to rent a property, they are obligated to take care of it as their own. They should make an effort to maintain the rental’s condition, and let me tell you that it is not easy. The tenants have the task of making sure the rental is in tip-top shape after their lease ends. But sometimes, accidents happen, and damages occur. For these instances, the landlord should determine what to do and where to get the funds for it. The good thing is, the money is ready because a security deposit is available.

Asking for a security deposit is a standard practice in the rental business. Of course, as a Canadian leasing agent, you already know this. The security deposit is an amount tenants give to a landlord. The word “security” implies something that protects. It protects the landlord from financial loss. In what way, you may ask? The landlord can use the amount to cover any expense needed for repairs and unpaid rent.

For example, the tenant failed to pay rent for several months and was eventually evicted — the landlord can use that tenant’s security deposit to pay for the incomplete payment.

• Before moving in

The security deposit is paid before the tenants move in. The tenants only have to pay once during their lease. However, like in the US, it depends on where the property is located. In Alberta, the security deposit should not be more than the amount of the monthly rent.

It is different in Ontario, though. The landlords are not allowed to ask for a security deposit. They are, however, permitted to ask for a rent deposit. It is similar to a security deposit, but it can only be used to settle unpaid rent. The landlord cannot use it to pay for damages. The amount should also not exceed a month’s worth of rent.

In Manitoba, the landlords are allowed to ask for a security deposit. But it should not be worth more than half of the first month’s rent.

Upon receiving, the landlord should put the money in an account within two days. And if not used during the tenant’s stay, the landlord should return it to them. They should also pay the tenants interest for the deposit, which is determined by the law.

• Upon moving out

The landlord is required to give back the deposit upon the tenant’s departure from the property. But there are valid reasons why a landlord would keep it.

One of the reasons is when a tenant has failed to pay some previous rental fees. Another reason is when the tenant caused damages to the property. The landlord would need to have it fixed, and the deposit will cover the costs. He can also charge the tenant if they fail to give the property keys back.

• Returning the security deposit

The landlord has to remember that he should deliver a statement of account to the tenant a maximum of ten days after they move out. If the tenant does not receive it, they can write a letter requesting the landlord to give them a statement of account.

It should include the original amount of the security deposit, the interest, and the amount to be returned. The statement of account should also state the reason for any deductions if there are any. If the landlord cannot determine the total cost for repairs within ten days, he can send an estimated amount. The final statement of account may be delivered to the tenant within thirty days after the tenant gives up possession of the rental.

Sometimes the tenant will not agree to the amount they will receive. They can attempt to ask the landlord to return their security deposit in full. If both parties will not agree, the tenant can send an application to the Provincial Court or through the Residential Tenancy Dispute Resolution Service.

As a Canadian leasing agent, you must know about these things. Knowing about security deposits will greatly help you with letting the tenants know what to expect. But first, you have to look for one.

The first thing to do is get your property listings out there. I would recommend using Padleads to make it easier for you. All you need to do is sign up, post the listing, and syndicate them to other websites. Like I said — easy.

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